This week in one line: ADGM has fined an audit firm and its principal after an inspection, the FSRA is consulting on DeFi (decentralised finance) controls, and the FTA’s supplier checks for input VAT are now in force.
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Top story
If it isn’t on file, it can’t prove compliance
On 9 October, ADGM announced that its Registration Authority has fined an audit firm $65,000 (Dh239,000) and its registered audit principal $35,000 (Dh129,000), following an audit monitoring inspection. ADGM found the firm’s audit of an ADGM-registered entity fell short of International Standards on Auditing, citing fraud-risk assessment, audit evidence and documentation. It said work not evidenced on file cannot establish compliance. It reduced each penalty by $5,000, noting cooperation and remediation, and said no misstatement was proven.
Sources: ADGM announcement | Decision Notice: firm | Decision Notice: principal
So what? ADGM’s point is that work not evidenced on file can’t demonstrate compliance. The same test applies to your own CDD, screening and review records. This concerns one audit and says nothing about other firms.
Relevant if you’re an ADGM-registered entity, or you keep records a regulator may inspect.
Also this week
FTA supplier verification rules are now in force
FTA Decision No. 13 of 2026 took effect on 1 October, as covered in last week’s issue. PwC says it sets the measures taxable persons must follow to verify suppliers and supplies before deducting input VAT, and to document those checks, in addition to the existing input tax conditions. KPMG explains that, under Article 54(bis) of the VAT Law, the FTA can deny recovery where the checks weren’t carried out and it establishes that the input tax relates to a supply chain involving tax evasion.
Sources: FTA legislation page | PwC | KPMG UAE
So what? The checks need an owner and a record. Confirm who signs off supplier and supply verification across procurement, accounts payable and VAT return review, and that the evidence sits in one place.
Relevant if you’re VAT-registered.
FSRA consults on DeFi (decentralised finance) risk management guidance
On 6 October, ADGM’s Financial Services Regulatory Authority (FSRA) published Consultation Paper No. 5 of 2026, proposing DeFi Risk Management Guidance for Authorised Persons and Recognised Bodies. The draft covers governance and control, due diligence, financial crime controls, incident escalation, recordkeeping, auditability, competence and client asset safeguards. The FSRA is inviting feedback until 30 November 2026.
Source: ADGM announcement
So what? If you work with or alongside DeFi activity, compare the draft’s topics with your current controls and note any gaps before the feedback deadline.
Relevant if you’re FSRA-authorised or recognised, or you bank, serve or screen firms with DeFi exposure.
On the radar
- FTA Top-up Tax guide: the FTA issued a guide on 7 October on scope and registration for the UAE’s Qualified Domestic Minimum Top-up Tax. It says the tax applies to UAE entities in multinational groups with annual revenue of EUR 750 million or more in at least two of the four preceding fiscal years, for fiscal years beginning on or after 1 January 2025. If you work for or advise a multinational group, check whether it is in scope. FTA
- US beneficial ownership rule: according to the US Treasury, a final rule announced in August removes beneficial ownership reporting for US companies, while foreign companies registered in the US still report their foreign owners. If your checks rely on US ownership filings, note the change. US Treasury
Coming up
- Compliance Leaders Forum 2026, 21–22 October, Abu Dhabi: listed on the Arab Monetary Fund’s website, a two-day forum at the Marriott Hotel Downtown aimed at regulators, central banks, banks and compliance leaders. Its programme covers financial crime compliance topics including sanctions, transaction monitoring, fraud and scams, cross-border payments, AI and digital assets. A registration form is on the page. Arab Monetary Fund
Action of the week
Pick one recent customer or supplier due diligence file and check that every step you performed is evidenced on it.
SignPath Weekly is for general information only and is not legal, regulatory, tax, financial or compliance advice. It summarises the public sources linked in each item and may contain errors or become outdated, so check the primary source and take professional advice before acting. References to named companies report public actions as stated in the cited sources. The views expressed are the author's own and not those of any employer or organisation. To the fullest extent permitted by law, the author accepts no liability for loss arising from reliance on this newsletter. Spotted an error? Reply and I'll review and correct it.