2018/2019 Anti-Money Laundering Review and Outlook

5 February 2019
View Debevoise In Depth
Key takeaways:
  • In the second half of 2018, financial regulators around the world imposed more than $1.2 billion in fines related to anti-money laundering (“AML”) compliance failures, which combined with more than $1.7 billion in fines imposed in the first half of the year1 surpassed 2017’s annual total of $2 billion.
  • To assist financial institutions in understanding the evolving AML priorities of law enforcement and financial regulators, the Debevoise Banking Team has compiled the 2018 Anti-Money Laundering Review and Outlook, summarizing 22 AML enforcement actions initiated or concluded in the second half of 2018. Four key AML enforcement trends emerge:
    • Personal Liability: Regulators continue to emphasize the role of individual compliance officers, senior executives and board members, and have increased attempts to hold them personally liable for compliance failures.
    • Focus on Fundamentals: As in the past, all U.S. enforcement actions cite to the five pillars of an effective AML program, the reported actions have placed a particular focus on failures of due diligence, risk assessment and suspicious activity reporting. For example, regulators have indicated that reviews of employee misconduct should lead to consistent practices for AML review of suspicious activity report filing obligations.
    • Increased SEC Enforcement: There has been an increase in enforcement by the U.S. Securities and Exchange Commission but with modest fines so far against brokerdealers in standalone AML enforcement actions.
    • A Global Rise in AML Enforcement: While AML enforcement has long been a focus for U.S. regulators, increasingly we are seeing AML garner the attention of regulators in other jurisdictions, such as China, India and across Europe, with meaningful fines in one new resolution.
  • We also provide an overview of proposed changes to U.S. AML regulations currently pending before Congress and an overview of two key pieces of AML-related guidance issued by banking regulators this year.