Over US$ 352.5 Million of Fines Handed Out Globally in Last Four Months

Encompass Corporation, a fast-growing provider of intelligently automated Know Your Customer (KYC) solutions, recently carried out an analysis of Anti-Money Laundering (AML) related penalties handed down between 1 May and 31 August 2019.

Key observations from the analysis are as follows:

  • 20 AML penalties were handed down globally, totalling over $352.5 million
  • In the same period in 2018, four fines totalling $707 million were handed out
  • $339.3 million of fines given to banks and $13.1 million to firms in other industries ($50,000 to an individual)
  • The largest monetary fine was $336 million and the average was $18.5 million
  • Seven fines given out were $1 million or over
  • One business not given a monetary fine but instead shut down completely
  • AML fines incurred by three gambling and gaming companies in the UK, with the highest being $7.2m
  • Penalties handed down by regulators across multiple jurisdictions beyond the USA and UK: these were Belgium, Latvia, Norway, India and the Netherlands

This takes the total value of AML fines this year, from 1 January to 31 August 2019, to $8.07 billion – approximately 4.3 times the amount handed out over the same period last year ($1.87 billion).

Country* 1 May to 31 August 2019
Total value of penalties Number of penalties
Belgium $336,779,000 3
UK $10,662,000 4
USA $2,506,640 4
Latvia $1,100,000 1
Norway $1,003,532 2
India $455,000 5
Netherlands $0 1

Refers to country where the regulator/government agency that issued the penalty is based. 

 

Wayne Johnson, Co-Founder and CEO of Encompass Corporation, commented: “As 2019 runs on, we have seen yet another fine in the hundreds of millions, and we expect to see more large penalties over the remainder of the year. As we have noted previously, multi-million dollar fines are commonplace these days, as evidenced by the fact that seven of the 20 penalties given out from May to August were $1 million or higher.

In the year to date, around two-thirds of AML penalties were given to banks, but approximately a sixth were imposed on companies in the gambling/gaming and cryptocurrency sectors – highlighting the increasing attention these industries are getting as channels for money laundering. We expect to see this shift to non-financial services businesses continue in the future.

Large AML fines are often predominantly associated with the US and UK, since both countries have transparent regulatory cultures and active regulatory bodies, but in the last four months we have seen activity from regulators in multiple jurisdictions, with the largest fine originating from Belgium. This serves to show the importance being placed on the identification and prevention of money laundering at a global level. Given the current pace, we still think there is a good chance that 2019 could break the record set in 2014 for the highest value of AML fines given out in a year.”

Source:  Mondovisione.com


Encompass is a sponsor of the BIIA 2019 Biennial Conference and Wayne Johnson will be a panelist on the subject of Identitywhich has become a high growth business activity driven by AML, KYC, eKYC compliance requirements.