Global Investigations podcast: Episode 5

In our fifth episode of the Inside Investigations podcast series, Matthew Shanahan (Middle East Head of Financial Services Regulatory) is joined by Counsel Karl Masi, Counsel Omar Khattab and Associate Hasanali Pirbhai, who provide an overview of the key trends in investigations across the Middle East region, consider some of the underlying policies which shape the regulators’ approach, and discuss the key legal, procedural, governance and reputational issues to be aware of. Key takeaways include:

1. In the past few years, there has been a general enforcement focus on breaches of rules related to AML systems and controls across the UAE, which partly arose out of the UAE being placed on the Financial Action Task Force “grey list” in March 2022. The UAE has subsequently been removed from the grey list as of February 2024.
2. The DFSA has continued to focus on significant misconduct in its Decision Notices, particularly in respect of the way clients are classified and assessed by Authorised Firms. In the ADGM, the FSRA continues to focus on entities, with no enforcement action against an Authorised Person. However, behind the scenes there appears to be a movement towards more conduct focused investigations.
3. The Central Bank of the UAE (CBUAE) and the Securities and Commodities Authority (SCA) have been relatively active in the enforcement sphere, particularly in respect of AML matters.
4. The Dubai Virtual Assets Regulatory Authority (VARA), responsible for regulating and overseeing the provision, use, and exchange of virtual assets, has wide-ranging enforcement powers, including general powers of investigations and enforcement. To date, the focus of VARA has typically been perimeter and marketing-related enforcement actions.
5. In 2025, we can expect to see more money laundering enforcement actions and investigations by the CBUAE; and VARA may initiate conduct focused enforcement actions. In addition, nearly 30% of the contraventions set out in DFSA Decision Notices in 2024 relate to some form of CDD and KYC issue, increasingly involving the adequacy of Suitability Assessments – this is a trend that we expect to see continue. In the ADGM, the level of fines imposed are lower than 2023, but ongoing investigations that may conclude in the coming months are likely to result an uptick in published enforcement action and fines in 2025.

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