Abu Dhabi Financial Regulator Fires Warning Shot
The Abu Dhabi Global Market (ADGM), the free zone for financial service providers in the capital of the UAE, imposed fines on 23 resident firms at the end of May. The fines themselves are minimal, but the reasoning behind them is striking.
Written by Gérard Al-Fil, Dubai
The Financial Services Regulatory Authority (FSRA) of the ADGM imposed fines totaling 610,000 dirhams ($166,000) on 23 companies. According to the FSRA, some of these firms violated accounting standards established in 2017. Additionally, a group of the penalized companies failed to comply with regulations concerning foreign tax compliance introduced in 2022.
No Tax Haven
The FSRA made its position clear on its website, which also reveals the names of the fined firms: «The regulations implement international frameworks that require reportable entities to collect and report information on foreign account holders to combat international tax evasion. The measures taken by the FSRA of the ADGM address a series of violations related to CRS and FATCA compliance.»
The Common Reporting Standard (CRS) is a global standard developed by the OECD (Organisation for Economic Co-operation and Development) for the automatic exchange of financial account information for tax purposes.
The Foreign Account Tax Compliance Act (FATCA) is a US system for reporting tax information, requiring financial institutions to identify their US. accounts through enhanced due diligence and report them regularly to the US tax authority.
«The underlying intergovernmental agreements of the UAE enhance global tax transparency by facilitating the automatic exchange of financial account data between countries,» FSRA said.
«Robust Regulations»
Emmanuel Givanakis, CEO of the FSRA at ADGM, stated: «We are committed to identifying and addressing practices that fall short of our efforts to combat tax evasion by implementing robust and effective regulations in line with leading global compliance and reporting standards.»
