Anti-money laundering (AML) failures have made headlines this year, with some international banks falling short of AML laws. Penalties have been well over the £1m mark indicating the severity of these failings.
Key AML fines in 2023
- Crown Resorts - $450m fine
- Bank of Queensland - $50m capital penalty
- William Hill - £19.2m fine
- Guaranty Trust Bank UK Ltd - £7.6m fine
- In Touch Games - £6.1m fine
- Al Rayan Bank - £4m fine
The causes of these penalties centre around a lack of due diligence and failure to conduct adequate risk assessments. 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 2023 in detail
1. Crown Resorts - $450m fine
Crown Resorts has been fined $450m by the Australian Transaction Reports and Analysis Centre (AUSTRAC) for historical breaches of Australian AML laws at its Melbourn and Perth casinos. The financial intelligence agency admitted a failure to assess the money laundering and terrorist financing risks that its casinos faced.
The fine amount has been agreed upon by AUSTRAC, and Crown Resorts; however, it requires final approval from the Federal Court. Once approved, this will be the third-largest fine in Australian corporate history. The company's CEO, Ciarán Carruthers, Crown Resorts, is committed to rectifying its past failings.
2. Bank of Queensland - $50m capital penalty
The Bank of Queensland (BOQ) has been issued a capital penalty of $50m. Regulators revealed that BOQ had breached prudential standards and failed to comply with anti-money laundering laws.
Based on other banks that have been caught in regulatory breaches, the costs for the BOQ could escalate as it is forced to improve its systems.
In a separate undertaking that BOQ has entered into with financial regulators AUSTRAC and the Australian Prudential Regulation Authority (APRA), the bank needs to hold $50m extra until it has addressed the regulator's concerns by implementing a remedial action plan.
3. William Hill - £19.2m fine
William Hill and its sister brand Mr Green have been fined a record £19.2m fine for social responsibility and anti-money laundering failures.
Extreme examples of failings included allowing a customer to open an account and spend £23,000 in 20 minutes without any checks. Other customers were allowed to spend £18,000 over 24 hours and £32,500 over two days, respectively, again without any income evidence and AML checks.
Customers were allowed to deposit high sums of money - which they subsequently lost - without appropriate anti-money laundering checks.
Many of the extreme examples occurred during lockdown, despite companies being warned by the Gambling Commission not to exploit vulnerable people during this time.
“When we launched this investigation, the failings we uncovered were so widespread and alarming serious consideration was given to licence suspension. However, because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history.”
4. Guaranty Trust Bank UK Ltd - £7.6m fine
Guaranty Trust Bank UK Ltd was fined £7.6 million for serious weaknesses in its AML systems and controls. Among other things, it failed to conduct adequate customer risk assessments and due diligence on high-risk customers or establish the source of funds and wealth.
Since it was not a first-time offence for the bank, the fine was substantially increased. However, the bank has not disputed the FCA's findings and agreed to settle, which has allowed them to qualify for a 30% discount.
5. In Touch Games - £6.1m fine
The UK Gambling Commission (UKGC) has fined an online gaming operator £6.1m for social responsibility and money laundering failings.
In Touch Games – which operates 11 online gaming platforms in the UK – failed to interact with a customer for seven weeks, although erratic play patterns and extended play periods were flagged. It also accepted a customer's claim that they earned £6,000 a month without seeking evidence, even when red flags were raised.
It's the third time the operator has faced action. It paid a £2.2m settlement in 2019 and was fined £3.4m in 2021. The Gambling Commission had warned of escalating fines for repeat offenders.
"Considering this operator’s history of failings, we expected to see significant improvement when we carried out our planned compliance assessment. Disappointingly, although many improvements had been made, there was still more to do. This £6.1m fine shows that we will take escalating enforcement action where failures are repeated, and all licensees should be acutely aware of this."
6. Al Rayan Bank - £4m fine
The UK's biggest Islamic bank was fined £4m by the FCA for failing to conduct adequate checks on high-risk customers' wealth. Al Rayan Bank didn't keep due diligence records up-to-date or have proper processes for handling large cash deposits. There was also a lack of AML training.
Despite being warned of shortcomings by its Second Line of Defence, problems hadn't been addressed.
“Maintaining strong defences against the evolving threats of financial crime is an essential part of our business plan and is being led by the new board and executive team.”
Are there trends in AML fines imposed in 2023?
There are no definitive trends in AML fines imposed in 2023. However, the war in Ukraine sparked numerous sanctions, which has put financial crime in the spotlight for businesses with a growing need to comply with regulations.
The trend of repeat offending by big firms is apparent in the USA and the UK, which can see a rise in penalty amounts issued. Post fines, companies generally invest more in compliance, but this is found to be quite poorly monitored and enforced, which could continue this trend.
Which countries have the most AML fines in 2023?
The top 5 countries with the most AML fines in 2023 are:
- United States
- United Kingdom
- Hong Kong
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