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AML penalties hit $2.2 billion in 2020 as regulators crack down on financial crimes

AML penalties hit $2.2 billion in 2020 as regulators crack down on financial crimes

Fines for anti-money laundering (AML) failings by regulated institutions were five times higher in 2020 than 2019, totalling $2.2 billion.

The findings come from Kroll’s annual Global Enforcement Review 2021, which shows that, globally, 45 fines for AML failures were issued in 2020, the same as in 2019. Moreover, the first half of 2021 seems to be following suit, with 17 fines issued between January and July this year, just under half of 2020’s year-end total.

Despite the consistency in the volume of fines issued, the total value of AML enforcement has rocketed, reaching $2.2 billion at the end of 2020, five times higher than in 2019 and over two-thirds of the record levels recorded in 2018. Similarly, the total value of AML fines as of June 2021 is nearly half of the 2020 total, standing at $994 mn.

Claire Simm, managing director, financial services compliance and regulation at Kroll, comments: “The figures show that investigations were not paused for Covid-19. While the number of fines remained constant, the value of fines surged as regulators imposed tougher penalties, continuing to send the message that despite any obstacles, enforcement remains a top priority for non-compliant behaviour.

“These fines show that across the world, regulators continue to put high importance on financial crime enforcement. We can expect to see mega-fines and criminal enforcement continue through 2021 and beyond."

The findings come as the FCA pursued its first criminal charges for money laundering failings at NatWest, which saw the bank fined £264.8 million for a catalogue of offences which resulted in £365 million being washed through the bank by a single customer.

Comments: (2)

Judit Toth
Judit Toth - kompasbank a/s - Vedbæk 14 December, 2021, 10:23Be the first to give this comment the thumbs up 0 likes

These results do no just show that the regulator is putting high importance on financial crime enforcement, but it also shows that either the banks' measures are not good enough, despite the efforts and technology development that many have been talking about. Or that there is still en interest to maintain the status quo and allow financial crime to happen. 

A Finextra member
A Finextra member 13 January, 2022, 23:171 like 1 like

Banks are fined but no-one ever seems to go jail - could this be because regulators will never get the same revenues from fines by going after individuals as they do with banks?

It sometimes looks like banks are making risk-based decisions on AML fines v profits, it sounds ridiculous, but could it possibly be happening?

Then there is The United Nations Office on Drugs and Crime (UNODC) estimate that 2% - 5% of global GDP is laundered each year, that is over $2trn or more, and only a tiny fraction is caught by bank AML procedures. $2trn is a huge sum of money - where does it all go? It must be hiding in plain sight in society. But how can this be given AML controls operate by assuming counterparties are guilty until they prove their innocence?

There is something very, very wrong with the global approach to financial crime - it is almost like a racket in itself.

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