How Risky is Non-Compliance to Your Business?

Last year we saw our fair share of AML (anti-money laundering) failures and violations, resulting in eye-watering FCA and HMRC fines. According to Ponemon Institute and security company GlobalScape recent report, the annual cost of non-compliance to businesses now runs an average of $14.8 million, a 45 per cent increase since 2011.

In recent years, adhering to the laws and standards and monitoring the Compliance of business processes has evolved as a major concern for business owners. Meanwhile, the range can be anywhere from $2.2 million to $39.2 million. On the other hand, the cost of Compliance was found to average $5.5 million, up 43 per cent from 2011.

Staying compliant with ever-evolving regulations has become an ‘obvious’ business imperative, and failing to adhere to these regulations can put organisations in a fix. Before we dive into the risks of falling into the ‘non-compliant dungeon, ‘ let’s understand corporate Compliance. Operating in a multiplicity of countries inevitably also means complying with any local regulations.


What is Corporate Compliance?

Compliance at the corporate level involves adhering to a wide range of rules, regulations, laws, and standards designed to protect every aspect of your business. Right from obeying safety guidelines to following the standards for paying wages, an organization must comply with all the local, state, and federal laws.

Monitoring the Compliance of business processes with relevant regulations, constraints, and rules during runtime has evolved as a major concern in practice. Monitoring refers to continuously observing possible compliance violations and includes predicting their occurrence. Since the concept of business process compliance is vast, approaches related to process monitoring are hard to identify.

The cost of non-compliance and monetary fines have continuously increased in the past few years. However, business owners are becoming impatient, as these consequences would affect the organization. Increased complexity, enforced business changes, and individuals being held personally accountable are all set to continue because of continuous compliance failures.

Why is Compliance Crucial?

The following are six fundamental reasons why an organization should implement statutory Compliance.

  • Reason No. 1: is required by Law – All registered companies are mandatorily obligated by the law to follow statutory regulations and comply with them.
  • Reason No. 2: surprise audits – Non-compliance also invites unnecessary inspection and audits, leading to a waste of time and money.
  • Reason No. 3: the financial penalties are high – Failing to adhere to statutory Compliance will lead to hefty fines and indirect losses to organisations.
  • Reason No.4: potential imprisonment for everyone involved – Severe cases of non-compliance could result in imprisonment of the organisation’s CEO/Directors/Board members.
  • Reason No.5: Brand Value and Market Reputation – Payment of fines and imprisonment can destroy a company’s brand name in the market it thrives in.
  • Reason No.6: the organization can be forced to a shutdown – In cases that exhibit perilous non-compliance, authorities can even order companies to cease operations.

Several examples in the global business environment show the repercussions of non-compliance. Look at the following cases:

  • Amazon found guilty of breaching Dangerous Goods Regulations
  • Thames Water was ordered to pay record £20 million for river pollution
  • Google Is Fined $57 Million Under Europe’s Data Privacy Law
  • Westpac accused of 23 million breaches by money-laundering watchdog
  • Italy’s civil aviation authority ENAC threatens to ban Ryanair over alleged non-compliance

The biggest fine so far was the £102m imposed on Standard Chartered for “poor AML controls”, which saw “breaches in two higher risk areas of its business.” This is the second-largest financial penalty for AML failures imposed by the FCA.

Improve Your Compliance

A comprehensive compliance solution:

  • Reduces business risks;
  • Helps to expedite global expansion;
  • Enhances control and visibility; and
  • Enables the elimination of business risks/

After all, when it comes to non-compliance issues, ignorance of the law is no defense. As they say – “Being Compliance is not a choice, but a mandate” the regulatory environment will only get fiercer day by day, and companies that miss staying abreast of the global legal amendments might regret big-time.

The UAE, for example, has cracked down on their “Ultimate beneficial owner” (UBO) compliance requirements – a requirement that costs roughly Dh15 but results in a penalty of Dh15,000 up to Dh100,000 if businesses fail to comply. The UBO requirement was set up to prevent illicit activities such as money laundering or financing of terrorism.

The requirement reveals anyone who has direct or indirect control of an organization and requires all such information to set up or renew business licenses to the UAE Government. It’s great to see so many new procedures being put in place that can help you safeguard your business. Are you interested to know how your organisation can excel in global Compliance?


Anti-money Laundering solutions made easy…

There are many advantages to outsourcing portions of your Anti-Money Laundering (AML) compliance program to CRI Group™ . CRI™ Anti-money laundering (AML) advisory services help analyze systems and develop effective solutions that reduce your company’s risk of falling prey to employee, supplier or outside corporate and financial crimes. An effective AML framework is a testament to your organization’s position against crime. Our unmatched investigative capabilities, worldwide presence and a long-standing reputation for independence and integrity make us uniquely qualified to resolve regulatory concerns.

Our vast Anti-Corruption and Compliance network provides the protection you need when making critical bottom-line decisions crucial to your organisation’s success. Leave it for experts. Ensure you have the 360-degrees analysis of your challenges – get in touch with the experienced CRI Group’s AML team for a bespoke quote.


Take a proactive stance with the highest level of Anti-Money Laundering (AML) compliance as a part of your essential corporate strategy. Contact us today to learn more about our full range of services to help your organization stay protected.




Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI Group™ Chief Executive Officer

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