Governments and financial institutions have placed increasing emphasis in recent years on the need for increased vigilance with regard to Anti-Money Laundering (AML) rules. Some of the biggest fines in the history of AML have resulted from this increased vigilance. Significant fines may be incurred for breaking these rules. This blog post explores the nuances of AML fines, their consequences, and some of the largest fines ever issued.
Most Substantial AML Fines Issued in 2023
|Bank of Queensland
|Guaranty Trust Bank UK
|ADM Investor Services International Ltd
|In Touch Games
Binance - $4B
Binance Holdings Limited, the operator of the world's largest cryptocurrency exchange, Binance.com, has pleaded guilty to various violations, including breaches of the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and violations of the International Emergency Economic Powers Act (IEEPA). The guilty plea includes an agreement to pay over $4 billion to settle the U.S. Justice Department's investigation.
Changpeng Zhao, Binance's founder and CEO, who is a Canadian national, has also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program and has resigned as the CEO of Binance. The penalties are part of coordinated resolutions with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), as well as the U.S. Commodity Futures Trading Commission (CFTC).
Binance prioritized growth over compliance, serving U.S. customers without proper registration and lacking effective anti-money laundering controls. The penalties highlight the consequences of non-compliance in the crypto industry and stress the importance of adhering to U.S. laws.
Crown Resorts - $450m
Due to past infractions of Australian AML regulations at its casinos in Perth and Melbourne, Crown Resorts faces a hefty $450 million penalties from the Australian Transaction Reports and Analysis Centre (AUSTRAC). The financial intelligence agency has acknowledged that it disregarded the dangers connected to the company's casinos, including those of money laundering and terrorism funding. If accepted, the agreed-upon amount would be the third-largest penalty in Australian business history, but the Federal Court must yet provide final sanction. Ciarán Carruthers, CEO of Crown Resorts, has stated that the organization is committed to rectifying its previous transgressions and guaranteeing adherence to anti-money laundering laws.
Deutsche Bank - $186m
The Federal Reserve has fined Deutsche Bank and its U.S. affiliates $186 million for failing to make enough of an effort to remedy problems with money laundering control and other previously found shortcomings. The Fed has issued a warning to Deutsche Bank, stressing the potential for further and more severe fines if changes are not made, to prioritize fixing deficiencies relating to money laundering controls and other weaknesses. Deutsche Bank has been ordered by the Federal Reserve to enhance its risk and data management systems in addition to resolving money laundering issues. These issues stemmed from consent orders in 2015 and 2017, which were connected to insufficient controls in Deutsche Bank's interactions with the Estonian branch of Danske Bank. In response, Deutsche Bank has reaffirmed its dedication to swiftly resolving the found weaknesses. The bank added that funds put aside in earlier financial quarters had mainly paid the penalties.
Bank of Queensland - $50m
Regulators discovered that the Bank of Queensland (BOQ) had broken prudential norms and neglected to follow AML regulations, which may result in a $50 million criminal penalty. As with other banks that have violated regulations, BOQ's total expenses can increase as it makes the required system upgrades. In accordance with an independent contract with the Australian Prudential Regulation Authority (APRA) and AUSTRAC, BOQ must hold onto an extra $50 million until it takes corrective measures to allay the regulators' worries.
William Hill - £19.2m
A record punishment of £19.2 million is being assessed against William Hill and its sibling brand Mr Green, for violations of anti-money laundering and social responsibility regulations. Among the more heinous examples is allowing a consumer to establish an account and spend £23,000 without any checks in only twenty minutes. It was permitted for other clients to spend £18,000 in a single day and £32,500 in two days, all without appropriate income verification or anti-money laundering procedures.
Additionally, clients were able to deposit substantial sums of money without the required AML examination, resulting in sizeable losses. These mistakes happened, especially during lockdown, in spite of the Gambling Commission's clear cautions to businesses not to take advantage of the weak.
Guaranty Trust Bank UK Ltd - £7.6m
A £7.6 million punishment was imposed on Guaranty Trust Bank UK Ltd for serious flaws in its AML procedures and controls. The bank failed to determine the origins of cash and wealth and did not do enough due diligence on high-risk customers or customer risk assessments. The penalties were significantly higher because this was not the bank's first incident of such infractions. However, the bank chose to settle rather than challenge the Financial Conduct Authority's (FCA) conclusions, which qualified them for a thirty percent reduction in the fine.
ADM Investor Services International Ltd - £6.47m
ADM Investor Services International Limited, a commodities services broker, has been fined £6.47 million (about $7.9 million) by the FCA. The company's inadequate anti-money laundering procedures and controls led to the fine. The FCA emphasized that the company's extensive worldwide activities and its clientele—which comprises politically exposed persons (PEP) who are recognized to represent a greater risk of money laundering—were important contributors to the insufficiency of the anti-money laundering protocols.
In Touch Games - £6.1m
The UK gaming Commission (UKGC) fined an online gaming operator £6.1 million for neglecting to sufficiently handle money laundering and social responsibility issues. For seven weeks, In Touch Games—which operates 11 online gaming platforms in the UK—did not communicate with a client despite reports of odd play patterns and extended play hours. Despite red flags, a customer's claim of a £6,000 monthly income was also accepted without investigation. In 2019, it paid a £2.2 million settlement and, the following year, a £3.4 million fine. The Gambling Commission has warned that the penalty for repeat offenders will get harsher.
Nations with the highest AML Fines in 2023
In 2023, the following five nations had the highest AML fines:
How to Avoid AML Fines?
AML penalties have been issued in large quantities in 2023, much like in previous years. However, many of these fines are the result of cases that have been pending for several years owing to drawn-out legal proceedings and other factors. The results of lessened AML Compliance problems could not be seen for years because of modern AML Compliance initiatives and joint efforts by some governments and businesses. Sanction Scanner is still dedicated to helping you deal with AML Compliance issues in the future years, just like we have in the past. We are committed to using cutting-edge technology and our industry knowledge to make sure we are a dependable partner for improving your compliance procedures. You can rely on Sanction Scanner to deliver modern and efficient AML solutions as banking requirements change.