Fines against MLROs expected to increase in 2009

Datanomic predicts more money laundering officers will face personal fines as the UK supervisor steps up enforcement of money laundering legislation

LONDON - Next year will see a sharp increase in fines against individual money laundering reporting officers (MLROs), not just financial institutions, as the Financial Services Authority (FSA) begins to clamp down on enforcement of anti-money laundering legislation, says compliance screening specialists Datanomic.

The FSA fined its first MLRO, from Sindicatum Holdings, in November. The move shows that MLROs in particular are in the spotlight and will be held personally liable if they fail to put proper money laundering controls in place. Firms have now had almost a year to update their internal screening systems since the Money Laundering Regulations 2007 came into force on December 15, 2007.

"The FSA is starting to show its teeth to ensure UK financial institutions take anti-money laundering regulations seriously," says Jonathan Pell, chief executive of Datanomic. "Individuals who hold the MLRO function have responsibilities and can be personally liable for their firm's failings. This should be seen as a warning shot on the importance of complying with the money laundering regulations, and we believe there will be more fines against more individuals to come. Mitigating risk against money laundering is vital to the integrity of the UK's financial markets. The message for MLROs is loud and clear - get your house in order or be held personally liable."