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Combatting money laundering is one of the top-tier challenges when it comes to the regulatory regime. Although Anti-Money Laundering (AML) regulations are becoming rigid over time, criminals are somehow managing to disrupt the system with their illicit activities. Identity verification, background checks and ongoing transaction monitoring are some recommendations by the Financial Action Task Force (FATF) which are enabling thousands of organisations to fight FinCrime. Nonetheless, terror financing and money laundering persist. Here are the top 40 money laundering and terror financing statistics that will surprise you.
What is AML/CFT Compliance?
AML/CFT compliance, short for anti-money laundering and countering the financing of terrorism, refers to the process of screening customers and businesses against global watchlists like PEPs during onboarding. This allows companies to identify the level of risk a customer poses to the business and avoid onboarding high-risk entities.
FinCrime – An Overview of the Global Picture
- Two to five per cent of the global GDP is laundered every year that is equivalent to approximately USD 800 billion to USD two trillion. (UNODC)
- 90% of the global money laundering activities go undetected each year. (United Nations)
- 41% of organisations have too many false-positive screening results. (Deloitte)
- 48% of banks have outdated technology to meet AML compliance requirements effectively. (Deloitte)
- 31% of the illicit flow of funds is blocked every year through Suspicious Activity Reports (SARs). (National Crime Agency)
- One out of five law firms fail to comply with anti-money laundering regulations. (Law Society of England)
- The global AML software market is expected to reach USD 1,770 million by 2023 with a CAGR of 15.2%. (Statista)
- 400 times, more money is laundered through fiat currency instead of cryptocurrencies. (Forbes)
- Only 0.1% of the laundered funds are recovered after an AML investigation. (University of Melbourne)
- Identity theft and synthetic identity fraud are the latest trends for money laundering and terror financing. (Forbes)
- Global FinCrime compliance spending on financial institutions reached $213.9 billion in 2021. (Finextra)
Financial Crime Facts and Figures [Regions with Most Cases]
- One-fifth of the law firms in the United Kingdom fail to comply with AML laws. (National Crime Agency)
- The biggest fine for AML violation in 2020 was levied on Commerzbank which was worth £37.8 Million. (FCA)
- Around 500,000 suspicious activity reports are submitted to the Financial Intelligence Unit every year. (UKFIU)
- FCA imposed a $126 million fine on Goldman Sachs Bank for ineffective risk management. (FCA)
- The art market is now among the prime targets of financial criminals. (HCMA)
- 200,000+ money laundering cases are reported to UK’s authorities every year. (NCA)
Last year, former chairman of a Spanish Bank, Jamie Botin was fined EUR 52 million for laundering money through a Pablo Picasso painting. The guilty was sentenced to 18 years of imprisonment. The investigation further revealed that Botin had possession of the painting for a long time to conceal the origin of money.
Suggested Read: Art Market in the Frame of Money Laundering
- 11 banks in the UAE were fined for inefficient anti-money laundering protocols. (Khaleej Times)
- UAE does not have a transaction threshold to detect suspicious activities. (FATF)
- The GCC complies with the FATF recommendations as a whole but individual breakdown indicates that UAE, Kuwait, Oman, Qatar, and Saudi Arabia. (FATF)
- The UAE follows 40+9 recommendations of the Financial Actions Task Force (FATF).
- Licences of 200 law firms were suspended in February 2021 for not abiding by the AML regulations. (Khaleej Times)
- The UAE Central Bank levied a Dh504,000 fine on an exchange house for poor AML compliance history. (CBUAE)
Considering the rapid increase in money laundering and terror financing activities in UAE, regulatory bodies of the region have teamed up to imposed stringent AML/CFT policies. In June 2021, targeted financial sanctions guidelines have been put forward by the Central Bank of UAE (CBUAE). In the same month, guidance for licenced financial institutions was also issued.
- The US was the first country to consider money laundering illegal. (FinCEN)
- Despite the US sanctions on North Korea, a business from the region was able to launder more than $1.5 million through the US financial system. (CNBC)
- The suspected laundering amount by North Korean organisations through the American banks was approximately $175 million. (CNBC)
- Action against 2,300 money mules was taken in 2020. (Department of Justice)
- US banks faced the highest number of AML non-compliance penalties in 2020 i.e. 12. (Finbold)
- Florida has the highest number of money launderers with 71 offenders identified in 2019. (US Sentencing Commission)
- Mexican drug cartels launder 5% of the country’s GDP every year. (UNODC)
Goldman Sachs Bank ranked number 1 for violating anti-money laundering laws last year. Fines on US banks totalled for €9.39 billion out of which €3.03 billion was paid by Goldman Sachs alone.
It Narrows Down to…
Despite the rigid AML regulations being enforced in all corners of the world, money laundering and terror financing continue to be a problem. The global FinCrime numbers are soaring sky high but controlling these activities is possible if organisations employ AI-backed anti-money laundering (AML) solutions. Shufti Pro’s state of the art anti-money laundering screening solutions verify identities of individuals against 1700+ watchlists including sanctions and PEPs. in less than 30 seconds, businesses can onboard legitimate customers.
Want to know more about Shufti Pro’s AML solution? Get in touch with the experts.