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Fines for money laundering rise by 50%

 Fines for not pre­vent­ing money laun­der­ing surged more than 50 per cent last year, fuel­ling warn­ings that pen­al­ties are fail­ing to curb bad beha­viour.

Money laundering
Fines for fail­ing to pre­vent money laun­der­ing and other fin­an­cial crime surged more than 50 per cent last year, fuel­ling warn­ings that pen­al­ties are not curb­ing bad beha­viour and sys­temic flaws that allow crim­in­als to chan­nel money through the global fin­an­cial sys­tem.

Banks and other fin­an­cial insti­tu­tions were fined almost $5bn for «anti-money laun­der­ing» infrac­tions, breach­ing sanc­tions and fail­ings in their «know your cus­tomer» sys­tems in 2022, bring­ing the total since the global fin­an­cial crisis to almost $55bn, data from com­pli­ance firm Fen­ergo shows.

Fines typ­ic­ally come sev­eral years after infrac­tions, so the latest fig­ures do not cap­ture fin­an­cial insti­tu­tions caught off­side by the glut of sanc­tions intro­duced in the wake of Rus­sia’s inva­sion of Ukraine last year.

McCart­ney, a professor at Birmingham University, said that in the wake of fines, com­pan­ies usu­ally put more resources into com­pli­ance but remedi­ations could be «quite poorly enforced and mon­itored both within the firm and by the reg­u­lat­ors them­selves».

The US has been the most aggress­ive imposer of pen­al­ties, chalk­ing up $37bn in fines, fol­lowed by about $11bn in Europe, the Middle East and Africa, and just over $5.1bn in the Asia-Pacific region, accord­ing to the Fen­ergo data.

Den­nis Kelle­her, chief exec­ut­ive of Wash­ing­ton-based fin­an­cial reform advocacy group Bet­ter Mar­kets, is also scep­tical of the effect­ive­ness of fines in clean­ing up the fin­an­cial sys­tem.

BNP, UBS, Gold­man and JPMor­gan declined to com­ment.

Stand­ard Chartered said it saw «fight­ing fin­an­cial crime as an ongo­ing pro­cess of improve­ment and will con­tinue to invest in our people, sys­tems and pro­cesses». HSBC said it was «deeply com­mit­ted to com­bat­ing fin­an­cial crime» and had made «sig­ni­fic­ant invest­ments» to bol­ster its cap­ab­il­it­ies.

www.sba.tax

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Comments

  1. Sam20 January 2023 at 12:11

    Fines of just $55bn within a year for banks and financial institutions is pocket change. Let's see $150bn or $250bn and then we will see them really putting measures in place.

    ReplyDelete
    Replies
    1. Thomas20 January 2023 at 12:18

      50% is decent but not nearly enough because these institutions work with that kind of money daily so they can afford to pay a few bn for a fine.

      Delete
  2. Albert20 January 2023 at 12:44

    It's a start but increase it yearly! Increase it with 25% or 50% each and every year until every bank has top-notch anti-money laundering measures in place.

    ReplyDelete
  3. Cesar20 January 2023 at 15:22

    I agree with what professor McCartney said that these remediations are poorly enforced and monitored by everyone involved. So they actually don't do much.

    ReplyDelete
    Replies
    1. Anthony M.20 January 2023 at 16:04

      Agree. We're just throwing more money at a problem that demands other solutions.

      Delete

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