Fines for AML, KYC and sanctions violations up 160 per cent in 15 months

Fernergo has released its findings on financial institution fines which shows that in December 2019 global penalties totalled US$36 billion for non-compliance with anti-money laundering (AML), know your customer (KYC) and sanctions regulations.

According to Fernergo, which includes AML, KYC and sanctions events in the client lifecycle management processes it provides for financial institutions, says fines related to AML, KYC and sanctions violations increased in the 15 months since its last report by 160 per cent.

Additional fines

An additional US$10 billion in fines for non-compliance with AML, KYC and sanctions regulations were imposed in 2019 according to the report. 

Fernergo says financial institutions were fined a further US$82.7 million for breaches of the Markets in Financial Instruments Directive (MiFID) and data privacy regulations.

Geographic differences

Sanctions violations make up almost 40 per cent of 2019 fines. Two thirds of all fines issued by US regulators were aimed at European financial institutions for AML breaches and sanctions violations with countries such as Iran, Cuba, North Korea, Sudan, Libya and Myanmar.

In the Asia Pacific region, the majority of penalties were levied by regulators for AML and KYC shortcomings. Penalties were imposed on 14 entities in India, 10 in Chinese Taipei and 8 in Pakistan.

Future prospects

Twelve of the world’s top 50 banks were fined for non-compliance with AML, KYC and sanctions violations in 2019.

Global compliance and regulatory director at Fernergo, Laura Glynn, says she expects more penalties to arise from non-compliance in 2020.

Categories: Trade Based Financial crimes News

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