2020 money laundering fine values already surpass 2019

New research has revealed that the first half of 2020 has seen Anti-Money Laundering (AML) fine values globally totalling $706 million - compared to 2019’s full-year-total of $444 million.

Duff & Phelps' seventh annual Global Enforcement Review did, however, show that global totals of AML fines in 2019 and the first half of 2020 were down on the two previous years - and still below the yearly average of fine levels for the four-year period from 2015 to 2018.

Nick Bayley, managing director and head of UK regulatory consulting at Duff & Phelps, said that despite the uptick in AML fine amounts in 2020, there have been fewer massive fines imposed in the United States.

"This is very unlikely to reflect regulators attaching any less importance to AML compliance, it may simply be that the very largest financial institutions may be beginning to get their AML compliance in order, at last.”

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

These findings suggest that whilst U.S. regulators may have moved on from the mega-fines they imposed in previous years, AML remains an absolutely key focus for regulators globally.

The report also highlighted the four key AML failings from the last five years that regulators across the world have consistently identified through the fines they imposed: customer due diligence (115 significant cases); AML management (109 cases); suspicious activity monitoring (82 cases); compliance monitoring and oversight (62 cases).

Bayley concluded that the same areas are being sanctioned again and again.

“Firms should pay attention to the key AML failings that are consistently identified by regulators globally in their major enforcement actions," he stated. "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.”

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