Financial Crime World

Here is the converted article in Markdown format:

FINES FOR BREACHES OF ANTI-MONEY LAUNDERING REGULATIONS

The Anti-Money Laundering (Amendment)(No.2) Regulations, 2019 have introduced a new framework for fines imposed by Supervisory Authorities designated for DNFBPs (Designated Non-Financial Businesses and Professions). The regulations aim to ensure that these entities comply with anti-money laundering requirements and prevent financial crimes.

FINE AMOUNTS

The fine amounts vary depending on the severity of the breach:

  • For minor breaches, the fine is $5,000.
  • For serious breaches, the fine is a single amount of $50,000 for individuals or $100,000 for body corporates.
  • Very serious breaches attract a fine of $100,000 for individuals or $250,000 for body corporates.

LIMITATION PERIOD

Supervisory Authorities have a limited time to impose administrative fines:

  • For minor breaches, the limitation period is six months from the date the Authority became aware of the breach.
  • For serious and very serious breaches, the limitation period is two years.

RELATIONSHIP WITH PENALTIES

The regulations allow Supervisory Authorities to choose between imposing an administrative fine or recommending prosecution for a breach. If an administrative fine remains unpaid after 28 days, a prosecution can still be pursued.

PRINCIPLES FOR MAKING FINE DECISIONS

When making decisions about fines, Supervisory Authorities must consider relevant factors, including the criteria under Regulations 55X and 55Y. The principles guiding these decisions are:

  • Disgorgement: to ensure that DNFBPs do not gain from breaching regulations.
  • Disciplinary: to punish intentional, reckless or negligent breaches.
  • Deterrence: to deter DNFBPs from breaching regulations in the first place.

DISCRETIONARY FINE CRITERIA

The discretionary fine criteria apply when issuing breach notices, considering matters under Regulation 55ZD(2) or 55ZO(2)(b), and imposing discretionary fines. The criteria include factors such as:

  • Nature and seriousness of the breach
  • Degree of inadvertence, intent or negligence in committing the breach
  • Duration of a continuing breach
  • Measures taken to prevent the breach

CONCLUSION

The new framework for fines imposed by Supervisory Authorities designated for DNFBPs aims to promote compliance with anti-money laundering regulations and prevent financial crimes. The varying fine amounts and limitation periods provide a deterrent effect, while the principles guiding fine decisions aim to ensure fairness and consistency in their application.