Recently, The New York Times published an article[1] detailing alleged issues at the New Museum of Contemporary Art in New York City, highlighting most prominently matters concerning compliance with employee safety and import regulations. The article—which also flagged various other possible governance and/or compliance failures at the New Museum such as matters concerning board oversight, executive compensation, and physical asset protection—serves as a timely reminder that regulatory compliance is key not just for corporate organizations, but for nonprofit ones as well. This post describes the major risks facing nonprofits who fail to meet regulatory requirements. A few regulatory areas (safety, cybersecurity, and international trade and sanctions) are also discussed below, as examples of compliance challenges facing nonprofits. Finally, this post considers basic general steps nonprofit organizations can take to examine their regulatory responsibilities and compliance procedures as a whole.
Category Archives: Nonprofits
Anti-Money Laundering and Sanctions: Trends and Developments Emerging Under the Trump Administration
By David S. Cohen, Franca Harris Gutierrez, Sharon Cohen Levin, Ronald I. Meltzer, Jeremy Dresner, David M. Horn, Zachary Goldman, Michael Romais and Semira Nikou
I. Executive Summary
Bank Secrecy Act/anti-money laundering (BSA/AML) and sanctions matters continue to be a core focus of regulators, law enforcement agencies, policymakers and Congress, and the story of the Obama and Trump Administrations on AML and sanctions is one of general continuity. Policymakers are turning to sanctions with increasing frequency and launching programs that are increasingly complex, and regulatory and enforcement agencies are devoting significant resources and attention to AML. Congress continues to debate BSA reform, while the Treasury Department and federal banking regulators have encouraged financial institutions to use technology to support BSA compliance, in the hope of making the process more effective and efficient.
As Congress, the executive branch and regulators all continue to focus a great deal of attention on AML and sanctions issues, the expectations of financial institutions to prevent financial crime are growing. Sanctions regulations are becoming more numerous, are reaching more deeply into securities markets and are branching into new areas of technology—such as cryptocurrency. Simultaneously, the AML regime’s push toward greater transparency in a number of contexts, from virtual currency regulation to beneficial ownership reform, means that financial institutions will shoulder greater responsibility for knowing their customers and their customers’ activities. Strict distinctions among different categories of financial crime are starting to collapse, as an increasing number of sanctions programs and FinCEN advisories focus on issues such as corruption and misappropriation of assets by politically exposed persons (PEPs). Continue reading