Banks sanctioned for violating AML regulations

In the year 2022, over $5 billion worth of fines were imposed on international banks and financial institutions for anti-money laundering violations and other financial crimes, totalling $56 billion since 2008.

In terms of the imposition of sanctions, the United States took the lead with $37.2 billion in fines, followed by Europe, the Middle East and Africa with $11 billion and Asia-Pacific with just over $5.1 billion.

In Italy, total fines reached $120 million, a figure that France surpassed with $7.5 billion as did the Netherlands with almost $1.5 billion.

Turning to the banks, record fines since 2008 were paid by Bnp Paribas ($8.9 billion), Goldman Sachs ($6.8 billion) and Hsbc ($2.4 billion).

Against this bankground, fines against cryptocurrency companies and their employees also soared in 2022 (+92% compared to 2021) to $193 million. The largest fines were issued by the US Commodity Futures Trading Commission to the three co-founders of BitMex, totalling USD 30 million.

Moreover, the first ESG-related fines were also eventually issued last year.  

The Securities and Exchange Commission (SEC), the US federal agency that oversees the stock exchange, fined a Goldman Sachs bank division $4m for failing to comply with ESG policies. The SEC exposed several failures by said bank in its policies and procedures for selecting investments in line with ESG factors, from 2017 to 2020.

While sustainable investment principles have become increasingly mainstream nowadays, due to increased public and investor awareness of climate and environmental issues, ESG is still not sufficiently regulated, neither in the US nor in Europe.

For this reason, US regulators are tightening their controls on so-called ‘sustainable investment vehicles’, which are often unclear given that fact that ESG parameters are not always met by the companies they invest in. ESG regulation is a high priority for the SEC, which has accordingly proposed regulatory changes to oblige companies to disclose more information to investors about the risks that climate change and government policies to curb emissions pose to their businesses. The SEC has also set up a task force specifically dedicated to ESG, to investigate whether companies and investment firms are misleading clients with false assessments of the ‘sustainability credentials’ of businesses or funds.