2021 has been an active year in the prevention of money laundering, with many countries newly enacting or updating their AML-related regulations. In 2021, countries took regulatory steps, especially on crypto, and awareness of this issue increased.
Sanction Scanner has produced a report highlighting the AML industry’s biggest compliance challenges, regulatory focus, and crime trends in 2021.
Top 5 AML Penalties in 2021
AML Challenges and Trends in 2021
AML Regulatory Changes in 2021
FATF 2021 Trend Reports
Pandora Paper Report
This year, as in previous years, many institutions received AML fines. In general, the main reasons regulators penalize banks are:
• Inadequate compliance culture, values, and norms
• No reporting of suspicious activities (SARs),
• Inadequate risk assessment of KYC, PEP, and CDD
• AML, not checking for security vulnerabilities
One of the largest AML fines this year was awarded to ABN Amro bank, amounting to $574,000,000. Subsequently, Julius Baer Bank ($79,000,000), DNB ASA ($48,000,000), Rietumu Bank ($6,900,000), Swedbank AB ($5.5 million) were subject to high fines.
In 2021, AML regulations have increased considerably in the Crypto space. There have been some countries that support crypto-related AML regulations, for example; The South includes Ukraine, Cuba, England, UAE, France, Switzerland, Germany, Netherlands, Thailand, Japan, and Australia.
Previously, to prevent the misuse of Cryptocurrencies for money laundering and terrorist financing, the Financial Action Task Force had implemented the Travel Rule in June 2019, but by June 2021, 58 of the 128 reporting jurisdictions had been renewed.
Also this year, regulators are pushing banks to use better software and incorporate emerging technologies. As financial fraudsters get smarter with their approach, the only way banks can fight is with technology that fits these capabilities and can adapt to new threats. The advantage of better software is that most compliance processes can be automated, which helps keep costs down.
There have been some trending posts that FATF has been working on this year. For example, the FATF and the Egmont Group have published a report on trade-based money laundering trends and developments called “Trade-Based Money Laundering: Risk Indicators.” The report provided detailed information on the risks that emerged. It also outlined a set of best practices to help authorities mitigate this money laundering threat.
Another example In October 2021, the FATF updated its 2019 Guidelines for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers (VASPs). This updated Guidance forms part of FATF’s ongoing monitoring of the virtual assets and VASP industry.
In addition, the FATF Money Laundering From Environmental Crime report describes the methods criminals use to launder the proceeds of environmental crimes, as well as the tools governments and the private sector can implement to curb this activity.
You can find the full report here.