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Location: Central Bank of Bahrain Volume 5—Specialised Licensees > Common Modules (Applicable to all Specialised Licensees) > Part A > Enforcement & Redress > EN Enforcement > EN-5 Financial Penalties
  • EN-5 Financial Penalties

    • EN-5.1 Legal Source

      • EN-5.1.1

        Article 129 of the CBB Law, provides the CBB the power to impose financial penalties on licenseesG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law.

        Amended: April 2016
        Amended: October 2012
        October 2010

    • EN-5.2 CBB Policy

      • EN-5.2.1

        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 licenseeG 's or persons' referred to in paragraph (b) of Article (68 bis 1) of the CBB Law behaviour and by limits set in the CBB Law. The CBB intends that the impact of a penalty should derive more from its signalling effect than from the actual amount of money involved.

        Amended: April 2016
        October 2010

      • EN-5.2.2

        As indicated in Paragraph EN-B.4.5, the CBB requires disclosure by licenseesG in accordance with Module PD of any financial penalties served on them, together with a factual description of the reasons given by the CBB for applying the penalty. In addition, the CBB may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the CBB's supervisory objectives, as mentioned in Article 132 of the CBB Law.

        October 2010

      • EN-5.2.3

        In assessing whether to serve a financial written penalty notice, the CBB 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 licenseeG 's past compliance record and conduct following the contravention; and
        (e) The scope of any other action taken by the CBB or other regulators against the licenseeG , in response to the compliance failures in question.
        October 2010

      • EN-5.2.4

        Part 11 of the CBB Law outlines instances where financial penalties may be imposed. 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 CBB;
        (b) Repeated failures to respond to formal requests for information from the CBB, within the deadlines set;
        (c) The submission of information to the CBB known to be false or misleading; and
        (d) Major failures in maintaining adequate systems and controls in accordance with CBB's requirements, subjecting investors and other customersG to significant risk of financial loss.
        October 2010

      • EN-5.2.5

        In accordance with Article 125 of the CBB Law, a written notice of a financial penalty must be issued before imposing any financial penalty. The written notice must contain the following information:

        (a) The violations committed by the licenseeG with respect to the CBB Law; the CBB Rulebook; any Directions, Warnings or Formal Requests for Information; or violations of the terms and conditions of the license issued to the licenseeG ;
        (b) Evidence or proof to support the above;
        (c) The level of financial penalty to be imposed; and
        (d) The grace period to be allowed to the licenseeG for challenging the intended penalty (which will not be less than 30 calendar days).
        October 2010

      • EN-5.2.6

        The licenseeG may either pay the penalty or, pursuant to Article 126 of the CBB Law, may object within the period noted in Subparagraph EN-5.2.5(d). In accordance with Article 127 of the CBB Law, the CBB will consider any objection and make a formal resolution within 30 calendar days of receiving the objection. Thereafter, the resolution and any accompanying penalties are final and must be paid within 30 calendar days.

        October 2010

      • EN-5.2.7

        [This Paragraph was deleted in January 2016.]

        Deleted: January 2016
        October 2010

      • EN-5.2.8

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

        October 2010

    • EN-5.3 Module FC (Financial Crime)

      • EN-5.3.1

        In addition to the general circumstances set out in Section EN-5.2, a financial penalty of up to BD 100,000 may be applied by the CBB in cases where a licenseeG fails to comply with any of the requirements in Module FC (Financial Crime). The fine shall be multiplied by the number of violations.

        Amended: April 2016
        October 2010

      • EN-5.3.2

        As with the imposition of financial penalties in response to breaches of other regulatory requirements, the CBB will apply financial penalties with respect to Module FC, based on the criteria set out in paragraph EN-5.2.3.

        October 2010

      • EN-5.3.3

        A failure to comply with Module FC (Financial Crime) that warrants a financial penalty would not trigger also a financial penalty under Section EN-5.2.

        October 2010

      • EN-5.3.4

        Any financial penalties applied by the CBB as regards the implementation of 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 Module FC does not prevent the CBB from also using other enforcement measures to remedy the same violation (for instance, a Direction).

        October 2010

    • EN-5.3A Financial Penalties for Date Sensitive Requirements

      • EN-5.3A.1

        Modules AU, FC, BR, HC and PD contain specific requirements where specialised licenseesG must comply with, by a precise date. Where a specific due date is involved, the CBB's financial penalties are based on a per diem basis.

        Amended: July 2017
        Added: October 2012

      • EN-5.3A.2

        This Section applies to date sensitive requirements for:

        (a) Reporting requirements included in Module BR;
        (b) Public disclosure requirements included in Module PD;
        (c) The report of the external auditor or approved consultancy firm required as per Paragraph FC-4.3.1 (d);
        (d) Annual licensing fees required as per Module AU, and
        (e) Conduct of Shareholders' Meetings requirements included in Section HC-7.2 (for financing companies).
        Amended: July 2017
        Added: October 2012

      • EN-5.3A.3

        Financial penalties related to late filing or other date sensitive requirements are calculated as per the following per diem basis:

        (a) Where the financing companyG licensee'sG total consolidated assets are less than or equal to BD 50 million, the financial penalty for late filing is BD 100 per day;
        (b) Where the financing companyG licensee'sG total consolidated assets are greater than BD 50 million but less than or equal to BD 250 million, the financial penalty for late filing is BD 200 per day;
        (c) Where the financing companyG licensee'sG total consolidated assets are greater than BD 250 million, the financial penalty is BD 400 per day;
        (e) For new financing companyG licenseesG who have yet to provide audited financial statements, the financial penalty is BD 100 per day;
        (f) For all Volume 5 specialised licenseesG , other than financing companyG licenseesG , the financial penalty under this Section is BD 40 per day.
        Amended: April 2017
        Added: October 2012

      • EN-5.3A.4

        In accordance with Article 129 of the CBB Law, the maximum financial penalty levied for failing to comply with date sensitive requirements is BD 100,000. The fine shall be multiplied by the number of violations. The CBB may opt to limit the amount of the financial penalty and use other enforcement measures as outlined in Module EN (Enforcement), such as imposing restrictions on a specialised license limiting the scope of operations.

        Amended: April 2016
        Added: October 2012

      • EN-5.3A.5

        The various deadlines for submission of reports and annual fees referred to in Modules BR, FC, PD and AU are defined:

        (a) In terms of a specified number of days or months following a given date, such as the last date of a calendar quarter;
        (b) A specified number of days or months after the occurrence of a specific event; or
        (c) A specific date.
        Added: October 2012

      • EN-5.3A.6

        In imposing financial penalties for date sensitive requirements, the following criteria apply:

        (a) Where the due date falls on a holiday as designated by the CBB, the first business day following the holiday will be considered as being the due date;
        (b) Where a due date is not complied with by the end of the day on which it is due, holidays and weekend days are included in the number of days the item is considered late;
        (c) For returns and other filings, the date received is the date recorded by the CBB's systems in case of returns filed electronically;
        (d) In the case of returns filed in hard copy, the CBB stamp is the date received;
        (e) All returns are to be sent to the respective Supervision Directorate and the annual fees to the Accounts Directorate, on or before the due date, to be considered filed on time;
        (f) A day ends at midnight in the case of returns that must be filed electronically, or at the close of CBB business day, in the case returns are filed in hard copy; and
        (g) An incomplete return, where completeness is determined in relation to the requirements of the relevant instructions and Module BR, is considered 'not filed' until the CBB receives all necessary elements of the return.
        Added: October 2012

      • EN-5.3A.7

        The CBB does not require any particular method of delivery for returns and filings that are filed in hard copy. The use of the Bahrain postal services, private courier services or other methods of delivery is entirely at the discretion and risk of the licensee. For the payment of annual fees, licensees must follow the requirements of Form ALF, included under Part B of Volume 5.

        Added: October 2012

      • EN-5.3A.8

        A decision to impose a financial penalty for date sensitive requirements is unrelated to whether the CBB issues a reminder; it is the licensee's responsibility to file and disclose on time as per the requirements of Volume 5 (Specialised Licensees) Rulebook.

        Added: October 2012

    • EN-5.4 Procedure for Financial Penalties

      • EN-5.4.1

        A written financial penalty notice will be addressed to the Chief Executive OfficerG or General ManagerG of the licenseeG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law concerned. This written notification will describe the contravention concerned, the CBB'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 CBB's management may sign the notification.

        Amended: April 2016
        October 2010

      • EN-5.4.2

        The licenseeG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law has 30 calendar days from the notification's date of issuance to submit any representations it wishes to make to the CBB, in writing and addressed to the issuer of the original notification. If the licenseeG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law decides not to submit representations, it has 30 calendar days from the notification's date of issuance in which to pay the penalty.

        Amended: April 2016
        October 2010

      • EN-5.4.3

        Should the licenseeG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law make representations challenging the proposed penalty, the CBB has 30 calendar days from the issuance of those representations in which to re-examine the facts of the case and its conclusions. If the CBB confirms application of a penalty, payment is required within 30 calendar days of a final notice being issued.

        Amended: April 2016
        October 2010

      • EN-5.4.4

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

        October 2010

    • EN-5.5 Addressing a Compliance Failure

      • EN-5.5.1

        Payment of a financial penalty does not by itself absolve a licenseeG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law from remedying the compliance failure concerned. The CBB will expect the licenseeG or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law 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.

        Amended: April 2016
        October 2010

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