An analysis of money laundering fines around the world by Know Your Customer (KYC) solutions provider Encompass Corporationshows $8.14 billion in AML fines handed out in 2019 by regulators around the world.
A total of 58 AML penalties were handed down globally in 2019, making it a record year in terms of the number of penalties imposed. This is double the amount, and nearly double the value, of penalties handed out in 2018, when 29 fines of $4.27 billion were imposed.
Regulators in the US were most active, handing out 25 penalties totalling $2.29 billion followed by the UK with 12 fines totalling $388.4 million while the largest single monetary fine was $5.1 billion in France. Encompass says the average monetary fine in 2019 was $145.33 million. 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.
2014 still holds the record for the highest total value of AML fines at $10.89 billion, but this includes an anomalously large penalty of $8.9 billion. If this were to be removed, 2019 would take the lead.
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. Regulators in the gambling/gaming sector were particularly active in 2019, handing out five fines, all of which were well over $1 million and the highest being $7.2 million. Interestingly, four of these were in the UK, demonstrating a crackdown here.
“The USA continues to lead the way, having handed out the most penalties this year at 25 – more than twice the amount of the UK, the country in second place. Given that these two countries have transparent regulatory cultures and active regulatory bodies, we expect we shall continue to see the largest number of fines originate from here, but we are seeing activity from increasing numbers of jurisdictions as time goes on. For example, in 2019, penalties were handed out by 14 countries, compared to just three a decade ago in 2009.”