4.1 Sanctions in Administrative Law vs. Criminal Law
FATF Recommendation 35 requires that supervisory sanctions for breaches of AML/CFT requirements by institutions be effective, proportionate and dissuasive, and be applicable to both natural and legal persons.
- Administrative law
- Criminal law
- Informal measures, including oral and written compliance briefings and written warnings.
- Formal measures have a legal basis and are administrative sanctions.
4.2 Types and Characteristics of Administrative Sanctions
Administrative sanctions are intended to deter financial institutions and individuals from engaging in activities that could facilitate ML/TF/PF.
- Corrective Measures.
- Escalation Measures.
Sanctions can be imposed not only on the financial institution but on its personnel and members of the Board:
- Reprimend letter
- Corrective action
- Cease and desist order
- Monetary fine
- Appointing a Caretaker
- Operational Limitations or Prohibitions
- Suspension or Revocation of License
4.3 Effective, Proportionate, and Dissuasive Sanctions
- Effective: deter
- Dissuasive: discourage
- Proportional: fair
4.4 Publication of Sanctions
Financial sector supervisors may publicly disclose the non-compliant behavior of a financial institution. Public disclosure can be an effective way to contribute to greater transparency and accountability and may deter other financial institutions from engaging in similar behavior.
4.5 Judicial Review of Administrative Sanctions
A judicial review of an administrative sanction is a legal process in which a court reviews a decision made by a regulatory or administrative body regarding the imposition of sanctions. It is an important mechanism for ensuring that regulatory and administrative bodies act within their legal authority and that decisions are made in a fair, transparent, and accountable manner.
Grounds of judicial review:
- Illegality.
- Procedural unfairness.
- Irrationality.
