Anti-money laundering (AML) enforcement remains a top priority for financial regulators across the world, in particular in the EU and UK (FCA). Despite the pandemic, regulators cracked down on financial services firms failures to deal with AML controls, imposed tougher penalties and undertook rather intrusive investigations on a number of high-profile financial institutions.During the first six months of 2021 regulators levied almost USD 1bn in fines, which is on track to match the surge to USD 2.2bn in 2020, up five fold in relation to the 2019 figure. The Times reported today on the latest in a string of investigations started by the FCA in respect of failures to deal with money laundering. Last month, the FCA warned bosses at Britain's biggest retail banks that they must do more to stop money laundering or would face personal consequences for failing to comply with the rules. In fact, the FCA has recently exercised its powers to initiate criminal proceedings against individuals for failures to comply with AML policies and controls.
Whereas large financial institutions have considerable AML resources, regulators are keeping a close eye on any meaningful red flags or failures in their AML compliance and regularly ask questions or impose reporting obligations on the AML systems in place. This type of close scrutiny is particularly challenging for FinTech companies whose AML processes are often not easily adaptable to the risks of a fast growing client base.
AML compliance failures are under the spotlight and are likely to trigger, intrusive investigative actions and serious reputational damage to companies.
Please get in touch if you would like to discuss AML challenges, including compliance, governance and risk! We have an experienced team of AML professionals ready to assist with any internal review or investigation in this field.
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