Anti-Money Laundering Scrutiny
Intensifies on Both Sides of
By Olga Greenberg, Emma Gordon,
Greg Amoroso and Phil Taylor
US and UK regulators continue to focus on enforcement
actions against institutions and individuals for violations
of anti-money laundering (AML) laws and regulations, and
the trend is intensifying. A review of recent US and UK
enforcement cases reveals common themes financial
institutions might consider when establishing or assessing
the effectiveness of AML programs. Specifically, regulators
continue to direct their attention to internal controls, the
identification and timely reporting of potential suspicious
activity, and conduct that may give rise to the individual
liability of employees.
Over the past 15 months, US regulators1 have brought more
than 40 enforcement cases and imposed penalties totaling
more than $1 billion,
2 primarily against financial institutions
1 The United States Department of Treasury’s Financial Crimes Enforcement Network has primary responsibility
for the enforcement of and compliance with the Bank Secrecy Act and anti-money laundering rules and
regulations. Other federal agencies, including the Securities and Exchange Commission and the Financial
Industry Regulatory Authority, as well as state regulators also investigate potential anti-money laundering
violations pursuant to express or delegated authority and may bring enforcement actions against financial
institutions and individuals subject to their jurisdiction.
2 This amount includes the forfeiture of funds in excess of $500 million.
such as banks, credit unions, broker-dealers, and money
services businesses. Many cases involved missing or
ineffective AML programs, which led to other deficiencies,
such as failure to file Suspicious Activity Reports (SARs) and
Currency Transaction Reports. Likewise, in recent years, UK
regulators3 have fined nine banks for AML breaches. The
majority of the cases involve a bank breaching Principle 3 of
the Financial Conduct Authority’s Principles for Businesses,
i.e., failing to “take reasonable care to organize and control
its affairs responsibly and effectively, with adequate risk
4 The most recent penalty, issued on
January 31, 2017, amounted to more than £160 million ($195
million) and was the largest fine ever imposed by that UK
authority for AML breaches.
3 The UK’s Financial Conduct Authority monitors compliance with the Financial Services and Markets Act
2000 (FSMA) and Money Laundering Regulations 2007 by institutions which carry on regulated activities
as defined in FSMA Order 2001. The Financial Conduct Authority’s annual business plans, for several years,
have highlighted financial crime as a priority, and the 2016-2017 plan is no exception. Her Majesty’s Revenue
and Customs also has powers to monitor money laundering compliance by so-called money services
businesses and to prosecute where necessary.
4 Financial Conduct Authority, Handbook at PRIN 2. 1. 1 (2014), http://www.handbook.fca.org.uk/handbook
[hereinafter FCA Handbook].