BOX 6.6 Examples of Criminal Sanctions across Jurisdictions United States. Prosecutors have powers to investigate and sanction financial institutions that do not comply with US anti-money-laundering (AML) law. The Department of Justice has authority to bring criminal actions against financial institutions that breach their statutory and regulatory obligations. It also has criminal authority to pursue money-laundering violations and the ability to prosecute unlicensed money-transmitting businesses (FATF 2015b). British Virgin Islands. Administrative anti-money-laundering and combating terrorism financing (AML/CFT) breaches are handled either by the Financial Services Commission or by the Financial Intelligence Agency. If, during this time, it is found that there is some criminal element to the breach, the matter is turned over to the police. Conversely, if the police encounter cases that may reveal a breach in the AML/CFT framework, this information is passed on to the police financial investigation unit for further investigation. The police can, through established memoranda of understanding, share information with the Financial Intelligence Agency and the Financial Services Commission (FATF 2015b). Hong Kong SAR, China. The Custom and Excise Department relies primarily on criminal investigations and prosecutions to sanction money service operators. Five money service operators were convicted between 2012 and 2017. Fines were imposed in four cases for a total of HK$270,000 (US$34,400), and a 200-hour community service order was imposed in one case (FATF 2019a).
Other Sanctions In addition to administrative and criminal sanctions, competent authorities may take further measures should the breach be particularly serious. They can, for instance, combine fines with administrative and other disciplinary measures. The most severe disciplinary sanction a competent body can impose is the withdrawal of a license, which effectively terminates the activity of the financial institution. Such measures must be applied independently of any sanctions that the courts may impose. The supervisor must be vested with the authority to file an application with a prosecutor when there are reasonable grounds to believe that the financial institution or its board members and senior management participated in ML/TF activities. In the case of a serious offense, the supervisor must have direct access to the prosecutor and be able to have the case prosecuted as a criminal matter, notwithstanding the supervisor’s ability to impose specific administrative or civil sanctions. Furthermore, in some jurisdictions, stockholders of publicly traded financial institutions have brought lawsuits against members of the boards of directors and have succeeded in recovering monetary damages from individual members of the board.
PUBLICATION OF SANCTIONS The question of whether imposed sanctions should be made a matter of public knowledge is not addressed in either the FATF recommendations or the Basel Core Principles. However, the FATF CHAPTER 6: SANCTIONS AND ENFORCEMENT MEASURES
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