Corruption and cybercrime top US anti-money laundering concerns


The U.S. Treasury Department on Wednesday released a wide range of national anti-money laundering priorities, citing corruption and cybercrime as areas where financial institutions should focus their compliance resources.

The list is the first created by the Treasury’s Financial Crimes Enforcement Network, or FinCEN, following a major overhaul of U.S. money laundering laws in January. Legislation passed by Congress required FinCEN to develop a national strategy to combat money laundering and terrorist financing and to publish a priority list every four years.

Financial sector groups had advocated incorporating the prioritization effort into anti-money laundering law, hoping that this would allow their members to allocate their compliance resources more efficiently. A survey by LexisNexis Risk Solutions estimated the total expected cost of financial crime compliance worldwide to be nearly $ 214 billion this year. FinCEN receives around 3 million suspicious activity reports each year, according to the agency.

The Bank Policy Institute said in a statement that the industry group welcomed the release of the priorities.

“Much work remains to be done to transform these priorities into rules for implementing these priorities in anti-money laundering programs, but we look forward to working with FinCEN and see this announcement as an encouraging first step. “said Angelena Bradfield, senior vice president of the Bank Policy Institute. .

But the list released by FinCEN on Wednesday leaves little to no areas of transnational crime unmentioned, leaving some compliance experts concerned that the new process could simply increase the industry’s overall regulatory burden. In addition to corruption and cybercrime, the list also lists domestic and international terrorism, drug and human trafficking, as well as a wide range of fraud and organized crime.

“It was a real opportunity to focus financial intelligence in the United States in a way that could create better results for everyone,” said Jeremy Kuester, former head of FinCEN and lawyer at the law firm White. & Case LLP. “Prioritization is the way to do it, but it’s not priorities, it’s just general topics. ”

FinCEN and a number of other regulators involved in setting the priorities said Wednesday in a joint statement that their publication would not create immediate changes to the sector’s regulatory obligations.

The Treasury unit said it would later issue regulations clarifying how financial institutions should incorporate the priorities it had identified into their compliance programs. The anti-money laundering law gives FinCEN 180 days after publication of priorities for issuing regulations.

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The Treasury unit is also working on implementing other parts of the anti-money laundering overhaul law, including the creation of a business ownership database, which lawmakers say limit the use of anonymous front companies. Mr Kuester said he hoped that future rule-making efforts could lead to a more sophisticated approach to help banks tackle financial crimes more effectively.

The divergence between what financial institutions had advocated and the outcome presented on Wednesday stems in part from a disconnect between industry and policymakers on what day-to-day risk looks like for banks, according to Chip Poncy, co – responsible for the practice of risky financial crimes and the compliance firm K2 Integrity.

When deciding whether or not to file a suspicious activity report, financial institutions often review a transaction that contains inaccurate, incomplete or out of date information, or assess whether it is unusual for some other reason, he said. They rarely get to a place where they can tie a transaction to one of the priorities listed by FinCEN.

“All the time, resources and money are spent to determine if this is one of these priorities,” said Mr. Poncy. “Nine times out of 10, you never know. “

While the priorities come as no surprise to most compliance professionals, Mr Poncy said the new process will hopefully fuel a prolonged dialogue on what is needed to make anti-money laundering safeguards a reality. US money more effective.

“It’s just not going to scratch the itch of people who wanted it clearer where we should be spending our time. It was not a realistic expectation, ”he said. “The biggest problem is, if we don’t get real relief from it, how will we do it? “

Write to Dylan Tokar at [email protected]

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