AML

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 January 1, 2021, the Senate voted to override President Trump’s veto of 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.  The Senate’s…

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 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 December 3, 2018, the Board of Governors of the Federal Reserve System (“Federal Reserve), the Federal Deposit Insurance Corporation (“FDIC”), the Financial Crimes Enforcement Network (“FinCEN”), the National Credit Union Administration (“NCUA”), and the Office of the Comptroller of the Currency (“OCC”) (collectively, “agencies”) released a joint statement on innovative efforts to combat money laundering and terrorist financing.

In the joint statement, the agencies encouraged banks to consider and, if appropriate, responsibly implement innovative approaches with respect to their anti-money laundering (“AML”) and Bank Secrecy Act (“BSA”) compliance obligations. In particular, the agencies discussed innovative internal financial intelligence units that may be tasked with “identifying complex and strategic illicit finance vulnerability and threats.” The agencies also discussed artificial intelligence and digital identity technologies and recognized the value of these innovative approaches in strengthening banks’ BSA/AML compliance programs, as well as potentially reducing compliance costs.…

Continue Reading Financial Agencies Release Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing

Representatives of the Office of the Comptroller of the Currency (“OCC”), the Financial Crimes Enforcement Network (“FinCEN”), and the Federal Bureau of Investigation (“FBI”) testified on Thursday, November 29 before the Senate Committee on Banking, Housing, and Urban Affairs (“Banking Committee”) on anti-money laundering (“AML”) issues.

The testimony highlighted some tensions between the views of the different regulators, with the OCC appearing to be supportive of providing some regulatory relief to financial institutions, while FinCEN continues to see the value of the current requirements under the Bank Secrecy Act (“BSA”). Coming on the heels of reports that a bipartisan group of Senators are working on BSA reform legislation, the testimony revealed that FinCEN at least may prove reluctant to support some of the proposed reforms.…

Continue Reading Senate Testimony Highlights Tensions in BSA/AML Reform Efforts as Lawmakers Consider Bipartisan Legislation

The Australian Transaction Reports and Analysis Center (“AUSTRAC”) recently implemented a new regulation for digital currency exchange providers operating in Australia called the Anti-Money Laundering and Counter-Terrorism Financing (Digital Currency Exchange Register) Policy Principles 2018.  AUSTRAC is Australia’s financial intelligence agency and is responsible for the enforcement of Australia’s Anti-Money Laundering and Counter-Terrorism Financing…

The Clearing House published this week a report that highlights potential anachronisms and inefficiencies in current U.S. anti-money laundering / counter-financing of terrorism regulation.  The report makes 8 core recommendations for reform, including the following:

  • Centralizing Regulatory Responsibility:  “The Department of Treasury, through its Office of Terrorism and Financial Intelligence (TFI), should take a more

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On December 19, 2016, the Financial Stability Board (“FSB”) issued its end-of-2016 progress report regarding its action plan to assess and address the decline in correspondent banking. The report sets out a roadmap the FSB intends to follow in 2017 in response to the decline of correspondent banking, a critical part of the global payments system.  In the next year, the FSB’s action plan consists of new data analyses exploring the dimensions and implications of the issue, clarifying regulatory expectations through new guidance from the FSB’s Financial Action Task Force (“FATF”) and other standard-setting bodies, enhancing domestic risk management frameworks in jurisdictions that are home to affected respondent banks, and strengthening tools for due diligence by correspondent banks.
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Continue Reading Financial Stability Board Publishes 2017 Roadmap for Correspondent Banking

President-Elect Donald J. Trump has said little about his plans for money laundering and terrorist financing enforcement, or his plans for the agency responsible for many of the Federal government’s anti-money laundering (“AML”) initiatives, the Financial Crimes Enforcement Network (“FinCEN”).

FinCEN is a bureau within the Treasury Department and not a fully independent agency.  Its leadership and policy agenda will be shaped by three yet-to-be-announced Presidential appointments, each of them subject to Senate confirmation:

  • the Treasury Secretary, who selects FinCEN’s Director;
  • the Treasury Department’s Under Secretary for Terrorism and Financial Intelligence, who must approve all regulations issued by FinCEN; and
  • the General Counsel of the Treasury Department, who oversees FinCEN’s Chief Counsel.

[Note: FinCEN’s leadership structure and authorities are summarized here.]

The current Under Secretary, Adam J. Szubin, and the current Director of FinCEN, Jamal El-Hindi, are both career civil servants who hold acting rather than permanent appointments.  The current General Counsel of the Treasury Department, Priya Aiyar, is also an acting appointee.

While Mr. Szubin, Mr. El-Hindi and Ms. Aiyar have no fixed terms, replacing Mr. Szubin and Mr. El-Hindi, in particular, may not be a priority for the President-Elect’s transition team.  Mr. Szubin rose through the ranks in the Justice Department’s terrorist litigation task force before running the Office of Foreign Assets Control (“OFAC”).  And, like Mr. El-Hindi – a longtime FinCEN staffer with prior experience at both OFAC and the Treasury Department’s Office of General Counsel – he is well respected and without partisan baggage.

At the same time, however, both FinCEN and the Treasury Department’s Office of Terrorism and Financial Intelligence as a whole are responsible for areas of policy at the core of the President-Elect’s platform: terrorism and border security.  FinCEN was first created as a financial intelligence agency and, under the USA PATRIOT Act, it is a clearinghouse for law enforcement information requests related to the financing of terrorism, among other things.…

Continue Reading Post-Election Outlook for Financial Regulatory Agencies: Financial Crimes Enforcement Network