by Franca Harris Gutierrez, Boyd Johnson, Bruce Newman, Michael Dawson, Zachary Goldman, Rachel Dober, Michael Romais, Alina Lindblom, and Andrew Miller
This is Part III of a three-part post. For Part II, discussing SAR reform, click here. For Part I, discussing the collection of beneficial ownership information, click here.
by Franca Harris Gutierrez, Boyd Johnson, Bruce Newman, Michael Dawson, Zachary Goldman, Rachel Dober, Michael Romais, Alina Lindblom, and Andrew Miller
This is Part II of a three-part post. For Part I, discussing the collection of beneficial ownership information, click here.
Over the past few years, FinCEN and federal banking agencies have expressed general support for more effective, efficient, and innovative AML compliance programs, and both the letter and spirit of the NDAA represent another step in that direction.[1] Recent statutory and regulatory efforts have paved the way for concrete shifts in the compliance regime. In December, the Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency (“OCC”) finalized parallel Notices of Proposed Rulemaking (“NPRMs”) entitled Exemptions to Suspicious Activity Report Requirements. The regulators proposed modified regulations that, if finalized, would enable them to grant financial institutions broader exemptions to the SAR filing requirements in connection with innovative compliance approaches.[2]
by Franca Harris Gutierrez, Boyd Johnson, Bruce Newman, Michael Dawson, Zachary Goldman, Rachel Dober, Michael Romais, Alina Lindblom, and Andrew Miller
Anti-money laundering (“AML”) issues have been a focus of regulators and law enforcement for the past decade and will likely continue to be a priority issue area for the Biden Administration. The AML landscape is shifting considerably as a series of regulatory actions in the last months of 2020 and the January 1, 2021 passage of the National Defense Authorization Act for Fiscal Year 2021 (“NDAA”)[1] — adopted with bipartisan support overriding President Trump’s veto—bring real change to the regulatory environment at the start of the new administration. Indeed, the NDAA is the most significant amendment to the AML landscape in a generation, since the adoption of the USA PATRIOT Act, and will require extensive implementation by the Treasury Department. The regulatory and legislative changes together have two principal themes: (i) a conscious effort to evolve AML compliance and the Bank Secrecy Act and its implementing regulations (collectively, the “BSA”) to make the system more efficient and effective; and (ii) adapting the BSA to a new generation of threats.
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
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
by David S. Cohen, Franca Harris Gutierrez, Sharon Cohen Levin, Jeremy Dresner and Michael Romais
Last week the Financial Crimes Enforcement Network (FinCEN) issued much-anticipated Frequently Asked Questions (PDF: 387 KB) (FAQs) that provide additional guidance to financial institutions relating to the implementation of the new Customer Due Diligence Rule (CDD Rule), set to go into effect on May 11, 2018.[1] In general, the FAQs clarify certain issues that have caused implementation challenges for financial institutions. While FinCEN’s earlier guidance provided a general overview of the CDD Rule—including the purpose of the rule, the institutions to which it is applicable, and some relevant definitions—the new FAQs provide greater detail for financial institutions seeking to comply with the CDD Rule. The FAQs are meant to assist covered financial institutions in understanding the scope of their customer due diligence (CDD) obligations, as well as the rule’s impact on their broader anti-money laundering (AML) compliance. While the guidance is helpful in clarifying some of FinCEN’s expectations, the implementation challenge lies in applying the CDD Rule to a financial institution’s specific products and services.
As financial institutions work to meet the CDD Rule’s fast-approaching May 11 compliance deadline, they should pay special attention to the following key areas summarized below. Continue reading
by David S. Cohen, Kimberly A. Parker, Jay Holtmeier, Ronald I. Meltzer, David M. Horn, Lillian Howard Potter, and Michael Romais
On December 20, 2017, President Trump issued a new Executive Order (PDF: 235 KB) (EO) targeting corruption and human rights abuses around the world.
The EO implements last year’s Global Magnitsky Human Rights Accountability Act (the Global Magnitsky Act), which authorized the president to impose sanctions against human rights abusers and those who facilitate government corruption.[1] The US Department of the Treasury’s Office of Foreign Assets Control (OFAC), which will administer the EO, also added 15 individuals and 37 entities to its Specially Designated Nationals and Blocked Persons List (SDN List). Continue reading
by David S. Cohen, Franca Harris Gutierrez, Sharon Cohen Levin, Jeremy Dresner, and Michael Romais
Treasury’s Financial Crimes Enforcement Network (“FinCEN”) recently announced the creation of the FinCEN Exchange, a new voluntary platform to facilitate information sharing between the government and industry on topics related to anti–money laundering (“AML”) and other financial crime issues. The program represents a significant step forward on two related priority areas for FinCEN: information sharing and public-private partnerships. Continue reading