CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (57/2021 Disciplinary Board) (81/2021 Authority) and imposition of a fine of four thousand Dinars against EFG Hermes IFA Financial Brokerage Company for violating Anti-Money Laundering and Combating Financing of Terrorism
Announcement Regarding Issuance of Disciplinary Board Resolution No. (57/2021 Disciplinary Board) (81/2021 Authority) and imposition of a fine of four thousand Dinars against EFG Hermes IFA Financial Brokerage Company for violating Anti-Money Laundering and Combating Financing of Terrorism
For the following reasons:
First: Violation of the provisions of Items No. (2) and (3) of Article (3-18) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
The Company did not include the politically exposed among the factors affecting the client’s rating, and the risk weight for clients from high-risk countries does not significantly affect the client’s rating. It was also found by examining a sample of clients sample that the Company did not classify a number of the Company’s clients from high-risk countries and clients from the politically exposed category of high-risk category, according to the following table:
# |
Transaction Number |
Inspection Team Note |
1 |
-------------------- |
The client was rated as low risk despite holding the nationality of a high risk country. |
2 |
--------------------- |
The client was rated as low risk despite holding the nationality of a high risk country. |
3 |
--------------------- |
The client was rated as medium risk despite holding the nationality of a high risk country. |
4 |
-------------------- |
The client was evaluated as low risk, given that the client is a politically exposed person (Ambassador). |
5 |
--------------------- |
The client was evaluated as low risk, given that the client is a politically exposed person (diplomat). |
6 |
--------------------- |
The client was rated as low risk despite holding the nationality of a high risk country. |
7 |
------------------- |
The client was evaluated as low risk, given that the client belongs to the category of politically exposed persons (former Prime Minister). |
8 |
--------------------- |
The client was rated as medium risk despite holding the nationality of a high risk country. |
9 |
-------------------- |
The client was evaluated as medium risk, given that the client belongs to the category of politically exposed persons (formerly the Undersecretary of the Ministry of Interior). |
10 |
------------------ |
The client was rated as low risk despite holding the nationality of a high risk country. |
11 |
------------------- |
The client was evaluated as low risk, given that the client belongs to the category of politically exposed persons (Assistant Undersecretary at the Amiri Diwan). |
12 |
--------------------- |
The client was rated as low risk despite holding the nationality of a high risk country. |
13 |
------------------- |
The client was rated as low risk despite holding the nationality of a high risk country. |
14 |
-------------------- |
The client was rated as low risk despite holding the nationality of a high risk country. |
15 |
-------------------- |
The client was rated low risk despite being a politically exposed person. |
16 |
-------------------- |
The client was rated as medium risk despite holding the nationality of a high risk country. |
17 |
-------------------- |
The client was rated low risk despite her sister being reported to be politically vulnerable. |
18 |
------------------- |
The client was categorized as medium risk despite being reported to be politically exposed. |
Second: Violation of the provisions of Article (3-25) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
This is due to the Company’s failure in taking the necessary action, which is to end the business relationship with clients for whom the Company was unable to take due diligence measures, as indicated in the note on the Company’s internal audit report regarding the Company’s failure to perform strict due diligence measures on some high-risk clients.
The Resolution included the infliction of the following penalty: -
“The EFG Hermes IFA Financial Brokerage Company is fined an amount of two thousand Dinars for each of the attributed violations”.
In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these rules in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.
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