Protect Your Business from Money Laundering Activities

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How to Protect Your Business from Money Laundering Activities

Today, having anti-money laundering processes in place is more than a matter of smart business. In most jurisdictions, it is also a legal necessity.

Organizations large and small are at risk of falling prey to unscrupulous business dealings and other threats posed by seemingly legitimate business partners. Governments and regulatory agencies are now placing the responsibility of avoiding these pitfalls on the owners and directors of the organizations themselves.

Take Citibank, for example. The banking giant has been fined $70 million in the U.S. “for failing to address shortcomings in its anti-money laundering policies.” According to an article by Reuters, titled "Citibank fined $70 million for anti-money laundering compliance shortcomings" (2018):

The Office of the Comptroller of the Currency fined the bank in late December and announced it on Thursday. The regulator assessed the civil penalty because the bank had failed to address concerns it had first flagged in 2012.

The case is notable because it isn’t linked to a specific new allegation of money laundering per se. It is the alleged lack of compliance and efforts to enhance prevention policies that placed Citibank in hot water (you can read additional commentary on this case in Bloomberg opinion piece).

Citibank isn’t alone. Western Union just settled a case for nearly as much ($60 million) for allegedly failing to deter and report transactions related to money laundering. Rather than the federal government, this settlement is with the New York Dept. of Financial Services. According to an article by Reuters, titled “Western Union settles New York money laundering probe for $60 million” (2018):

DFS alleged that from 2004 to 2012, Western Union failed to implement and maintain an effective anti-money laundering program aimed to deter criminals’ use of its electronic network to facilitate fraud and money laundering.

The regulator said senior Western Union executives and managers also ignored suspicious transactions to Chinese Western Union locations by several high-volume agents, including money transfers linked to human trafficking.

DFS Superintendent Maria Vullo said in a statement Western Union’s executive “put profits ahead of the company’s responsibilities to detect and prevent money laundering and fraud.”

CRI Group can help

The best way to prevent and detect money laundering is to have a robust set of anti-money laundering (AML) processes in place. CRI Group’s Investigative Due Diligence services provide clients with specialised intelligence needed to guarantee complete compliance with anti-money laundering regulations and AML legislation involving trans-national implications.

The impact of not remaining in compliance can be severe, and might include the following:

  • Damaged corporate reputation and brand devaluation
  • Eroded employee moral
  • Potential consumer boycotts
  • Negative investor perceptions
  • Possible legal action
  • Fines and potential jail terms for directors

Anti-money laundering laws and regulations are constantly being strengthened as governments come under pressure to protect their economy and taxpayers from the damage cause by this widespread crime. Today, organizations must be diligent in protecting themselves, their investments, their reputations – and they must be fully compliant within the law. Contact CRI Group and be better protected against the risks of money laundering today.