The Monetary Crimes Enforcement Community (FinCEN) requested public suggestions concerning potential regulatory amendments to the Bank Secrecy Act’s anti-money laundering (AML) guidelines Wednesday.
The company, which is a division of the U.S. Treasury, stated the proposals into account will present monetary establishments with further flexibility in addressing evolving AML threats, and can end result within the “enhanced effectiveness and effectivity” of the AML program.
Consultants say the proposals will present welcome readability for banks’ compliance applications. Nonetheless, not all establishments will favor the “one dimension suits all” resolution.
The company stated it desires to make sure the AML program adapts to deal with the evolving threats of illicit finance, cash laundering, terrorist financing and associated crimes — a few of which the company says have modified significantly because the Bank Secrecy Act’s preliminary passage in 1970.
Lots of the proposed adjustments would deliver readability to areas with which monetary establishments battle and have been the reason for enforcement actions, stated Julie Copeland, companion at StoneTurn, a world advisory agency that makes a speciality of regulatory, danger and compliance points.
“For instance, clarifying the necessities and supervisory expectations concerning danger assessments, detrimental information searches, buyer dangers classes, et cetera, could be enormously useful and would scale back the likelihood that one regulatory physique has a distinct interpretation of buyer danger classes,” she stated.
FinCEN’s proposal to outline an “efficient and fairly designed” AML program would additionally cut back regulatory arbitrage, Copeland stated. “The satan shall be within the particulars of how that is outlined,” she stated.
In its submitting, FinCEN steered publishing a nationwide checklist referred to as “Strategic Anti-Cash Laundering Priorities” at common intervals to establish high-risk areas in AML compliance.
A nationwide bulletin would offer welcome readability for banks which have needed to outline the federal government’s priorities, Copeland stated.
However not all banks shall be proud of the idea of “one dimension suits all” in a number of of the company’s proposals and can possible search to tailor the proposals to totally different monetary establishment sorts and sizes, she stated.
The effectiveness of Bank Secrecy Act compliance is usually troublesome to quantify and outline, Braddock Stevenson, counsel at O’Melveny & Myers, stated in an e-mail.
“This [advanced notice of proposed rulemaking] represents a vital step ahead in implementing an precise resolution,” stated Stevenson, who served as a deputy in FinCEN’s enforcement division.
“And not using a technique to quantify or outline ‘effectiveness,’ these efforts would actually change into a query of who can inform their regulator the perfect ‘compliance program’ story. FinCEN’s use of Nationally Set AML priorities would assist create a transparent purpose publish for outlining an efficient program,” Stevenson wrote.
“Nonetheless, simpler stated than finished, because the breadth of the U.S. monetary system signifies that cash laundering priorities might be vastly totally different by state,” he stated. “Nationally set AML priorities that do not account for state particular priorities may go away some establishments and legislation enforcement on the surface trying in.”