The number of anti-money laundering (AML) fines assessed against financial institutions globally reached its highest amount in six years during 2021, though the penalty amounts associated with those enforcement actions dropped notably, according to the latest annual benchmark report.
Kroll’s Global Enforcement Review 2022, released Tuesday, recorded 55 money laundering fines issued in 2021 totaling approximately $1.6 billion in value. The fine total amount is a drop from 2020, when regulators handed out approximately $2.2 billion in penalties across 45 AML actions—despite contending with the onset of the Covid-19 pandemic.
The 55 fines issued in 2021 is the highest amount observed by Kroll since 2016, which is as far as its data dates back. Meanwhile, the $1.6 billion in value is the third lowest total the vendor has recorded, behind 2016 ($889 million) and 2019 ($444 million).
“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,” opined Malin Nilsson, managing director of financial services compliance and regulation at Kroll, in an emailed press release.
Kroll noted an emerging trend in 2021 was fines against cryptocurrency firms for AML violations.
Specifically alluded to was BitMEX’s $100 million settlement agreed to with the Commodity Futures Trading Commission and Financial Crimes Enforcement Network (FinCEN) in the United States in August 2021 for multiple violations of the Bank Secrecy Act (BSA) and other AML laws.
Of course, a potential shift in focus to cryptocurrency firms doesn’t mean traditional financial institutions are in the clear. Last week, USAA Federal Savings Bank agreed to pay $140 million as part of consent orders reached with FinCEN and the Office of the Comptroller of the Currency for failures maintaining its BSA/AML compliance program.
Other findings
Kroll’s review observed AML management, suspicious activity monitoring, customer due diligence, and compliance monitoring and oversight as the most frequent areas of deficiency cited in U.S. enforcement actions in 2021. AML management and suspicious activity monitoring have historically been the most frequent areas cited—both in the United States and globally—since 2016.
The report noted U.S. fines accounted for 36 percent of the global total in 2021. Not far behind was the Netherlands, where a 480 million euro (then-U.S. $575 million) settlement with ABN AMRO alone nearly matched the U.S. total ($592.7 million).
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