AML fines and data breach cut in half in 2021
Happy New Year to all our readers and best wishes for 2022. To counter the feeling of déjà vu caused by the Omicron variant, I thought I would start the year on a positive note with the announcement that the value of the fight against money laundering money (AML) and data privacy fines have been cut by almost half globally in 2021 compared to 2020.
According to regtech company Fenergo, penalties incurred by financial institutions totaled $ 5.37 billion in the past year, up from $ 10.6 billion in 2020. In addition, the total number of fines imposed on institutions costs for non-compliance was around 176, up from 760 in the same period a year earlier.
Of the $ 5.4 billion in fines, non-compliance with anti-money laundering regulations amounted to $ 5.35 billion. Data privacy fines totaled $ 17.4 million, including $ 11.5 million for breaches of the General Data Protection Regulation in Europe.
The caveat, however, is that 2020 has been an exceptional year of enforcement action, many of which stem from the investigations into the 1Malaysia Development Berhad (1MDB) scandal. 1MDB’s impact was felt again in 2021, when the AmBank group agreed to pay a settlement of $ 698.3 million in February to the Malaysian Ministry of Finance for its role in the violations.
According to Fenergo research, the Europe, Middle East and Africa region saw the biggest increase in the value of financial sanctions, from just over $ 1 billion in 2020 to $ 3.4 billion in 2021 This is mainly due to France, which tops the list of countries in terms of value, and the $ 2 billion fine imposed on UBS for historic tax evasion by a French appeals court – which overturned the $ 5.1 billion fine imposed in 2019.
In the United States, which recorded the second highest value of fines, regulators issued $ 673.2 million in enforcement actions against foreign banks out of a total of $ 1.2 billion. Malaysia, the UK and the Netherlands round out the top five countries in terms of total fines.
The past year has also seen the rise of regulators targeting non-bank financial companies, such as digital asset service providers. For example, the US Financial Crimes Enforcement Network and the Commodity Futures Trading Commission fined crypto-trading platform BitMEX $ 100 million for AML violations.
Clearly, there is still a lot of work to be done to combat financial crime, in particular money laundering. In that of the banker In the January issue, Anita Hawser takes a look at the state of play of anti-money laundering compliance in Europe and asks the question: with six EU anti-money laundering directives and counting, where the approach apparently Europe’s waterproofing to fight financial crime and money laundering gone wrong? Can the establishment of a proposal for a pan-European anti-money laundering authority succeed where other supervisory institutions have failed?
Joy Macknight is editor of The banker. Follow her on twitter @joymacknight
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