I’ve been thinking quite a bit recently about personal accountability for AML failings, and whether or not it is a good idea. This has been prompted in part by the FCA’s extension of its Senior Managers and Certification Regime, and in part by growing despair at the seeming ineffectiveness of financial penalties levied on firms for AML failings. I was so exercised, in fact, that I wrote an article on this very theme for leading trade paper (you can thank me later, Timon) Money Laundering Bulletin, which in turn led to a well-mannered debate on LinkedIn. Judging from the comments and feedback, quite a few people agree with the general idea of holding senior individuals personally responsible (and ultimately liable) for systemic AML failings within the organisations they control. So when a story appeared in the news a few days ago about those senior heads starting to roll at Danske Bank, I read it with interest – could this be the start of the change?
Danske Bank has been the subject of media scrutiny in recent months, with allegations being made that poor AML controls in its Estonian branch have led to the laundering of the proceeds of crime from Azerbaijan, Moldova and Russia. Danske has held up its hands to many of the allegations, admitting to “major deficiencies in control and governance” and has launched its own investigation. And at the start of this month, it announced that Lars Morch, the director who has been responsible for Danske’s business banking since 2012 – including its international banking units and Baltic operations – had decided to resign. He will leave immediately but – and this is what caught my eye – he will remain on the Danske payroll until October 2019. That’s eighteen months’ gardening leave! Now is it just me, or does that sound more like reward (and a pretty fantastic reward at that) than a punishment? Make a complete Horlicks of your job, and go off on an eighteen month paid holiday. It’s not quite the disincentive I had in mind, I will admit.
I hate money laundering 