We are not here to scare you, but…

In 2022 hundreds of millions of dollars fines have been imposed on large organizations all over the globe, ranging from banks and financial institutions to gambling houses, to legal firms, for inability or failure to adhere to AML regulations.

OFAC, FinCEN, and other regulatory entities do not take AML regulations violations lightly. Besides, as the information is publicly accessible, the reputational damage is filing up, not to mention enormous legal fees and manhours.

Probably the most significant fine of $140 Million Civil Money Penalty against USAA Federal Savings Bank was announced by FinCEN earlier this year. The fine was imposed due to willful failure to accurately and timely report thousands of suspicious transactions, including customers using personal accounts for apparent criminal activity. A Bank with roots dating back to the 1900s and doing business mainly with members and veterans of the US Army appeared to be vulnerable to money laundering and other types of criminal financial activities. “USAA FSB willfully failed to ensure that its compliance program kept pace, resulting in millions of dollars in suspicious transactions flowing through the U.S. financial system without appropriate reporting,” said FinCEN’s Acting Director Himamauli Das. “Today’s action signals that growth and compliance must be paired, and AML program deficiencies […] must be promptly and effectively addressed.”

Let’s look at the reasons other significant fines were imposed during 2022:

AML & Sanction violations at the cryptocurrency market (Bittrex) fined $24M
AML & Cybersecurity failures (Robinhood Crypto) fined $30M
Failure to file Suspicious Activity Reports (Wells Fargo Bank)
fined $7M
Violation of the Ukraine related Sanctions (S&P Global, business & financial analytics) fined $78.750
Due Diligence & Ongoing Monitoring Violations (Michon de Reya, Law Firm, the UK) fined £232,500
Failure to identify players at risk of harm (888 UK Limited)
fined £9.4M
Failings in AML controls* (Ghana International Bank)      
fined £5.8M
Failing to ensure effectiveness of AML systems (TJM Partnership – a family office broking company) fined £2M
Failing to check clients for Money Laundering (Robeco, Netherlands) fined £2M
Breaching money laundering regulations (68 estate agents) fined >£500K in total
AML failures (Southern Cross SICAV plc, investment company) fined €300K
Failure to carry out proper customer Due Diligence (XNT Ltd, financial services) fined €245K

* Interestingly, there was no evidence of actual money laundering. The bank was fined due to the risk of money laundering as a result of using “deficient systems.”

Speaking of AML associated fines trends, according to Skillcast, the average size of AML fines is expected to increase “as financial institutions become more aware of the risks associated with money laundering and take steps to improve their compliance programs.”

To sum up: the top five countries with the most AML fines in 2022 are: the US, the UK, Switzerland, Singapore, and Hong Kong.

In addition, the US Financial Industry Regulatory Authority starts taking action against small firms that haven’t done a reasonable amount of monitoring to report suspicious activities and transactions. Read about it in our next review.

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