ADGM Company Service Provider Compliance with AML and Sanction Rules

The Abu Dhabi Global Market (ADGM) Registration Authority (RA) has issued a direct and urgent reminder to all Company Service Providers (CSPs): meet your obligations or face enforcement.

In a letter dated 8 November 2024, the RA expressed serious concern that some CSPs are “not conducting business in a manner that is fully compliant with the requirements.” Following a targeted desk-based review of nearly 20% of licensed CSPs, the findings reveal a widespread failure to meet key conditions set out in the Commercial Licensing Regulations (Conditions of Licence and Branch Registration) Rules 2024, rules that have been in place since April and were updated significantly in 2023.

The RA’s message is clear: regulatory leniency is over. CSPs are gatekeepers to the ADGM business ecosystem and are now expected to demonstrate full adherence to both licensing and AML frameworks.

Ten Licensing Conditions of Every CSP Must Meet

The review was anchored around the following ten conditions under Schedule 1 of the 2024 Rules:

1. Fit and Proper Person – Senior managers, directors, and beneficial owners must meet clear fitness and propriety standards.

2. Policies, Procedures and Controls – Internal governance must be documented, up-to-date, and effective.

3. Appropriate Insurance Cover – Firms must maintain valid and sufficient insurance policies for business continuity.

4. Prudent Business Operation, Adequate Resources and Staff Certification – CSPs must ensure staff dealing directly or indirectly with clients or the Registrar are certified.

5. Staffing in the Abu Dhabi Global Market – Many CSPs had no certified staff physically present in ADGM during ordinary business hours, contrary to the Rules.

6. Anti-Money Laundering Officers – Designated officers must be appointed and actively maintain AML frameworks aligned with ADGM and UAE standards.

7. Compliance Officer – A qualified compliance officer must be appointed and able to demonstrate active oversight.

8. Minimum Regulatory Capital – Firms must maintain the minimum capital thresholds required under the CSP Framework.

9. Annual CSP Return – Returns were often found to be inaccurate, with firms declaring staff were certified or present when they were not.

10. Principles – Firms are expected to uphold high standards of integrity, transparency, and professional conduct.

AML Failures Compound the Risks

Alongside licensing non-compliance, the RA highlighted serious gaps in AML and sanctions compliance. CSPs, classified as Designated Non-Financial Businesses and Professions (DNFBPs), must adhere to the ADGM AML Rules (Chapters 1–9 and 11–15) and applicable UAE Federal AML laws, including Cabinet Decisions 10 of 2019 and 74 of 2020.

Firms are expected to conduct a full gap analysis of Chapters 4–9 and 11–14 within six months of receiving the letter and to retain evidence of findings and remedial action.

The RA warned it will not hesitate to escalate failings to Enforcement, including the imposition of penalties, licence suspensions or cancellations.

How Clarity Can Help CSPs

At Clarity, we work closely with CSPs in ADGM and other regulatory hubs, and the trends we’ve seen echo the RA’s concerns. Compliance is no longer a passive process — it’s a continual, strategic exercise in good governance.

We’re here to help you:

• Draft and update tailored policies, procedures, and controls to meet current requirements

• Conduct independent reviews of your compliance systems and AML framework

• Perform your annual AML assessment, as required under Rule 4.1.1(4)

• Deliver bespoke AML training, face-to-face or online, designed around your team’s needs

• Guide your team through your next Annual CSP Return with confidence and clarity

Whether you’re concerned about your staff certification records, unsure about physical presence obligations, or simply haven’t revisited your insurance or capital adequacy levels, now is the time to act.

Contact Clarity for a confidential compliance check-up. Whether you’re an established CSP or preparing for launch in ADGM, we can help you ensure your framework is robust, compliant, and defensible.