In recent years, the banking sector in the European Union has been shaken by different scandals related to money laundering.
On July 24th, 2019, the European Commission published reports including one on the assessment of recent alleged money laundering cases involving EU credit institutions. These reports demonstrated the gaps in the implementations of rules.

The fight against money laundering and the financing of terrorism is one of the main priorities of the European Commission. However, many financial institutions did not comply effectively, or not at all, with the requirements in the fight against money laundering and terrorist financing.

Top 10 AML fines of the past decade

BNP Paribas SA
Violation of U.S. economic sanctions against Cuba, Sudan, and Iran by hiding information from wire transfers to pass through U.S. systems and avoid raising red flags.
UBS Group AG
Advice towards new French clients for the deposit of their money in Switzerland for money laundering and tax shielding purposes.
Binance, the world's leading cryptocurrency exchange, pleaded guilty to Anti-Money Laundering, unlicensed money transmitting, and sanctions violations. The $4 billion settlement with the U.S. Justice Department, along with CEO Changpeng Zhao's resignation, underscores the consequences of prioritizing growth over legal compliance in the crypto sector.
Goldman Sachs
Etats Unis
Involvement in a corruption and money-laundering scheme involving the bank's 1MDB fund, intended to support energy development in Malaysia. The $6.5 billion collected was used, among other things, to purchase luxury real estate and yachts.
HSBC Holdings Plc
Great Britain
Allowed its banks to be used to launder $881 million from Mexican and Colombian drug cartels.
Dankse Bank
Danske has defrauded US lenders over its anti-money-laundering measures at its Estonia branch, allowing “high-risk customers”, including many from Russia, to access the US financial system.
JP Morgan
United States
Allowed Bernard Madoff to carry out a ponzi scheme, including money laundering, and ignored its AML obligations by not flagging his suspicious transactions.
Standard Chartered
Great Britain
Failure to collect sufficient information on a client exporting products that could be used for military purposes. Violations of embargoes against Iran, Syria, and Cuba.
ING Groep NV
Failure to detect and stop hundreds of millions of euros being laundered through their bank accounts for years.
Westpac Bank
More than 23 million breaches (of AML laws) over US$7 billion. Bank officials are accused of disregarding international transfer of funds used for child exploitation.

As a result of these various scandals and to guarantee the integrity of the financial system of the European Union, these different reports made by the European Commission underlined the lessons learned and the things that need to be improved. The major gaps identified in the latest AML European Commission report are:

  • 1

    Misapplication or inapplicability of the legal obligations to which anti-money-laundering and terrorist financing systems and controls are subject;

  • 2

    Deficiencies of the authorities in the fight against ML and TF;

    • 3

      Lag between risk propensity and risk management;

      • 4

        Ineffective supervision of anti-money laundering and terrorist financing policies.

      The dissonance between Member States AML diligence

      Besides, the Commission noted that the Member States did not apply the rules in the same way, which makes it difficult for the Union to prevent money laundering and the financing of terrorism.
      Banks have not complied with essentials requirements of the anti-money laundering directive, such as risk assessment, customer due diligence and reporting of suspicious transactions to financial intelligence units and activities ;
      Public authorities intervened only after significant risks had materialized or only when they were aware of repeated cases of non-compliance with rules and governance. The reactions of banking supervisors have been variable in timing and action. The cooperation between the national supervisory bodies and the European Central Bank should be further improved.
      Even with the latest reforms and directives on money laundering (4th, 5th AML directive and soon the 6th AML directive) which solve a large part of the problems noted, the European Commission must implement new legislative acts.
      Despite all the legislation taken to the fight against money laundering, several scandals still plague the banking institutions of the European Union. Provisions must be made to reduce or even eradicate these scandals. The public authorities will have to be proactive and not wait for several cases to be repeated. Perhaps a regulation will facilitate the task and help to standardize the fight against money laundering and terrorism in the European Union.
      Michel Cliquet - Pideeco Network Partner
      Michel Cliquet Senior Consultant
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