Anti-money laundering (AML) regulations, audits and penalties continue to rise in 2020. Money laundering, terrorist financing, corruption, bribery, and all other financial crimes have many negative consequences, both economically and socially. We are closely witnessing the work that governments and AML regulators are doing to eliminate these negative consequences. All local and international AML regulators, notably FATF, European Union and Wolfsberg Group, aim to guide the fight against financial crime.
With the development of technology, access to financial instruments becomes easier. Although this has made our lives easier, it has created various opportunities for criminals. Gaps in emerging industries such as the crypto industry create major financial crime risks.
When we look at the total AML penalties in recent years, we observe an increase in the total penalty amount. Failures in the compliance processes of financial institutions cause them to face heavy fines. While the AML penalties given in 2018 were approximately $ 4 billion, the AML penalties given in 2019 increased by approximately 2 times to approximately $ 8 billion. When we examine some of the data announced in 2020, we see that the AML penalties given in the first half of 2020 are close to 6 billion dollars. Some of the reasons for the AML fines are due to deficiencies in the "Know Your Customer", "Customer Due Diligence" and "Monitoring Suspicious Transactions" procedures.
In this article, we will share with you the AML penalties issued by the regulators in 2020. If you have any news you want to add, feel free to contact us.
(Will be updated)
Sri Lanka Fines 2 Banks, 3 Finance Firms for AML Failures
Sri Lanka’s Financial Intelligence Unit fined two banks and three finance companies for violating anti-money laundering obligations. According to the FIU's statements, the reasons for the penalties include violations of Policy Exposed Persons (PEPs) and sanction screening and implementation of customer due diligence procedures.
FCMC fines Signet Bank for breaching AML rules
The Financial and Capital Market Commission is a public body that oversees financial institutions in Lithuania. FCMC fined Signet Bank of Latvia 906,610 Euro for violating anti-money laundering and anti-terrorism financing (AML) regulatory requirements. The reasons for the fines include the Bank's inadequate internal control system, customer-based risks and violations and deficiencies regarding risk management.
New York Regulator Fines Deutsche Bank for AML Failures
The New York State Department of Financial Services (DFS) imposed penalties on Deutsche Bank AG, the New York branch and Deutsche Bank Trust Company America for AML compliance failures as well as correspondent banking relationships with Danske Bank Estonia and FBME Bank. Deutsche Bank faced a penalty of $ 216.1 million as a result of this decision.
Swedish SEB Bank Fined for Poor Anti-Money-Laundering Measures
The Swedish Financial Supervisory Authority (FSA) fined SEK 1 billion (US $ 107 million) for failing to provide adequate anti-money laundering (AML) measures at its subsidiaries in the Baltic countries of Sweden's SEB bank. The Swedish Financial Inspection started to examine the SEB in 2015 in coordination with officials in Estonia, Latvia and Lithuania. The investigation was completed in 2019 and showed that "SEB's subsidiaries in the Baltic are exposed to a high risk of money laundering".
FCA fines Commerzbank London £ 37.8 million for AML violations
The UK's financial regulator, the Financial Conduct Authority (FCA), fined the Commerzbank London branch £ 37.8 million for violations of AML controls. The FCA said in a statement that the violations stemming from Commerzbank pose great financial crime risks and damage the stability and integrity of the financial system in the UK.
As a result of FCA's audits, Commerzbank London detects three major failures, including the failure of periodic due diligence on its customers. According to FCA's audit report, the bank was also found to be insufficient in the control procedures of money laundering risks in customer transactions. Also, FCA found that the bank did not have adequate risk management systems.
HK regulator imposes $25.2m fine on Guotai Junan Securities
Hong Kong's Securities and Futures Commission (SFC) imposed a $ 25.2 million fine on Guotai Junan Securities (Hong Kong) Limited for violations of anti-money laundering processes. The reasons for the AML penalty include the failure to regularly monitor customer transactions and delays in reporting processes.
BNP Paribas Chinese Unit Fined for Anti-Money Laundering Violations
The Chinese unit of European banking giant BNP Paribas has been fined 2.7 million yuan ($378.200) for failing to properly verify customer identification and report significant and suspicious transactions by the Chinese central bank. AML penalties in China are not limited to this. The Chinese Central Bank recently fined China Minsheng Banking Corp. 23.6 million yuan and China Everbright Bank 18.2 million yuan for failing to ensure AML compliance. And, Brokerage Huatai Securities Co. Ltd. has been fined 10.1 million yuan for similar AML violations.
Kenya fines 5 banks $ 3.75 million for anti-money laundering violations
KCB Group KCB.NR, Equity EQTY.NR, Co-op Bank Kenya COOP.NR, StanChart Kenya SCBK.NR and Diamond Trust DTK.NR are 5 banks that faced AML fines. Five commercial banks operating in Kenya were fined $ 3.75 million due to disruptions in AML compliance processes. In addition, 5 banks were fined $ 4 million in Kenya in 2018 for not reporting suspicious transactions.
Online casino fined £3 million for "systemic" AML failings
The Gambling Commission fined Mr. Green £ 3 million for AML violations. As a result of the audit, the Gambling Commission found that Mr. Green had not made a proper risk assessment. Failing to implement the Know your customer and customer due diligence procedures, Mr. Green became the ninth gambling business to face an AML penalty. With this penalty, it was once again revealed how important AML regulations are in the casino industry.