On Tuesday, September 15, 2020, the U.S. Treasury Division’s Monetary Crimes Enforcement Community (“FinCEN”) revealed a Last Rule (Fed. Reg. 2020-20325) designed to assist implement the USA PATRIOT Act of 2001 by eliminating the anti-money laundering (“AML”) program exemption for personal banks, credit score unions that aren’t federally insured, some belief firms, and different establishments not supervised by federal regulators such because the Federal Reserve, the Workplace of the Comptroller of the Foreign money, the Federal Deposit Insurance coverage Company and the Securities and Trade Fee.
The brand new rule requires every federally unregulated bank to determine and implement an in-house AML program that, at a minimal, consists of —
Inside insurance policies, procedures, and controls establishing:
A Buyer Identification Program (“CIP”), that features: (1) verifying the identification of any particular person looking for to open an account; (2) upkeep of buyer verification data (e.g., title, tackle, and so on.); and (3) figuring out whether or not the particular person seems on any authorities company lists of recognized or suspected terrorists or terrorist organizations.
A Helpful Possession protocol for figuring out and verifying the identification of the helpful house owners of the banks’ authorized entity prospects (topic to sure exclusions and exemptions), in compliance with FinCEN’s “CDD Rule.”
Designation of a Compliance Officer.
Ongoing worker coaching program.
Unbiased auditing to check AML applications.
Moreover, the brand new FinCEN rule requires federally unregulated banks to adjust to the improved due diligence insurance policies, procedures, and controls for any correspondent or non-public banking accounts that they set up, preserve, administer, or handle for a non-U.S. particular person, in order to allow the monetary establishment to detect and report suspicious transactions that may contain cash laundering. Coated establishments should additionally abide by the improved scrutiny necessities for the accounts of senior international political figures (together with their members of the family or shut associates) to detect and report transactions that may contain the proceeds of international corruption.
The brand new FinCEN rule is anticipated to roll into impact in mid-November and coated establishments doubtless shall be anticipated to fall into compliance with the rule by mid-March 2021. CSG’s Banking and Finance Group, co-led by Shirley U. Emehelu, former Chief of Asset Restoration and Anti-Cash Laundering for the U.S. Lawyer’s Workplace (DNJ), stands able to counsel purchasers coated by the rule on the design, implementation, coaching, and testing of their AML applications.