Anti-laundering costs rise sharply
Banks' costs to prevent money laundering have "increased substantially" in the last three years, driven by regulation and increasing risks in emerging markets, a survey by KPMG International found.
Average prevention costs jumped 58 percent in the last three years, exceeding predictions of a 43 percent gain, the survey of 224 banks and senior executives found.
North American banks had the biggest increases, with costs up an average of 71 percent.
Britain and other countries tightened money-laundering rules after the September 11, 2001, attacks in the United States to prevent financial terrorism.
Increased scrutiny has forced banks to boost spending to enforce money laundering rules in recent years.
Estimated money laundering flows may be more than $1 trillion annually, KPMG said, citing a US report to Congress.
"Banks are clearly continuing to make increased efforts to tackle the money laundering threat effectively," said Karen Briggs, global head of anti-money laundering at KPMG Forensic, in an e-mailed statement.
"These efforts are considerable, but nevertheless, many banks are struggling to design and implement an effective anti-money laundering strategy."
The UK Treasury said on February 28 it will step up efforts to choke off funds used by suspected terrorists, establishing a unit to freeze assets and channeling more money to investigators probing money laundering through charities.
Authorities have frozen almost 200 bank accounts linked to terrorist suspects and seized almost 97 million pounds from criminal groups in the fiscal year through March 2006.
Bloomberg News
(China Daily 07/10/2007 page15)
