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AML fines falling, global survey suggests

By Michael Cross  >>

UK fines for money-laundering breaches totalled $47.6 million (£36.6m) in the first six months of 2020, according to a survey showing the level of fines declining globally. In 2019 the UK total was $127.9m (£98.2m).

The seventh annual Global Enforcement Review published by Duff & Phelps, a governance, risk and transparency specialist, shows the global totals of AML fines in 2019 and the first half of 2020 are down on the two previous years.

According to the report the US represents a much-reduced proportion (12%) of the global total in 2020 than in previous years, as regulators elsewhere impose their own large fines. In 2019, the US imposed the highest total value of AML fines ($199m), accounting for 45% of the global total. In 2018, the US accounted for 58% of total global AML fines, 72% in 2017 and 97% in 2016.

The decline is unlikely to reflect a drop in interest by regulators, said Nick Bayley, had of UK regulatory consulting. ‘It may simply be that the very largest financial institutions may be beginning to get their AML compliance in order, at last.’

Key AML failings consistently identified by regulators are:

  • Customer due diligence (115 significant cases)
  • AML management (109 cases)
  • Suspicious activity monitoring (82 cases)
  • Compliance monitoring and oversight (62 cases)

‘Despite the repeated messages in these enforcement cases it’s clear that market participants are continuing to struggle with their obligations in relation to client due diligence, transaction monitoring and AML management and oversight,’ Bayley said.

(Courtesy: The Law Society Gazette)