In 2020, twenty-eight financial institutions from fourteen countries were issued fines in excess of £100,000 USD for Anti-Money Laundering (AML) violations, with Q3 seeing the highest total of penalties.
Money-laundering is a problem that will not go away, no matter what stringent procedures financial institutions put into place. Exactly how much money is laundered each year is, at best, a good guess. Some bodies have tried to put a figure on it, such as the U.N.’s Office on Drugs and Crime.
They’ve estimated a figure of USD 4.5 trillion, which is close to 5% of global GDP. However, this staggering number is likely to be only the tip of the iceberg.
Financial regulators have been trying to clamp down hard, and this has been particularly evident in the USA and Australia, where regulators have been more aggressive than some other nations in the issuing of penalties.
According to Kyckr’s first annual AML Bank Fines 2020 Report, in 2020, U.S. regulators issued AML-related fines amounting to at least USD 1,557,521,256. The Australian regulators issued fines amounting to USD 946,563,168. Surprisingly, given its extensive financial dealings, the U.K. only issued a fine of $51,620,981.34 (£37,805,400), which was given to Commerzbank for failing to have adequate AML systems and controls between 2012-2017. This, of course, is likely to be down to the U.K. already having the correct stringent procedures in place minimising the problem.
Below is a list of the financial institutions fined more than $100,000 USD and the amount.
Australian AML Fines 2020
- WestPac: Fined $945,090,300.00, £692,699,643.35
- State Street Bank: Fined $1,472,868.00, £1,079,531.91
Bahrain AML Fines 2020
- Future Bank: Fined $98,139,207.00, £71,930,686.08
China AML Fines 2020
- BNP Paibas: Fined $378,200.00 £276,980.44
Germany AML Fines 2020
- Deutsche Bank: Fined $16,374,573, £12,001,668.92
Hong Kong AML Fines 2020
- Guotai Junan Securities: Fined $3,300,000.00, £2,418,720.01
- Bank of Communications: Fined $2,500,000.00, £1,830,912.50
Keny AML Fines 2020
- KCB Group, Equity, Co-op Bank Kenya, StanChart Kenya and Diamond Trust: Fined $3,750,000.00, £5,118,161.28
Latvia AML Fines 2020
- Signet Bank: Fined: $1,116,924.90, £818,645.03
Malta AML Fines 2020
- Sparkasse Bank: Fined $260,814.80, £191,163.02
- Lombard Bank: Fined: $412,379.80, £302,251.90
Paraguay AML Fines 2020
- Banco Itau: Fined $9,600,000, £7,030,704
Sweden AML Fines 2020
- Swedbank: Fined Fine: $432,154,800.00, £316,633,339.64
- SEB Bank: Fined Fine: $107,000,000.00, £78,373,063.10
UK AML Fines 2020
- Commerzbank: Fined $51,620,981.34, £37,805,400
US AML Fines 2020
- Industrial Bank of Korea: Fined $86,000,000.00, £63,033,309.44
- Bank Hapoalim: Fined $904,000,000.00, £662,142,514.46
- Deutsche Bank: Fined $150,000,000.00, £109,854,750.00
Commenting on the findings, Kyckr CEO Ian Henderson said: “2020 was a blockbuster year for AML related fines. Regulators across the globe took aggressive action against violators, handing down major financial penalties and, in some cases, lengthy prison sentences to the individuals involved. As we move into a new year, it’s critical that compliance teams be proactive to ensure they do their part to prevent financial crimes”.
The methodology used in the Kyckr AML Bank Fines 2020 Report:
- Violation and fine information were collected by manually reviewing all public announcements made by regulators globally from January 1, 2020, to December 31, 2020.
- In all cases, the fines were related to historic offences that had taken place in previous years.
- These findings include only AML related fines and do not include fines pertaining to sanctions, MIFID, and data privacy-related violations.
- These findings include only fines given to banks that exceeded $100,000 USD.
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