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Discretionary Fine Criteria Under Anti-Money Laundering Regulations

The Anti-Money Laundering (Amendment)(No.2) Regulations, 2019 provides clear guidelines for exercising fine discretions under regulation 55W. In this article, we will delve into the criteria used to determine whether a discretionary fine should be imposed.

Criteria for Exercising Fine Discretions

According to Regulation 55X(1), the following factors are considered when deciding to exercise fine discretion:

Key Factors

• Nature and seriousness of the breach: The severity and impact of the breach on the individual or organization.
• Degree of inadvertence, intent or negligence: The level of intention, carelessness, or mistake made by the party in committing the breach.
• Duration of the breach (if continuing): The length of time over which the breach persisted.

Preventative Measures

• Measures taken to prevent the breach: Any steps the party took to avoid the breach.
• Reasonable measures that should have been taken: What a prudent person in similar circumstances would have done to prevent the breach.

Special Circumstances

• Reasonable reliance on information supplied by another person: Whether the party relied on accurate and trustworthy information from others, which led to the breach.
• Honest mistake: Whether the breach was an unintentional error made in good faith.

These criteria are used in various situations, including:

• Issuing breach notices
• Considering or reconsidering matters under regulation 55ZD(2) or 55ZO(2)(b)
• Imposing discretionary fines