KYC/AML and Sanctions fines reach $5.6 billion mid-year for global financial institutions

  • Richard Marley
  • August 25, 2020
  • 2 minutes read
  • 334

The leading provider of digital transformation and client lifecycle management (CLM) solution, Fenergo, released its mid-year report on global financial institution fines. The findings highlight the fines by the end of July 2020. As per Fenergo’s report, the penalties for non-compliance with KYC, AML, and sanction regulations have totalled USD 5.6 billion.

The APAC regulators, including Hong Kong, China, Malaysia, Singapore, Taiwan, Pakistan and India, issued fines of U.S $4 billion in total, increasing from $3.5 billion. The countries with the highest fines include Pakistan with a rise of 845%, Hong Kong +223% and Taiwan +116% as compared to 2019 mid-year. 

The rise in fines is a result of increased scrutiny of  Financial Action Taskforce (FATF). In fact, Pakistan, with the highest percentage increase, is under intense scrutiny by FATF for insufficient AML/CFT strategies.

The highest value enforcement actions in 2020 are exhibited by Malaysian regulators so far.  They secured a settlement with one of the major US banks. The bank was penalised due to involvement in the 1Malaysia Development Berhad (1MDB) scandal, and the theft of billions of dollars from the Malaysian government fund. The remuneration included $2.5 billion fine apart from a guaranteed return of $1.4 billion assets. 

In addition, a fine of $336 million was issued to three Swedish banks due to lack of AML compliance and controls in Baltic states. US authorities imposed fines of over $900 million against Israeli bank for money laundering and tax evasion. Also, NYDFS levied a fine of $150 million dollars on a well-known German bank for its relationship with Jeffry Epstein.