Increasing Money Laundering Fines for Banks After Lockdown

Despite the delays in enforcement activities due to lockdown, the globally issued money laundering fines to banks are increasing and are expected to reach the 2019 levels. Analysts are also predicting growth in pandemic-related penalties by the end of the year. 

According to Philip Annett, regulatory authorities like the Justice Department and the Financial Conduct Authority in the UK, and the Securities and Exchange Commission in the United States will probably announce investigations for misconduct during the lockdown. 

Global financial authorities issued a $5.6 billion worth fine to banks for not complying with the AML, KYC, and sanctions regulations. This was 30 per cent less than the previous year as indicated in research. 

The United Kingdom is among such states where authorities issued two fines for AML or sanctions breach until July 2020, and the fines valued $72.9 million. One of these fines was from the Financial Sanctions Implementation office for Standard Chartered in April. The other one was for Commerzbank AG from the FCA in June. However, the country issued five fines in 2019 that valued $224.8 million. 

Beyond 2020, banks can expect investigations and financial fines as well for misconduct during the COVID-19 pandemic. Frauds related to medical supplies, masks, and other pandemic-driven contracts will be the major focus of regulators, according to law experts. Approval of fraud application for government agency funds that have questioned the efficacy of control systems in banks.

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