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More Compliance Costs, Criminal Prosecutions Likely in 2011, Say Industry Leaders
printThe new year won't be any easier on compliance officials at banks and money services businesses, and could get much harder depending on how U.S. officials implement new and proposed regulations, according to industry leaders. That's because the U.S. Treasury Department has yet to set out final plans of how it will monitor cross-border wire transfers and regulate prepaid access products. Department proposals have elicited concerns from financial institutions that could be addressed by the Financial Crimes Enforcement Network (FinCEN) within the year. And prosecutions for financial crime, deferred or consummated, will continue to be a big focus for law...
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With plenty of convincing reasons, representatives of the law enforcement and compliance industry say the coming year is fraught with serious challenges.
Relative to the year before, the anti-money laundering (AML) compliance industry drew few headlines over the past 12 months, and yet no one would tell you their job got any easier.
Fines and monetary settlements paid in 2012 by banks for anti-money laundering and counterterrorism financing violations increased 131-fold from the previous year, ACAMS moneylaundering.com data shows.
A growing number of compliance professionals expect that someone at a bank, even a compliance officer, will be prosecuted for violating the Bank Secrecy Act in the not-too-distant future.
Though none can predict the future, one thing in the AML world seems certain: the jobs of compliance officers won't get any easier in 2013.
Whether the economy improves or stays flat in 2012, the coming year will pose a number of new challenges for the compliance professionals charged with implementing sanctions and anti-money laundering controls, say industry leaders.
Tax investigations, political turmoil and economic sanctions were among the biggest challenges faced by the compliance departments of financial institutions in 2011, say bank officials and industry experts.
The number of annual federal banking fines for anti-money laundering violations rose by nearly fourfold in 2010, while the total dollar amount of the monetary penalties rose to over $660 million, according to Moneylaundering.com/ComplianceAdvantage data.
Regulatory pressure grew on financial institutions in 2010 though few compliance departments saw an increase in budgets or resources in the wake of an 18-month recession, say industry professionals.
The total regulatory fines issued by the United States against financial institutions for anti-money laundering compliance problems fell by 90 percent in 2009 from the total levied in 2008, according to ComplianceAdvantage.com data.
We never said compliance professionals had it easy, and 2010 doesn't look to be a year when things will be any better for the anti-money laundering and counterterrorism financing industry.
Bank closings and enforcement actions for capital requirement and credit risk violations didn't preclude law enforcement and regulatory officials from pursuing banks for violating U.S. and international sanctions in 2009 or from leaning on financial institutions to catch tax cheats.
New Year's Eve may have come and gone and all of the post-celebration headaches faded, but financial institutions are going to need many more months to recover from 2008.
Twenty-five banks failed in 2008, including Seattle-based Washington Mutual, the largest bank to fail in U.S. history. With less resources and with regulators focused on credit markets and capital requirements, compliance officers faced a whole new set of regulatory challenges.
Regulators spent less face time addressing AML concerns as the lion's share of regulatory attention was devoted to subprime lending standards and the broader credit crisis. But, when financial regulators and the Justice Department weighed in, they did so heavily, assessing record penalties.
Now that the confetti has settled and the kazoos have been packed away for next year's parties, anti-money laundering compliance officers consider what lies ahead in 2008.