15. Contraventions

(35) A Reporting Financial Institution which:

• (a) does an act or thing that is prohibited under these Regulations;
• (b) does not do an act or thing that it is required or directed to do under these Regulations; or
• (c) otherwise contravenes these Regulations, commits a contravention of these Regulations and is liable to a fine under Schedule 2 (Fines Limits) of the AIFC Common Reporting Standard Rules, or to perform any action directed by the Relevant Authority pursuant to subsection 16(1)(c) (Enforcement and appeals), or any combination thereof.

(36) If a Reporting Financial Institution, Person or intermediary enters into any arrangement, the main purpose or one of the main purposes, of which is to avoid an obligation imposed under subsection 8(1) (Collecting, reporting and keeping records of information), such Reporting Financial Institution, Person or intermediary is subject to the obligation as if the Reporting Financial Institution, Person or intermediary had not entered into the arrangement.

16. Enforcement and appeals

(37) Where the Relevant Authority, or its delegate, considers that a Reporting Financial Institution has contravened a provision of these Regulations, it may by written notice to such Reporting Financial Institution:

• (a) allege that the Reporting Financial Institution has committed the relevant contravention and state the particulars of the facts it relies on;
• (b) order that a fine be paid by the Reporting Financial Institution in respect of each contravention; and/or
• (c) order that certain action(s) be taken in order to comply with these Regulations.

(38) The imposition of any fine under subsection (1)(b) must be made within the period of 12 months on the later of:

• (a) the date that the Reporting Financial Institution becomes liable to pay the fine; or
• (b) the date that the contravention first came to the attention of the Relevant Authority.

(39) A Reporting Financial Institution must not be liable to pay a fine under subsection (1)(b) if the Relevant Authority is satisfied that there is a reasonable defence for contravening these Regulations.

(40) Neither of the following must be considered to be a reasonable defence for the purpose of subsection (3):

• (a) the Reporting Financial Institution having insufficient funds to do something required to be done under these Regulations; or
• (b) the Reporting Financial Institution relying on another Person to do something required to be done under these Regulations.

(41) If the Relevant Authority determines that a Reporting Financial Institution has a reasonable defence for contravening these Regulations up to a particular time or event, the Reporting Financial Institution must not be liable to pay a fine if it can show that any subsequent contravention of these Regulations was remedied without unreasonable delay after it became aware that the reason(s) providing the reasonable defence had ceased to apply.

(42) A Reporting Financial Institution may appeal against any fine imposed or action ordered under subsection (1) on any one or more of the following grounds:

• (a) it disputes the grounds or reasons for the fine provided by the Relevant Authority;
• (b) it disputes the amount of the fine imposed; or
• (c) it disputes the validity of any action ordered by the Relevant Authority.

(43) Any appeal by a Reporting Financial Institution to a fine or action ordered under subsection (1) must be instituted by a written notice of appeal setting out the grounds of appeal delivered to the Relevant Authority within a period of 30 days from the date of the relevant notice provided to it under subsection (1).

(44) When considering a notice of appeal delivered pursuant to subsection (7), the Relevant Authority may, after due consideration of the grounds of appeal:

• (a) confirm, cancel, increase or reduce any fine originally imposed; or
• (b) confirm, change or cancel any action originally ordered, and the Relevant Authority must confirm such finding in writing to the Reporting Financial Institution, provided that the Reporting Financial Institution has the right to challenge any such finding by way of a judicial review application to the AIFC Court, which must stay any pending or further enforcement action under these Regulations until the final determination thereof by the AIFC Court.

(45) The Relevant Authority must take appropriate steps to prevent or manage conflicts of interest arising due to its role in:

• (a) imposing a fine or ordering an action under subsection (1);
• (b) considering a notice of appeal delivered to the Relevant Authority pursuant to subsection (7); and
• (b) determining the outcome of an appeal as specified in subsections (8)(a) or (b).

(46) A fine imposed or action ordered by a Relevant Authority under subsection (1), or confirmed pursuant to subsection (8), must be paid or performed by the Reporting Financial Institution within 30 days after the date of the relevant written notice provided by the Relevant Authority, failing which the Relevant Authority may apply to the AIFC Court for the enforcement thereof, and the AIFC Court may:

• (a) make an order requiring payment of the fine;
• (b) make an order that the required action be taken; or
• (c) make any further order it deems fit.

(47) The Relevant Authority may prescribe forms and procedures in relation to:

• (a) the imposition and recovery of any penalties imposed pursuant to this section;
• (b) the enforcement of actions required by the Relevant Authority pursuant to this section; and
• (c) any objection or right of appeal in respect of any such fine, action required or the enforcement thereof.