Skip to main content

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

Labels:

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

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Small business will be excluded from fraud law.

  Min­is­ters are plan­ning to exclude small busi­nesses from anti-fraud legis­la­tion by nar­row­ing the scope of a crim­inal offence tar­get­ing com­pan­ies that fail to pre­vent eco­nomic crimes. MPs and anti-cor­rup­tion cam­paign­ers had hoped the gov­ern­ment would seek to amend the eco­nomic crime and cor­por­ate trans­par­ency bill to ensure the new offence covered all com­pan­ies. The plans to limit the scope of the amend­ments will also dis­ap­point those who had hoped the legis­la­tion would remove key hurdles to the pro­sec­u­tion of white-col­lar crime. A new «fail­ure to pre­vent» offence for fraud would bring it in line with exist­ing sim­ilar cor­por­ate offences for bribery and tax eva­sion. At present, pro­sec­utors need only prove that organ­isa­tions lacked «reas­on­able» or «adequate» con­trols to pur­sue the offence in bribery and tax eva­sion cases. «It would be much more sens­ible for the gov­ern­ment to provide strong guid­ance for SMEs on what these pro­ce...
3 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more