14 January 2020
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The US and UK financial regulators lead the way in anti-money laundering (AML) penalties issued in 2019, collectively accounting for more than 30% of the $8.14bn total handed out in fines globally.
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 $8.14bn of fines were handed down for a total of 58 AML-related breaches.
Regulators in the US were most active, handing out 25 penalties totalling $2.29bn followed by the UK with 12 fines totalling $388.4m while the largest single monetary fine was $5.1bn in France. This was down to Swiss bank UBS after it was found guilty of illegally soliciting clients and laundering the proceeds of tax evasion.
Issued by both US and UK regulators, Standard Chartered was fined for poor money-laundering controls and breaching sanctions against countries including Iran.
Encompass said the average monetary fine in 2019 was $145.33m. Just under half of money laundering penalties given out in 2019 were to banks (28 of 58), compared to two-thirds in 2018 (20 of 29).
Fines were handed down by regulators across multiple jurisdictions beyond the USA and UK: these include Belgium, Bermuda, France, Germany, Hong Kong, India, Ireland, Latvia, Lithuania, the Netherlands, Norway and Tanzania.
Wayne Johnson, co-founder and CEO of Encompass Corporation, said: "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."
2014 still holds the record for the highest total value of AML 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.
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