Enforcement actions against financial institutions and their employees totaled $ 5.4 billion for violations of anti-money laundering (AML) and data privacy regulations, up from $ 10.6 billion in 2020, Fenergo find. The number of fines imposed on financial institutions for non-compliance (176 in 2021) was less than a quarter of the previous year’s total (760).
The average value of fines for AML-related compliance violations in 2021 was $ 34.4 million, Fenergo said. Fines for data privacy fell 82% to $ 17.4 million, the majority of which ($ 11.5 million) related to General Data Protection Regulation (GDPR) violations in Europe.
Europe, the Middle East and Africa (EMEA) saw the largest regional increase in the value of financial sanctions, from $ 1 billion in 2020 to $ 3.4 billion in 2021. A fine of 1.8 billion euros (US $ 2 billion) against Swiss bank UBS for helping high net worth clients avoid tax in France takes the lion’s share; the penalty was reduced in december from 4.5 billion euros.
The past year has also seen an increase in the number of nonbank financial companies targeted by regulators, Fenergo noted. In August, five companies operating the crypto trading platform BitMEX were ordered to pay $ 100 million by US regulators for violating AML rules.
As for employees of financial institutions, 16 people were collectively fined $ 16.5 million in 2021 for their role in AML-related compliance violations. Six Iranian Future Bank employees were each fined 1 million Bahraini dinars (US $ 2.7 million) in a July decision of the Bahrain High Criminal Court.
Rachel Woolley, global director of financial crime at Fenergo, said in a press release that the decrease in fines last year is “largely attributed to a reduction in the number of multi-billion dollar fines compared to previous years “. She added that the pandemic has also had an impact on regulatory investigations, as regulators have not been able to initiate as many probes on the spot.