In March, the UK private bank Coutts & Co was hit with a £8.75m ($14.16m) fine for taking "an unacceptable risk of handling the proceeds of crime"; the highest ever penalty from the UK regulator for anti-money laundering (AML) breaches. The following month, the Office of the Comptroller of the Currency (OCC), the US Federal regulator, imposed a robust and prescriptive enforcement action on Citibank over AML weaknesses. Both actions are indicative of a global crackdown on money laundering and demonstrate an increasing emphasis throughout the international financial community on firms’ own responsibilities to mitigate this type of risk.
The Arab Spring of 2011 provided a reminder that dictators can be among the world’s wealthiest people and brought the very real risk of money laundering back to the attention of the international wealth management community. Increasing globalisation and instability in world order have created a situation in which jurisdictions with weak controls risk exposing themselves and the wider financial services community to money laundering. Whether or not there has been a real, or just perceived, increase in the volume of financial crime as a result of this, regulators around the world have certainly stepped up their game to drive improvements in regulated firms.
