On January 1, 2021, the United States Congress enacted the Anti-Money Laundering Act of 2020 (the “AMLA”), as part of the National Defense Authorization Act (the “Act”).  The AMLA includes extensive and fundamental reforms to anti-money laundering (“AML”) laws in the United States, including the Bank Secrecy Act (“BSA”).

In a previous client alert,

On December 10, the Financial Crimes Enforcement Network (FinCEN) issued new guidance interpreting section 314(b) of the USA PATRIOT Act and rescinding FinCEN’s previous guidance. Section 314(b) is intended to establish a safe harbor for financial institutions that voluntarily share (in accordance with the statute’s terms) information regarding possible terrorism and money laundering.  The new guidance, which is in the form of a Fact Sheet, appears aimed at providing further encouragement and assurance to financial institutions to participate in section 314(b).
Continue Reading FinCEN Issues Guidance on 314(b) Information Sharing Among Financial Institutions

On December 8, 2020, the House passed the National Defense Authorization Act (the “NDAA” or “Act”), which includes over 200 pages of significant reforms to the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) laws that have been working their way through Congress for several years. Despite some remaining objections from President Trump and

On November 19, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, and Office of the Comptroller of the Currency (collectively, the “Agencies”) issued a joint fact sheet clarifying how banks subject to the Bank Secrecy Act (“BSA”) should apply a risk-based approach to customer due diligence (“CDD”) requirements for charities and other non-profit organizations.

Continue Reading Federal Banking Agencies and FinCEN Issue Joint Statement on Risk-Based Approach to Customer Due Diligence for Charities and Non-Profit Organizations

On September 14, 2020, the Financial Action Task Force (“FATF”) — an inter-governmental anti-money laundering (“AML”) and counter-terrorist financing (“CFT”) standard-setting organization — issued a report on red flag indicators of money laundering and terrorist financing for virtual assets (the “Report”).

Based on over 100 case studies, the Report highlights potential red flag indicators of virtual assets being used for criminal activity.  The Report is the latest guidance related to FATF’s Focus on Virtual Assets and is meant to complement FATF’s June 2019 guidance on developing a risk-based approach to virtual assets and virtual asset service providers.


Continue Reading Financial Action Task Force (FATF) Issues Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing

On Monday, September 14, 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (the “final rule”) requiring minimum standards for anti-money laundering (“AML”) programs for banks without a federal functional regulator (“covered banks”). The final rule implements a notice of proposed rulemaking issued on August 25, 2016.

The final rule applies to a limited set of specialized institutions, including, among others: state-chartered non-depository trust companies, non-federally insured credit unions, and a small number of other non-federally insured state-chartered institutions, private banks, and international banking entities. The date for these covered banks to come into compliance with the final rule is March 15, 2021, which is 180 days after the final rule was issued.


Continue Reading FinCEN Issues Final Rule on Bank Secrecy Act Requirements for Banks Without a Federal Functional Regulator

As we noted in a client alert late last week, the federal banking agencies released on August 13, 2020, a joint statement on enforcement of Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) requirements.  At the time, the Federal Deposit Insurance Corporation made reference to a possible separate “Statement on Enforcement of the Bank Secrecy Act” from FinCEN. 

The Financial Crimes Enforcement Network (FinCEN) issued guidance today, which:

  • requested financial institutions affected by the COVID-19 pandemic to contact FinCEN’s Regulatory Support Section and their functional regulator as soon as practicable if they have concerns about potential COVID-19-related delays to their ability to timely file Bank Secrecy Act (BSA) reports, including Suspicious Activity Reports (SARs);
  • advised financial institutions to remain alert to malicious or fraudulent transactions involving bad actors seeking to exploit the pandemic.

FinCEN is not the only agency concerned about COVID-19-related fraud.  On Friday, Interpol issued a warning concerning financial scams related to COVID-19; yesterday, the FBI tweeted a warning on COVID-19 cyber-scams; and over the past week, New York’s Attorney General and its Department of Financial Services have issued warnings and, in the case of the Attorney General, multiple orders targeting price gouging and fake medical treatments.  (Update:  late in the day today, U.S. Attorney General William Barr released a memorandum directing U.S. Attorneys to clamp down on COVID-19-related crimes, including sales of fake cures and phishing email schemes.)


Continue Reading FinCEN Issues COVID-19-Related Guidance on SAR Filings, Heightened Risk of Disaster Fraud

On March 6, 2020, the American Bankers Association (“ABA”), on behalf of the banking industry in 49 states and Puerto Rico, sent a letter to leaders of the Senate Banking, Housing and Urban Affairs Committee (the “Committee”) urging them to advance a bill that would expand banking access for legal marijuana businesses, the Secure and Fair Enforcement Banking Act of 2019 (the “SAFE Banking Act,” S. 1200).

In September 2019, the U.S. House of Representatives overwhelmingly passed H.R. 1595, the SAFE Banking Act.  The SAFE Banking Act would allow banks to serve marijuana-related businesses in states where the activity is legal.  It does not facilitate marijuana sales in states that have chosen not to legalize the drug.

In its letter the ABA stated that, while their members do not take a position on the legalization of marijuana, they are committed to serving the financial needs of their communities.  The letter explained, “thirty-three states covering 68 percent of the nation’s population have legalized marijuana for medical or adult-use, and the issue could appear on as many as 10 state ballots this November.”  Current federal law, including the Controlled Substances Act, prevents banks from providing services to marijuana businesses without fear of federal sanctions.  As a result, according to the ABA, local marijuana businesses and service providers to such businesses are forced to operate on an all-cash basis, which in turn creates serious “public safety, revenue administration and legal compliance concerns in local communities.”


Continue Reading Financial Group Urges Senate to Advance SAFE Banking Act

On Friday, the leaders of the Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), and Financial Crimes Enforcement Network (“FinCEN”) (collectively, the “Agencies”) issued a “Joint Statement on Activities Involving Digital Assets” (the “Joint Statement”).  The Joint Statement serves as a reminder that businesses engaged in activities involving digital assets – or, as they are sometimes called, virtual currencies or cryptocurrencies – should be attentive to their anti-money laundering (“AML”) obligations, including under the Bank Secrecy Act (“BSA”).

The Joint Statement notes that the BSA requires “financial institutions” to:  (1) establish and implement an effective AML program; and (2) comply with certain recordkeeping and reporting requirements, including the filing of suspicious activity reports (“SARs”).  These requirements apply not just to a financial institution’s traditional lines of businesses, but also to its businesses involving digital assets.


Continue Reading Leaders of the SEC, CFTC, and FinCEN Issue Joint Statement Emphasizing AML Obligations for Digital Asset Activities