09 Mar Brink’s $42 Million AML Compliance What Went Wrong?

Brink’s AML compliance failure – Brink’s Global Services USA, Inc., a part of The Brink’s Company, recently faced a significant penalty. They agreed to pay a $42 million fine to settle allegations from the Financial Crimes Enforcement Network (FinCEN) and the Department of Justice (DOJ). These allegations were about violations of the Bank Secrecy Act (BSA), which is the main anti-money laundering (AML) law in the United States. Let’s explore what went wrong and the lessons we can learn from this situation.

Brink’s $42 Million AML Compliance Settlement

Brink’s admitted to breaking the BSA rules. They failed to set up an effective AML program and did not file suspicious activity reports as required. The company was found to have shipped hundreds of millions of dollars across the Mexican border for high-risk entities. One of these entities was a Mexican currency exchanger that later admitted to BSA violations. Brink’s also moved more than $15 million from a money service business in San Diego to another in Florida without checking who the final recipient was. As part of the settlement, Brink’s has reviewed their internal processes and increased their compliance staff. They have also created new roles, including a deputy chief ethics and compliance officer.

What Went Wrong?

One of the main issues was that Brink’s did not have a strong AML program in place. Such a program is essential to identify and reduce the risks of money laundering and other financial crimes. Brink’s admitted they lacked the necessary controls to monitor and report suspicious activities. Filing Suspicious Activity Reports (SARs) is a key part of AML compliance. These reports help authorities detect and prevent money laundering. Brink’s failure to file SARs for high-risk transactions brought them under regulatory scrutiny. Additionally, Brink’s moved large sums of money without proper checks to identify the final recipients. This lack of due diligence increased the risk of money laundering and other illegal activities. Brink’s did not register with FinCEN as a money services business, which is required under the BSA. This non-compliance added to their regulatory problems.

The Impact of the Fine

The $42 million fine is a warning for financial institutions and businesses handling money transfers. It stresses the need for strong AML programs and compliance with regulations. It also shows how failing to follow the rules can lead to major financial losses and harm a company’s reputation.

Lessons Learned

The Brink’s case offers several important lessons for financial institutions and businesses. Developing and maintaining an effective AML program is crucial for reducing the risks of money laundering. This includes having the necessary controls to monitor and report suspicious activities. Proper checks on all transactions and customers are essential for identifying and reducing risks. This includes verifying the identities of all parties involved in a transaction and identifying the final recipients. Filing SARs is a critical part of AML compliance. Financial institutions and businesses must have processes in place to identify and report suspicious activities. Compliance with regulatory requirements, such as registering with FinCEN as a money services business, is essential for avoiding regulatory scrutiny and potential fines.

The Role of Compliance Staff

One of the key steps Brink’s took after the settlement was to increase their compliance staff. This included creating new roles such as a deputy chief ethics and compliance officer. Having a dedicated team for compliance is crucial for any organisation. These professionals are responsible for ensuring that the company adheres to all regulatory requirements and has effective controls in place to prevent money laundering and other financial crimes.

The Importance of Continuous Training

Continuous training is essential for maintaining an effective AML program. Employees must be aware of the latest regulations and best practices in AML compliance. Regular training sessions can help ensure that staff are equipped with the knowledge and skills needed to identify and report suspicious activities. This is where KYC Lookup can be particularly beneficial. Our specialised AML and KYC online training services, including certification courses and video tutorials tailored to meet the specific needs of various industries and organisations.

Final thoughts, The $42 million fine imposed on Brink’s Global Services USA, Inc. is a clear reminder of the importance of AML compliance. Financial institutions and businesses must take proactive steps to develop and maintain strong AML programs, conduct thorough due diligence, file SARs, and follow regulatory requirements.

For those looking to improve their understanding of AML compliance and stay ahead of regulatory requirements, KYC Lookup offers specialised Anti-Money Laundering (AML) and Know Your Customer (KYC) online training courses. Our certification courses and video tutorials are tailored to meet the specific needs of various industries and organisations, ensuring relevance and effectiveness. By investing in AML and KYC training, businesses can better protect themselves from the risks associated with money laundering and other financial crimes.