Over $352.5 million of fines handed out globally in last four months
encompass corporation, a fast-growing provider of intelligently automated know your customer (KYC) solutions, recently carried out an analysis of anti-money laundering (AML) -related penalties handed down between May 1 and August 31, 2019.
Key observations from the analysis are as follows:
- 20 AML penalties were handed down globally, totaling over $352.5 million
- In the same period in 2018, four fines totaling $707 million were handed out
- $339.3 million of fines were given to banks and $13.1 million to firms in other industries ($50,000 to an individual)
- The largest monetary fine was $336 million, and the average was $18.5 million
- Seven fines given out were $1 million or more
- One business was not given a monetary fine but instead shut down completely
- AML fines were incurred by three gambling and gaming companies in the U.K., with the highest being $7.2 million
- Penalties were handed down by regulators across multiple jurisdictions beyond the U.S. and U.K.; these were Belgium, Latvia, Norway, India and the Netherlands
This takes the total value of AML fines this year, from January 1 to August 31, 2019, to $8.07 billion – approximately 4.3 times the amount handed out over the same period last year ($1.87 billion).
| Country* | May 1 to August 31, 2019 | |
| Total value of penalties | Number of penalties | |
| Belgium | $336,779,000 | 3 |
| U.K. | $10,662,000 | 4 |
| U.S. | $2,506,640 | 4 |
| Latvia | $1,100,000 | 1 |
| Norway | $1,003,532 | 2 |
| India | $455,000 | 5 |
| Netherlands | $0 | 1 |
* Refers to country where the regulator/government agency that issued the penalty is based.
Wayne Johnson, Co-Founder and CEO of encompass corporation, commented:
“As 2019 runs on, we have seen yet another fine in the hundreds of millions, and we expect to see more large penalties over the remainder of the year. As we have noted previously, multimillion-dollar fines are commonplace these days, as evidenced by the fact that seven of the 20 penalties given out from May to August were $1 million or higher.
In the year to date, around two-thirds of AML penalties were given to banks, but approximately one-sixth were imposed on companies in the gambling/gaming and cryptocurrency sectors, highlighting the increasing attention these industries are getting as channels for money laundering. We expect to see this shift to non-financial services businesses going forward.
Large AML fines are often predominantly associated with the U.S. and U.K., since both countries have transparent regulatory cultures and active regulatory bodies, but in the last four months, we have seen activity from regulators in multiple jurisdictions, with the largest fine originating from Belgium. This serves to show the importance being placed on the identification and prevention of money laundering at a global level. Given the current pace, we still think there is a good chance that 2019 could break the record set in 2014 for the highest value of AML fines given out in a year.”
About encompass corporation
encompass intelligently automates information and news discovery for know your customer (KYC) requirements for onboarding, event-driven refresh and remediation.
Driven by a firm’s internal policies and choice of reliable, independent sources, encompass automatically constructs corporate ownership structures, discovers beneficial owners and screens relevant entities and persons for regulatory, reputational and financial risk in minutes.
encompass uses advanced intelligent process automation to dynamically build a comprehensive KYC profile from multiple sources, including corporate registries, company and regulatory data, adverse media and identity verification – enabling fast, confident decisions.
With encompass, firms can:
- Improve the quality of their KYC, getting the full picture of a customer for safer, more informed decisions.
- Reduce the cost of KYC, eradicating valuable hours wasted on repetitive, manual tasks.
- Gain full control of KYC,with full automation ensuring policies and procedures are consistently enforced.
- Improve customer experience,reducing onboarding times from up to four hours to just four minutes.
For more information, please visit www.encompasscorporation.com and follow us on Twitter @encompasscorp
Methodology
The underlying data for this analysis was supplied by Dr. Henry Balani, a financial industry advisor to encompass corporation. All data was compiled from reputable national news sources and cross-referenced against regulator websites where available. Penalties and actions from active jurisdictions where cross-border financial transactions are high were included in the research. While occasionally there are smaller, less active jurisdictions or agencies that impose penalties, these amounts are typically smaller, do not necessarily affect overall trends and were not included in this research.
