UK regulators hand out $388m in AML fines

UK regulators handed out a total of $388.4 million in fines for Anti-Money Laundering (AML) related incidents last year, according to new research.

Analysis of global AML penalties between 1 January and 31 December 2019 by automated Know Your Customer (KYC) solutions firm Encompass Corporation found that a total of $8.14 billion of fines were handed down for a total of 58 AML-related breaches, with the UK coming second only to the US.

The analysis showed that 2019 was record year in terms of number of penalties handed out, ahead of the previous record of 47 in 2016.

Businesses in the UK were slapped with 12 AML fines, while the regulators in the US handed out 25 penalties totalling $2.29bn.

This was followed by India, with 5 fines totalling $455,000, Belgium on 3 fines totalling $336.7 million and Latvia with 3 fines totalling $4.8 million.

However, whilst regulators in France and Germany issued fewer fines with just one each they came to $5.1 billion in France- the largest single monetary fine last year- and $16.5 million in Germany.

Less than half of penalties given out in 2019 were to banks (28 of 58), compared to two-thirds in 2018 (20 of 29).

2014 still holds the record for the highest total value of fines at $10.89bn, but this includes an anomalously large penalty of $8.9bn. If this were to be removed, 2019 would take the lead.

The average monetary fine for AML infringement in 2019 was $145.33m.

Commenting on the findings, Wayne Johnson, co-founder and chief executive of Encompass Corporation, commented: “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.

“Historically, the majority of these fines have been given to banks, but this year the proportion was less than half, demonstrating that money laundering is now recognised as a general business issue, not just one that is specific to financial services.”

He added: “We are not expecting the spotlight on money laundering to dim. The continued and increased focus on this area highlights the severity with which it is viewed at a global level, which is not surprising given the negative economic and societal repercussions it can have.”

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