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In 2011, Banks Fretted Over Sanctions, Tax Investigations and Political Changes
By Brian Monroe and Colby Adams
printTax 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. Perhaps the biggest surprise of the year for compliance officials was the degree to which political changes informed their daily work. With uprisings or governmental collapse in Tunisia, Egypt, Libya, Yemen, Syria, Bahrain and other Arab countries, 2011 saw the greatest political change since 1989, when the Eastern Bloc of the former Soviet Union fell and China beat back political dissent. For bank officials, the changes meant rethinking risk rankings for the...
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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.
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.
For many anti-money laundering and sanctions professionals, 2012 will be remembered as a year of record fines. Banks paid billions to settle AML and sanctions compliance violations, with one penalty alone reaching almost $2 billion.
The number of federal anti-money laundering enforcement actions issued in the first half of 2012 fell by 35 percent in comparison to the total levied during the same period last year, data shows.
The total number of anti-money laundering enforcement fines handed down by federal regulators rose by 67 percent in 2011 compared to the previous year.
As the United States continues its crackdown on foreign banks that aid American tax evaders, the role compliance officers can play in reporting the crime remains unclear, say bankers.
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.
The number of anti-money laundering enforcement actions handed down by federal banking regulators rose nearly 48 percent in the first six months of 2011 compared to the same period last year, data shows.
The 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.
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.
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.