Money Laundering Crimes During COVID-19 Spur Record Fines

Money Laundering Crimes During COVID-19 Spur Record Fines

Fines For Money Laundering Crimes Increase 

According to Kroll’s Global Enforcement Review, which provides insights on global enforcement trends with a focus on the financial services industry, an upsurge in money laundering crimes during the coronavirus pandemic has led to authorities handing out a total of $2.2 billion in money laundering fines in 2020. This number was about five times higher than the preceding year, and is only projected to increase as regulators tighten their grip and continue to deliver substantial fines for failures in Anti-money Laundering (AML) and suspicious activity monitoring. 

Financial Institutions Take the Biggest Hit For Fines

The industry that received the largest burden? Financial institutions. An entity is considered a financial institution if it deals with monetary transactions such as investing, loan disbursements, deposits or any other exchange involving currency. With a plummeting tolerance for AML failures and money laundering crimes, penalties for negligence in lack of proper AML screening is increasing exponentially. Ollie Williams, a Senior Contributor at Forbes, highlights that Australia led the charts last year in issuing a $1.3 billion fine to Westpac bank after a breach was discovered involving customers transferring money to the Philippines with a clear indication of money laundering and potential child exploitation. Sweden followed suit with dishing out $386 million to institutions that hadn’t performed AML screening on their excessively large Russian client base. And finally, taking third and fourth place in issuance of AML fines in 2020, was Hong Kong and the United States respectively. 

The Real Threat is Inaction

Although these numbers are alarming, the biggest threat may still be posed by countries not taking any action to alleviate the corruption taking place in the realm of money laundering and suspicious activity. Countries that didn’t make the list, such as Switzerland and the United Arab Emirates, have created a certain level of distrust as both are heavily suspected of performing money laundering activities. However, luckily, Dubai has recently introduced a special court specifically focused on combating money laundering, with other major cities following suit. 

AML Screening is More Crucial Than Ever To Combat Money Laundering Crimes

These fines and regulations are only projected to increase, and if there’s a time to implement proper AML screening and risk monitoring software to prevent future corruption, it’s now. Luckily, taking proper action to protect your company from potential risk exposure will not only prevent these hefty fines, but protect your company’s future and reputation, which are 100% at stake in this regulatory climate. Truth Technologies provides a complete risk compliance platform including sanction screening, Anti-Money Laundering (AML) and Know Your Customer (KYC) protection, and supplementary reporting. Click here to learn more about Truth Technologies and how we can help you meet your AML/KYC compliance software needs. 

Read the full article here.

 

Leave a Reply