2020 AML Fines and Penalties

2020 AML Fines and Penalties

2020 AML fines and penalties generally includes policies, laws and regulations to prevent financial crimes. AML is a worldwide term for preventing money laundering. There are global and local regulators established in the world to prevent financial crimes, besides each country has a different 2020 AML fines and penalties. Organizations liable to comply with AML laws must comply with these regulations. Complying with these regulations can be a complex process for banks and financial institutions.  That’s why financial institutions have AML compliance departments that ensure AML compliance.

Why is AML Compliance Important?

Criminals attempt to launder money to hide their crimes and money, to show the sources of their funds legally. Prevention of money laundering plays a very important role for financial institutions. Financial crimes will continue to increase if financial institutions do not comply with 2020 AML fines and penalties. In addition, regulators impose various penalties on banks and financial institutions that do not comply with the regulations. For example, while the AML fines given in 2018 were approximately $4 billion, the AML fines imposed in 2019 nearly doubled, reaching approximately $8 billion. In 2020, this number is more than in 2019.

How Do Banks and Financial Institutions(FIs) Ensure AML Compliance?

2020 AML fines and penalties are constantly updated and changed. This is why banks and financial institutions’ compliance with AML regulations can sometimes be complicated. Constantly changing regulations need to be followed. With increased inspections and penalties, FIs should pay more attention to compliance with these regulations. Compliance processes of FIs are provided by the organization’s AML compliance officer. AML Compliance Officers comply with AML regulations and regulate business operations so as not to violate these regulations.

Another goal of the compliance officer is to protect the financial institution from involvement in any financial crime. However, considering that we live in the world of technology, executing this process manually makes it quite in-efficient and more prone to error that cause false-positives. The reason for this is that there are huge amounts of sanctions and watch lists of more than two hundred countries published in the world.

The UK AML Fines

The Financial Conduct Authority (FCA) is the UK’s independent government agency responsible for the Treasury. The FCA regulates various companies and financial markets in the UK and acts as a regulator for many organizations. FCA’s goal is to create a fair market for large companies.  The UK imposed the second highest money laundering prevention fine in 2020 after the United States. In June, the British FCA fined the German institution Commerzbank $47 million due to the failure of detecting suspicious activities.

Europe AML Fines

In 2020, the European Union’s anti-money laundering practices reflect the aggressive approaches of the United States and the United Kingdom. In June 2020 AML fines and penalties, in collaboration with Estonian, Latvian and Lithuanian authorities, the Swedish FSA fined SEB Bank $107 million for failing to implement money laundering prevention measures at its subsidiaries. In October 2020, a prosecutor in Frankfurt, Germany, fined Deutsche Bank over $15.9 million for delaying a report of suspicious activity related to the money laundering scandal at Danske Bank A / S.

Global AML Fines

In Malaysia, the aftermath of the Goldman Sachs scandal fined banks an additional $2.5 billion and ordered the return of assets of $1.4 billion. Malaysia’s mandatory actions were added to those of China, Hong Kong, Singapore, Taiwan, India and Pakistan, which jointly imposed a fine of nearly $4 billion to prevent money laundering. Pakistan’s fines have increased by 845% since 2019 in response to FATF, which has highlighted strategic flaws in the 2020 AML fines and penalties. In 2020, significant law enforcement measures were taken in many global jurisdictions. In March 2020, Kenya fined five commercial banks $3.75 million for terminating the AML process, and in June, the Hong Kong SFC fined Guotai Junan Securities $25.2 million for oversight errors.