Penalties for noncompliance with AML and know-your-customer requirements fell by 40% in comparison to the same period last year, according to data released on Friday.
The United States, Switzerland, Norway, the United Kingdom and the United Arab Emirates top Fenegro’s list of 31 countries that had issued most of the fines.
The U.S. collected $711,206,765; Switzerland $85,210,112; Norway $48,339,685; the U.K. $32,954,630 and the UAE $12,895,393, according to the report.
Fenergo's Global Director of Financial Crime, Rachel Woolley, said that enforcement proceedings were at all-time high in recent years, as regulators probed and concluded a number of significant scandals.
“This year we’re seeing something markedly different, with the total value of fines issued at the halfway point of the year much lower than last year,” she said.
She added that the full year totals may however reach their typical levels with conclusions due across several significant AML cases.
“It’s important to note too that while the volume and the value of enforcement actions may be down on previous years, that doesn’t mean there is less financial crime occurring,” Woolley said.
She warned that the extent of fraud that occurred during the COVID-19 pandemic, particularly in the U.S., may spur investigations against financial institutions for enabling the crimes through weak systems and controls.
“This will lead to enforcement actions further down the line,” she said, adding that financial crime today is “ever-evolving,” therefore requiring modern tools and technologies to better detect and prevent such crime.
“This will also equip firms with the capabilities to identify potential risks posed by politically exposed persons and known close associates amid growing geopolitical turmoil,” Woolley said. The goal, she said, is to create an environment where illicit activity is not commercially viable.
