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Schedule 3 – Fines

Effective from Jun 05 2023 - Jun 04 2023
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1. In accordance with Regulation IX.C, VARA has the sole and absolute discretion to issue fines against any Entity and determine the amounts thereof. 
2. The following table sets out the nature and indicative amounts of fines that VARA may impose on any Entity for violations of Regulations, Rules, Directives or Licence conditions, but which shall be determined by VARA in accordance with applicable local and federal laws and by reference to its assessment of all relevant factors, including those set out in Regulation IX.C.
3. VARA may amend the grounds for issuance and/or amount of the indicative fines set out in this Schedule 3, including adding new categories of fines, by amendment to these Regulations or by Directive at any time.
No. Nature of Violation / Ground[s] for Issuance of Fine Indicative Fine Amount per Violation [AED]
1. Violation of AML/CFT and “know your customer” requirements [including, but not limited to, CDD] in—
[a] Regulations and/or Directives by any Entity [including, but not limited to, VASPs]; or
[b] Rules [including, but not limited to, Part III of the     Compliance and Risk Rulebook] by any VASP.
To be determined in accordance with applicable local and federal laws.
2. Violation of—
[a] Rules in the Compliance and Risk Management Rulebook [not covered in No. 1 above] or Market Conduct Rulebook by any Entity; or
[b] Regulations and/or Directives related to Market Offences by any Entity [including, but not limited to, VASPs].
Any of the following—
[a] for any individual, up to the higher of [i] AED 20,000,000, or [ii] 200% of the profits gained or losses avoided; or
[b] for any corporate Entity, up to the higher of [i] AED 50,000,000, [ii] 15% annual revenue of the corporate Entity, or [iii] 300% of the profits gained or losses avoided [if greater than [b][i] or [b][ii]].
3. Violation of Regulations, Rules, or Directives not covered in No. 1 or No. 2 above by any Entity.
4. Issuance of a fine against any Entity pursuant to Regulations IX.C.1.a-e and IX.C.2.i on the basis of any of the following non-exhaustive grounds— 
[a] any Entity carrying out VA Activity[ies] in violation of Regulation III.A.1 [e.g. without being authorised and Licensed by VARA];
[b] any Entity issuing a Virtual Asset in violation of Regulation II.A.1;
[c] any Entity in violation of the mandatory registration requirement in Regulation IV.A.7;
[d] any Entity misrepresenting to any member of the public [i] any relationship or engagement with VARA, or [ii] such Entity’s ability to unduly influence or accelerate the licensing process [including, but not limited to, any violation of Regulation X]; and/or
[e] any Entity in violation of any Ultimate Beneficial Owner [UBO] disclosure requirements in Regulations, Rules and/or Directives.
5. Non-payment of fine within any timeframe specified by VARA.
Further fine to be issued, the amount of which shall accrue from when a fine is due at 1% per month [rounded up to the nearest full month] for any unpaid amounts of the fine on a compounding basis, until the initial fine and the further fine are paid in full. 

 

4. In assessing whether to issue a fine against an individual, VARA shall, in its sole and absolute discretion, consider the following—
 
  a. the materiality and severity of the violation [including, but not limited to, violation of a Regulation, Rule and/or Directive by an Entity which the individual is employed by];
 
  b. the materiality and severity of the individual’s failure to adequately manage responsibilities, obligations and/or functions relevant to their roles as stipulated in the Rulebooks;
  c. whether the individual acted reasonably in accordance with the VASP’s internal policies;
  d. whether the individual acted with wilful negligence of their and/or the VASP’s responsibilities under any Regulation, Rule and/or Directive;
  e. to the extent applicable, factors set out in Regulation IX.C.4; and
  f. all other factors which VARA may consider to be relevant.
 
5 Notwithstanding No. 5 in the above table of this Schedule 3, if a fine issued pursuant to these Regulations is not paid by an Entity within the timeframe specified by VARA, VARA may, in its sole and absolute discretion, take any further action necessary to recover payment including, but not limited to, taking further enforcement action[s] and/or referring the matter to any law enforcement agencies and competent courts.