This year has been comparatively subdued after some hefty fines were handed out in 2021. However, there's still cause for concern with millions in AML fines issued.
Key AML fines in 2022
- 888 UK Limited - £9.4m fine
- Javanshir Feyziyev - £5.6m fine
- Robeco - €2m fine
- Southern Cross SICAV plc - €300k fine
- XNT Ltd - €245k fine
The causes of these penalties range from a lack of due diligence to criminal conduct. In each case, the offenders fail to show regulators that they took reasonable steps to prevent money laundering, which results in a financial penalty.
Key AML fines of 2022 in detail
1. 888 UK Limited - £9.4m fine
An online gambling business that operates 78 websites, 888 UK Limited, has been ordered to pay a £9.4 million fine issued by the UK Gambling Commission.
The company's failings include failure to identify players at risk of harm, failure to implement the Gambling Commission's formal guidance on customer interaction and allowing customers to gamble with large amounts of money without carrying adequate due diligence and Source of Funds checks.
"[The] fine is one of our largest to date, and all should be clear that if there is a repeat of the failures at 888, then we have to seriously consider the suitability of the operators to uphold the licensing objectives and keep gambling safe and crime-free."
2. Javanshir Feyziyev - £5.6m fine
A multimillionaire Azerbaijani politician and his family have to turn over millions in suspicious funds brought into the UK through a complex money-laundering scheme known as the "Azerbaijani laundromat."
After ruling that the funds "arise from criminal conduct" and "money laundering," a judge ordered Javanshir Feyziyev and his relatives to forfeit £5.63 million held in various bank accounts.
In 2017, this grand scheme was exposed after the Danish newspaper Berlingske, and numerous other media partners received leaked secret bank records. The data showed that the Azerbaijani leadership had made over 16,000 private transactions between 2012 and 2014. These transactions were worth approximately $3m a day.
"This is a substantial forfeiture of money laundered through the Azerbaijan laundromat, and our success highlights the risk to anyone who uses these schemes. We could recover these millions without proving the exact nature of the original criminal activity. We will continue to use civil powers to target money entering the UK via illegitimate means."
3. Robeco - €2m fine
AFM, the financial regulator in the Netherlands, has issued a €2m fine to Robeco for failing to check its clients for money laundering sufficiently.
It is a requirement for Dutch financial institutions to report suspected transactions to the Financial Intelligence Unit (FIU). However, Robeco along with its subsidiaries reported only a few such transactions when compared with other firms.
Only two out of Robeco's over 250,000 clients, only two clients had received the risk classification "provisionally unacceptable". These clients had opened their accounts in 1986 and 1994.
This raised suspicion with regulator AFM. Upon investigation, they found significant shortcomings in the company's client checks and transactions.
4. Southern Cross SICAV plc - €300k fine
The investment company, Southern Cross SICAV plc, has been handed a hefty fine by the Financial Intelligence Analysis Unit (FIAU). This penalty was issued for numerous anti-money laundering failures that resulted in millions invested without robust controls.
South Cross SICAV plc's shortcomings include four breaches of the Prevention of Money Laundering and Funding of Terrorism Regulations. In addition, the investigation found that the company failed to have adequate measures in place to obtain the source of wealth (SoW) and the expected source of customer funds.
Another finding was that on three occasions, the company decided to invest its own funds in its customers' business. These investments took the form of payments of about €1 million to each of the investors and issuing units in fund.
"In view of this, there was no clear rationale as to why the company was investing in the business of its customers and whether this was in line with the prospectus and the customary business of the company,”
5. XNT Ltd - €245k fine
XNT Ltd, a financial services company, has been fined an administrative penalty of €244,679 by the FIAU. The penalty was issued for several reasons - the first of which relates to customer due diligence.
Upon investigation, the regulator found that the company failed to fulfil its obligations to assess and obtain information for the business relationship. Furthermore, XNT Ltd had some issues with their policies and procedures as they did not meet the requirements to screen customers.
In addition to these issues, the company's transactions did not include supporting documentation, and there were concerns highlighted with the company's MLRO as they displayed a lack of understanding of the company's policies and controls.
Want to learn more about Financial Crime?
To help you plan and execute compliance in your organisation, we have created a comprehensive anti-money laundry and counter-terrorist financing roadmap.
We also have 80+ free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, posters, training presentations and even e-learning modules!
If you'd like to stay up to date with financial crime best practices, industry insights and key trends across regulatory compliance, digital learning, EdTech and RegTech news, subscribe to the Skillcast Compliance Bulletin.
Last but not least, you can interact in person with thought leaders and your peers at one of our popular live webinars and face-to-face events.
If you've any questions or concerns about compliance or e-learning, please get in touch.
We're happy to help!