Journal of Economic Criminology (Dec 2024)
Should banks face criminal prosecution for breaches of Money Laundering Regulations or are civil fines effective. Analysis of the significance of the first ever criminal conviction of a bank (NatWest) for breaches of the Money Laundering Regulations
Abstract
This paper uses the rare opportunity of the first ever criminal conviction in the UK of a bank for breaches of AML Regulations (NatWest) to examine the AML framework. The article investigates whether the current framework and enforcement are working in addressing the breaches. The article considers the significance of this criminal prosecution in relation to cases where civil fines were imposed, such as in the case of HSBC in 2021. In doing so, the article considers the reasons why the civil fine approach has been a preferred choice for the regulator and examines the reluctance to criminally prosecute banks. This paper takes a distinctive approach to the AML discussion as it focuses on a discussion of the novel aspect of the first ever criminal conviction of a bank in the UK, for breaches of their AML obligations under the Regulations. Additionally, it considers the effectiveness of a criminal prosecution in these circumstances as well as the impact of a criminal conviction on a Bank, not only on its reputation but also on the Banks’ willingness to improve their AML compliance systems and procedures. Furthermore, this paper discusses the popular civil fine approach to breaches of AML onligations, which is in this paper demonstrated by a discussion of a record-breaking civil fine imposed on HSBC by the same regulator (FCA), in the same year as the conviction of NatWest has taken place.
