A total of $36 billion in fines were meted out to firms that failed to comply with anti-money laundering and know-your-client regulations and/or breached sanctions since the global financial crisis of a decade ago. This was a surge of 150 per cent when compared with a report covering the same areas issued 15 months ago, technology firm received the largest single fine by the French Criminal Court of $5.1 billion for AML breaches. The fine exceeds the Zurich-listed bank’s 2018 net profit of $4.9 billion. 

Italian banks were the second biggest offenders in 2019, racking up almost $1.5 billion in total fines for sanctions violations and breaches of European Union data protection rules, aka GDPR.

“The rise in financial crime and increasing regulation is creating a tough battleground for financial institutions trying to stay on top of a multitude of regulatory rules across different jurisdictions. We are still seeing the ramifications from the financial crisis,” Marc Murphy, CEO of Fenergo, said. 

Besides GDPR rules, which came into force in May 2018, the European Union introduced MiFID II rules governing investment data disclosure and other issues – rules that affect even non-EU firms and parties dealing with the European bloc. The Fenergo report said that MiFID and GDPR fines reached $82.7 million in 2019. The 2019 fine value is 55 times the value of all MiFID II fines issued in 2018 ($1,480,942).

The Fenergo report said that two-thirds of all fines issued by US regulators were aimed at European financial institutions for AML breaches and sanctions violations with countries such as Iran, Cuba, North Korea, Sudan, Libya and Myanmar. 

In Asia-Pacific (0.07 per cent of the 2019 fine value) the majority of penalties were levied by regulators for AML and KYC shortcomings in India (14), Chinese Taipei (10) and Pakistan (8). 

The top US regulator by the cost of fines was the Department of Justice with over $1.3 billion in fines issued. This includes an enforcement action imposed on one of the world’s top 20 banks which incorporated a forfeiture of $717.2 million for the absence of an effective, global sanctions-compliance infrastructure and a lack of management oversight which resulted in sanctions violations.