According to the latest annual benchmark report, the number of anti-money laundering (AML) fines assessed against financial institutions reached its highest level in six years in 2021, though the penalty amounts associated with those enforcement actions dropped noticeably.
According to Kroll's Global Enforcement Review 2022, which was released Tuesday, 55 money laundering fines totaling $1.6 billion were issued in 2021. Despite dealing with the Covid-19 pandemic, regulators handed out approximately $2.2 billion in penalties across 45 AML actions in 2020.
The 55 fines issued in 2021 are the highest amount seen by Kroll since its data began in 2016, which is the most recent year available. Meanwhile, the $1.6 billion is the vendor's third-lowest total, trailing only 2016 ($889 million) and 2019 ($444 million).
In an emailed press release, Malin Nilsson, managing director of financial services compliance and regulation at Kroll, stated, "Now that AML-related concerns and failings have resulted in many large banks being sanctioned, regulators are beginning to pay increased attention to other areas of financial services."
Fines against cryptocurrency firms for AML violations are expected to become a trend in 2021, according to Kroll.
BitMEX's $100 million settlement with the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network (FinCEN) in the United States in August 2021 for multiple violations of the Bank Secrecy Act (BSA) and other anti-money laundering laws was specifically mentioned.
Of course, a shift in focus to cryptocurrency companies does not mean traditional financial institutions are safe. Last week, USAA Federal Savings Bank agreed to pay $140 million to FinCEN and the Office of the Comptroller of the Currency as part of consent orders for failing to maintain its BSA/AML compliance program.
According to Kroll's analysis, the most common areas of deficiency cited in US enforcement actions in 2021 were AML management, suspicious activity monitoring, customer due diligence, and compliance monitoring and oversight. Since 2016, AML management and suspicious activity monitoring have been the most frequently mentioned areas in both the United States and around the world.
According to the report, fines in the United States accounted for 36% of the global total in 2021. The Netherlands was not far behind, with a 480 million euro ($592.7 million) settlement with ABN AMRO nearly matching the US total ($592.7 million).
By fLEXI tEAM