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Dubai International Financial Centre (DIFC) issues CRS Law

On 21 March 2018, the Dubai International Financial Centre (DIFC) in the United Arab Emirates (UAE) enacted the Common Reporting Standard (CRS) Law.

The CRS imposes obligations on Reporting Financial Institutions to collect and report certain information in relation to their account holders.

The recently issued CRS Law can be used as a general guidance tool for implementation, but it also gives the DIFC the functional power to enforce compliance in a variety of ways; such as by conducting investigations and issuing fines and penalties.

Some of the most pertinent provisions have been highlighted below:

Section

Topic

12(2)

Establishing a CRS compliance framework manual

12(3)

Maintaining records with regards to the due diligence procedures undertaken

12(6)

Notifying a Reportable Person prior to reporting

13(1)

Entering the premises of a Reporting Financial Institution at any reasonable time for conducting an inspection and ensuring compliance with the law

13(4)

Blocking, suspending and closing the accounts of non-compliant Account Holders

14 (1)

Appointing an inspector to investigate the affairs of the Reporting Financial Institution

 

Fines and penalties

Schedule 2 of the CRS Law, lists the different types of fines ranging up to USD 70,000 for a single contravention.

Penalties are included for failing to report, failing to keep records of the due diligence procedures performed and knowingly or recklessly signing or otherwise positively affirming a false self-certification.

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