A Word from the WSJ about the importance of AML Audits

By November 28, 2017AML

Today, it is not uncommon to see the Justice Department and regulators assess multi-million dollar criminal or civil fines against banks and other financial institutions that bring large amounts of foreign money into the U.S. In December of 2012, one bank agreed to pay a fine of $1.9 billion to settle a case involving alleged money laundering. The settlement is the largest amount ever to be paid by a bank related to AML program failures. In addition, for the first half of 2013, several multi-million-dollar fines have been imposed against household name banks for AML compliance program lapses, which makes such settlements now appear commonplace.

Today, it is not uncommon to see the Justice Department and regulators assess multi-million dollar criminal or civil fines against banks and other financial institutions that bring large amounts of foreign money into the U.S. In December of 2012, one bank agreed to pay a fine of $1.9 billion to settle a case involving alleged money laundering. The settlement is the largest amount ever to be paid by a bank related to AML program failures. In addition, for the first half of 2013, several multi-million-dollar fines have been imposed against household name banks for AML compliance program lapses, which makes such settlements now appear commonplace.

The regulatory focus on AML compliance program weaknesses, along with the unprecedented record fines recently imposed on financial institutions, should compel chief risk officers (CROs), chief compliance officers (CCOs) and other executives responsible for risk management to renew their sense of urgency regarding AML compliance and ensure their programs meet today’s standards.

In addition to the staggering monetary fines, companies could end up paying for non-compliance in more ways than via the wallet: U.S. AML laws permit regulators to limit a company’s mergers and acquisitions or joint venture activities until the company is in compliance with AML laws, a vital consideration at a time when many companies are making mergers and acquisitions a prime feature of their growth strategy. For example, less than a year ago the Federal Reserve halted one of the largest announced bank mergers because of AML concerns at one of the banks.

Regulators are also empowered to take supervisory actions to reduce future compliance risk, impressing boards and management to undertake certain remedial activities to ensure future compliance.

As the frequency and magnitude of criminal penalties and fines for non-compliance and violations increase, CROs and CCOs can help their companies get ahead of the curve by taking steps to establish strong, enterprise-wide AML law regulatory compliance processes and beefing up those compliance systems already in place.”

Compliance and AML Audits are important concerns for very large multi-national corporations as well as local broker dealers.  All firms that that meet the criteria must have a plan in place.  At Cobia we can help your firm regardless of firm’s size.  We have the experience and expertise to help you.  Give us a call today to learn more how we can partner with your firm.

Source: WSJ

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