Tag Archives: Zachary Goldman

Biden: The Fight Against Foreign and Transnational Corruption Is a National Security Interest

by Kimberly A. Parker, Jay Holtmeier, Christopher Cestaro, John F. Walsh, Edward C. O’Callaghan, Ronald C. Machen, Lillian Howard Potter, Chavi Kenney Nana, Zachary Goldman, Mandy Fatemi, and Gemma Bateman

On June 3, 2021, President Biden issued a National Security Memorandum establishing the fight against corruption both at home and abroad as a core United States national security interest and directing the development of a 200-day interagency review designed to culminate in a report and recommendations on how the United States government and its partners can better combat corruption, enhance transparency in the global financial system and promote good governance. When combined with the anti-money laundering (AML) legislation that entered into force with the January 2021 bipartisan passage of the National Defense Authorization Act for Fiscal Year 2021 (NDAA)[1]—the most significant reforms to US AML laws since the 2001 adoption of the USA PATRIOT Act—and a review of sanctions policy conducted by the Treasury Department, the Memorandum may lead to a heightened focus on illicit financial activity and corruption and may ultimately result in additional resources being allocated to anti-corruption and AML enforcement. Continue reading →

2021 AML Trends and Developments (Part III of III)

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.

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2021 AML Trends and Developments (Part II of III)

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.

Innovation and SAR Reform

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]

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2021 AML Trends and Developments (Part I of III)

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.

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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 →

Financial Institutions Alert: Marijuana-Related Businesses Developments in the Marijuana Industry and the Implications for Financial Institutions

By Sharon Cohen Levin, John F. Walsh, Paul M. Architzel, Franca Harris Gutierrez, Matthew T. Martens, Michelle Nicole Diamond, Emma Bennett, and Zachary Goldman

The myriad—and conflicting—state, federal and international laws governing the burgeoning marijuana industry have created a complicated legal landscape for financial institutions. In the United States, most states have legalized some form of marijuana use, but the manufacture, sale and distribution of marijuana nevertheless remains illegal under federal law. As a result, in providing financial products and services to US marijuana-related businesses (MRBs), a financial institution could risk violating the Controlled Substances Act (CSA), 21 U.S.C. § 841. Moreover, engaging in or facilitating transactions that contain proceeds from US marijuana sales could create liability under the money laundering laws.

Further complicating matters, Canada became the first major world economy to legalize recreational marijuana in October 2018. Because the US narcotics laws generally do not apply to activity that is legal abroad, providing financial products and services to Canadian MRBs would not violate the CSA or implicate the US money laundering laws. However, that is not the case in many European countries. The European Union recently passed a law expanding the extraterritorial scope of member countries’ money laundering laws with respect to certain narcotics-related offenses. These laws could now criminalize the transfer of funds from activity that is legal in the foreign country (e.g., marijuana sales in Canada) if that activity would be illegal in the home country.

Below we discuss the fragmented legal and regulatory landscape governing the marijuana industry as well as notable recent developments and their implications for global financial institutions. Continue reading →