Back Custom print Link Text Only Rich Text Print

  • EN-6 EN-6 Financial penalties

    • EN-6.1 EN-6.1 BMA Policy

      • EN-6.1.1

        The Agency may on a very selective basis impose financial penalties on licensees. Their use is generally limited to situations where major breaches of regulatory requirements have taken place and a licensee has failed to respond in an acceptable manner to the concerns expressed by the Agency. Financial penalties are thus normally preceded by the issuance of a Formal Notice and/or Direction.

      • EN-6.1.2

        The level of financial penalty applied is determined by the nature of the contravention and the amount of additional supervisory attention and resources taken up by a licensee's behaviour. The maximum penalty, however, is capped at BD 20,000. The Agency intends that the impact of a penalty should derive more from its signaling effect than from the actual amount of money involved.

      • EN-6.1.3

        As indicated in section EN-1.3, the Agency requires disclosure by licensees in their annual reports of any financial penalties served on them, together with a factual description of the reasons given by the Agency for applying the penalty. In addition, the Agency may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the Agency's supervisory objectives. In such instances, the Agency will usually allow the licensee concerned the opportunity to make representations to the Agency before a public statement is issued.

      • EN-6.1.4

        Examples of the types of compliance failings that may lead to the serving of a financial penalty notice include (but are not limited to):

        (a) Failures to address persistent delays and/or significant inaccuracies in regulatory reporting to the Agency;
        (b) Repeated failures to respond to formal requests for information from the Agency, within the deadlines set;
        (c) The submission of information to the Agency known to be false or misleading; and
        (d) Major failures in maintaining adequate systems and controls in accordance with the Agency's requirements, subjecting depositors and other customers to significant risk of financial loss.

      • EN-6.1.5

        In assessing whether to serve a financial penalty notice, the Agency takes into account the following criteria:

        (a) the seriousness of the contravention, in relation to the requirement(s) concerned;
        (b) the duration and/or frequency of the contravention, and the extent to which it reflects more widespread weaknesses in controls and/or management;
        (c) the extent to which the contravention was deliberate or reckless;
        (d) the licensee's past compliance record and conduct following the contravention; and
        (e) the scope of any other action taken by the BMA or other regulators against the licensee, in response to the compliance failures in question.

      • EN-6.1.6

        The imposition of a financial penalty does not preclude the BMA from also using other enforcement measures to remedy the same violation (for instance, a Direction).

    • EN-6.2 EN-6.2 Money laundering regulation

      • EN-6.2.1

        In addition to the circumstances set out in section EN-6.1, a financial penalty of up to BD 20,000 may be applied by the Agency in cases where a licensee fails to comply with any of the requirements in module FC.

      • EN-6.2.2

        As with the imposition of financial penalties in response to breaches of other regulatory requirements, the Agency will apply financial penalties with respect to the regulations set out under module FC on a very selective basis only. The same criteria set out in section EN-6.1 will be taken into account by the Agency when considering imposing a financial penalty. Financial penalties applied under this Section are also subject to the same disclosure requirements as described in section EN-6.1.

      • EN-6.2.3

        A failure to comply with the requirements in module FC that warrants a financial penalty would not trigger also a financial penalty under section EN-6.1.

      • EN-6.2.4

        Any financial penalties applied by the Agency as regards the implementation of its regulations set out under module FC, are without prejudice to the criminal sanctions available to the Bahraini courts under the Decree — Law No. 4 of 2001, with respect to the prevention and prohibition of the laundering of money. As with other financial penalties, the imposition of a financial penalty with regards to breaches of the regulation in module FC does not prevent the Agency from also using other enforcement measures to remedy the same violation (for instance, a Direction).

    • EN-6.3 EN-6.3 Procedures for financial penalties

      • EN-6.3.1

        A written financial penalty notice will be addressed to the Chief Executive Officer or General Manager of the licensee concerned. This written notification will describe the contravention concerned, the Agency's evidence supporting a financial penalty, and the factors justifying the level of penalty proposed. Only an Executive Director or more senior member of the Agency's management may sign the notification.

      • EN-6.3.2

        The licensee has 15 business days from the notification's date of issuance to submit any representations it wishes to make to the Agency, in writing and addressed to the issuer of the original notification. If the licensee decides not to submit representations, it has 30 calendar days from the notification's date of issuance in which to pay the penalty.

      • EN-6.3.3

        Should the licensee make representations challenging the proposed penalty, the Agency has 15 business days from the issuance of those representations in which to re-examine the facts of the case and its conclusions. If the Agency confirms application of a penalty, payment is required within 30 calendar days of a final notice being issued. However, the licensee has the right to lodge a further written appeal within those 30 days, addressed to H.E. the Governor. In such cases, H.E. the Governor makes a final determination within 15 business days of the date of the written appeal. If H.E. the Governor confirms application of a penalty, then payment is required within 30 calendar days of H.E. the Governor's written confirmation.

      • EN-6.3.4

        Failure to pay a penalty within the required deadlines will be considered a breach of the Agency's regulatory requirements, and will also result in other measures being considered, as described elsewhere in this Module.

    • EN-6.4 EN-6.4 Remedying a compliance failure

      • EN-6.4.1

        Payment of a financial penalty does not by itself absolve a licensee from remedying the compliance failure concerned. The Agency will expect the licensee to address the contravention within a reasonable timescale, to be agreed on a case-by-case basis. Failure to do so will result in other measures being considered.