BOX 6.3 (continued) outlet it wishes to use and in a format that corresponds to the violation committed and the sanction imposed. The costs of such notices are borne by the entity sanctioned. However, the committee’s decision may be published without specifying names in certain exceptional cases where there could be a “risk of seriously disrupting financial markets or of causing a disproportionate prejudice to the parties involved.”
Sanctions to Be Applied to Directors and Senior Management Where there has been a failure to comply with AML/CFT requirements, sanctions may be applied not only to the financial institution but also to its directors, senior management, controlling owners, and other employees of regulated entities. Where directors and senior management facilitate or are responsible for AML/CFT violations by the institution, whether by commission or omission including negligence, they should be held accountable and subject to appropriate sanctions. Serious and deliberate violations of directors and senior management should be escalated to the law enforcement and prosecution authorities. The scope of application is to directors and senior management only, on the assumption that compliance failures at the lower ranks of the organization are their ultimate responsibility. Nevertheless, since the tipping-off prohibition extends to all employees, there should be sanctions for all employees who breach this obligation. In the United Kingdom, for example, a financial penalty of £25,600 was imposed on the money-laundering reporting officer at Sonali Bank UK who, in successive years, failed to put in place an adequate compliance monitoring system, despite the warnings of internal auditors (Financial Conduct Authority 2016).
EXAMPLES OF ENFORCEMENT MEASURES AND SANCTIONS IN SOME JURISDICTIONS Remedial Measures Enforcement measures are intended to instruct the financial institution to remediate deficiencies expeditiously. Remedial measures aim to strengthen the AML/CFT compliance system of an institution and, more generally, to foster a culture of compliance. Where applicable, remedial measures should include action plans with well-defined timelines and follow-up action by the supervisor to ensure compliance. When applying remedial measures, it is very important that supervisors clearly communicate their expectations and requirements to the financial institution with respect to the deficiencies and required measures. Major issues should always be brought to the attention of the board and senior management, who should be held accountable for implementing the remedial measures required. The example in box 6.4 summarizes an agreement to remedy AML/CFT deficiencies in a bank in the United States. 132
PREVENTING MONEY LAUNDERING AND TERRORIST FINANCING
