Thursday, February 20th, 2020
An analysis of the global anti-money laundering (AML) penalties that took place between January 1st and December 31st, 2019 by the firm Encompass Corporation discovered that there were a total of $8.14 billion of fines issued. This was for a total of 58 (AML) violations.
In the US, regulators were the most aggressive, handing out a total of 25 penalties for a total value of $2.29 billion. Following closely second was the UK, with 12 fines that totaled $388.4 million. By far, the largest single monetary fine was issued by France at $5.1 billion. This was due to the Swiss bank UBS, after it was found guilty of illegally seeking clients and laundering the proceeds of tax evasion.
Both US and UK regulators struck Standard Chartered with a fine for having poor money-laundering controls and breaching sanctions against countries, including Iran.
According to Encompass, the average monetary fine in 2019 was $145.33 million. Slightly under half of money laundering fines given out in 2019 were to banks (28 of 58).
Outside the US and the UK, regulators were busy issuing fines in other countries such as Belgium, Bermuda, France, Germany, Hong Kong, India, Ireland, Latvia, Lithuania, the Netherlands, Norway and Tanzania.
Wayne Johnson, the co-founder and CEO of Encompass Corporation had this to say:
“Since 2015, annual AML penalty figures have been steadily rising each year. Multi-million dollar fines have been commonplace for a while, but we are now seeing more penalties of one billion dollars or over, with two in 2019 alone.”
In the past, most of these fines were given to banks, but in 2019, the proportion was less than half, which demonstrates that money laundering is a “general business issue”, not just one that is attributed to financial services.
Regulators overseeing the gambling/gaming sector were especially busy in 2019, handing out five fines, all of which were valued at well over $1 million. The highest was $7.2 million.
What’s intriguing is that four of these fines were in the UK, which indicates the country’s clamping down on this issue.
Johnson believes that, since both the UK and the US have active regulatory bodies and transparent regulatory cultures, we will continue to see the largest number of fines coming from there. Curiously, we are also seeing an increasing amount of fines emanating from other jurisdictions.
In 2019, penalties were issued by 14 countries as opposed to just three in 2009.
The year 2014 holds the record for the highest total value of AML fines at $10.89 billion. However, this staggering number is due to a very rare penalty of $8.9 billion. Without this figure, 2019 would still be ahead.
A Global Problem
The war against anti-money laundering continues to be waged as more regulatory bodies are cracking down on this international problem. There is no doubt that more implementation of standards to stop this crime continues to grow. Money laundering fines are certainly one standard which can considerably curb this problematic issue.