Meanwhile, Congress Wants a Report on Russian Money Laundering and Its Relationship to the Real Estate Industry

FinCEN announced today that, once again, it is extending the Geographic Targeting Order, or GTO, regarding real estate transactions.

FinCEN’s press release is here.  The new GTO is here.  It is identical to the most recently

Art & Antiquities; Beneficial Owners; Foreign Corruption — and More

We are really pleased to be moderating, once again, the Practising Law Institute’s 2021 Anti-Money Laundering Conference on May 11, 2021, starting at 9 a.m. This year’s conference again will be entirely virtual — but it will be as informative, interesting and timely as

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) amended the Bank Secrecy Act (“BSA”) to expand greatly the options for whistleblowers alleging anti-money laundering (“AML”) violations and potentially create a wave of litigation and government actions, similar to what has occurred in the wake of the creation of the Dodd-Frank whistleblower

Eighth Blog Post in an Extended Series on Legislative Changes to the BSA/AML Regulatory Regime

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) contains major changes to the Bank Secrecy Act (“BSA”), coupled with other changes relating to money laundering, anti-money laundering (“AML”), counter-terrorism financing (“CTF”) and protecting the U.S. financial system against illicit foreign actors.   In this post, we review several provisions of the AMLA section entitled “Modernizing the Anti-Money Laundering and Countering the Financing of Terrorism System.” These provisions signal potentially significant changes in the BSA reporting regime for suspicious activity and currency transactions – albeit in the future, after the performance of studies and reports which Congress has required regarding the effectiveness of Suspicious Activity Report (“SAR”) and Currency Transaction Report (“CTR”) filings.

These provisions of the AMLA require the Treasury Secretary to acquire a fuller picture of the reporting regime as it currently functions in regards to SAR and CTR filings. We repeatedly have blogged about the ongoing debate regarding the utility of SARs and other BSA reports versus the onus the system places on financial institutions (see, for example, here, here, here and here). The AMLA now creates the opportunity for the government to respond to that debate with a data-driven approach. The theme of these AMLA provisions is feedback – both internal and external – regarding how (and whether) SARs work.  Notably, they also address the issue of whether the monetary filing thresholds for SARs (generally, $5,000) and CTRs ($10,000) should be increased.


Continue Reading Review, then Reform? AMLA Charts a Path for the Future of SARs and CTRs

Seventh Post in an Extended Series on Legislative Changes to BSA/AML Regulatory Regime

On April 5, 2021, the Financial Crimes Enforcement Network (“FinCEN”) issued an advance notice of proposed rulemaking (“ANPRM”) to solicit public comment on questions pertaining to the implementation of the Corporate Transparency Act (“CTA”), passed as part of the Anti-Money Laundering Act of 2020 (“AMLA”).  The CTA requires certain legal entities to report their beneficial owners at the time of their creation to a database accessible by U.S. and foreign law enforcement and regulators, and to U.S. financial institutions seeking to comply with their own Anti-Money Laundering (“AML”) and Customer Due Diligence (“CDD”) compliance obligations.

According to the ANPRM, the ability to operate through legal entities without requiring the identification of beneficial owners is a key risk for the U.S. financial system.  The CTA seeks to mitigate the risk by reducing an individual’s ability to use corporate structures to conceal illicit activity such as money laundering, financing of terrorism, proliferation financing, serious tax fraud and human and drug trafficking.  The CTA seeks to set a clear federal standard for incorporation practices, protect vital U.S. national security interests, protect interstate and foreign commerce, better enable various law enforcement agencies to counter illicit activities and bring the U.S. into compliance with international standards.  With the goals of the CTA in mind, the ANPRM seeks public input on procedures and standards for reporting companies to submit information to FinCEN about their beneficial owners, and input on the implementation and maintenance of a database safeguarding disclosed information subject to appropriate protocols.

Written comments on the ANPRM are due soon – by May 5, 2021.  The CTA is a critical development in AML regulation, and FinCEN can expect a considerable response to this important ANPRM, both from the businesses that are covered and the financial institutions that would have access to the beneficial ownership database.  Although the ANPRM is detailed and poses many questions, the ultimate, real-world implementation of the CTA will involve even more questions.
Continue Reading FinCEN Seeks Comments on Corporate Transparency Act Implementation

Sixth Post in an Extended Series on Legislative Changes to BSA/AML Regulatory Regime

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) contains major changes to the Bank Secrecy Act (“BSA”), coupled with other changes relating to money laundering, anti-money laundering (“AML”), counter-terrorism financing (“CTF”), and protecting the U.S. financial system against illicit foreign actors.

A recurring theme of the changes offered by AMLA is information sharing. AMLA mandates that the Department of Treasury’s supervision priorities must include “appropriate frameworks for information sharing among financial institutions, their agents and service providers, their regulatory authorities, associations of financial institutions, the Department of the Treasury, and law enforcement authorities.” The increased emphasis on information sharing is accompanied by provisions requiring confidentiality and data security protocols.

The Financial Crimes Enforcement Network (“FinCEN”) is already beginning to address AMLA’s focus on the sharing and protection of information, as it explained in its recent detailed Report on FinCEN’s Innovation Hours Program, which focuses on fostering technological innovation in AML/CTF compliance.  In this post, we explore AMLA’s expansion of information sharing, corresponding privacy and data security protections, and the tensions that lie therein.
Continue Reading AMLA Information-Sharing and Privacy and Data Security Concerns

Fifth Post in an Extended Series on Legislative Changes to BSA/AML Regulatory Regime

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) makes major changes to the Bank Secrecy Act (“BSA”) and the U.S. approach to money laundering, anti-money laundering (“AML”), counter-terrorism financing (“CTF”) and protecting the U.S. financial system against illicit foreign actors.  For example, the AMLA requires covered businesses to report beneficial ownership information to a central federal database; broadens the stated purpose of the BSA; expands the options and protections for whistleblowers alleging AML violations; and expands the U.S. government’s authority to subpoena information from foreign financial institutions with U.S. correspondent bank account relationships.

In addition to these changes, Congress also has used the AMLA as a tool to gather information on complex issues involving money laundering risks and BSA/AML compliance by requiring many studies and reports.  In this post, we focus on two important issues for which Congress has required reports from the Government Accountability Office (“GAO”):  human trafficking and de-risking.

The willingness to address these problems through the AMLA shows that Congress is aware of the nexus between money laundering and human rights violations—and more importantly, appears ready to leverage the information gathered by the GAO in order to potentially address that nexus through future legislation.  Congress is not alone in its concern.  For example, the United Nations issued a report earlier this month on how transnational financial crime can impair sustainable development across the globe, worsen inequality, and fuel instability.
Continue Reading Congress Tasks GAO to Study the Intersection of Money Laundering and Humanitarian Issues:  Human Trafficking and De-Risking

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) amended the Bank Secrecy Act (“BSA”) to expand greatly the options for whistleblowers alleging anti-money laundering (“AML”) violations and potentially create a wave of litigation and government actions, similar to what has occurred in the wake of the creation of the Dodd-Frank whistleblower program.

We thought it would be valuable to learn how counsel for potential whistleblowers regard the AMLA and its implications.  We therefore are very pleased to welcome to Money Laundering Watch guest bloggers Mary Inman and Carolina Gonzalez of the law firm Constantine Cannon.

Ms. Inman is a partner in the London and San Francisco offices of Constantine Cannon. After 20+ years representing whistleblowers in the U.S., she moved to London in July 2017 to launch the firm’s international whistleblower practice, and she now splits her time between the London and San Francisco offices. She specializes in representing whistleblowers from the U.S., U.K., Europe and worldwide under the American whistleblower programs, including the federal and various state False Claims Acts and the Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), Internal Revenue Service (“IRS”), Department of Transportation (“DOT”) and new Treasury Department BSA whistleblower programs. Ms. Inman’s efforts to export the American whistleblower programs to the U.K., including her efforts on behalf of a successful British whistleblower, were featured in a recent New York Times article “Law Firm Sees Britain as Hunting Ground for U.S. Whistleblower Cases.” Her successful representation of three whistleblowers exposing fraud in the Medicare Advantage program was featured in the February 4, 2019 issue of the New Yorker magazine in an article entitled “The Personal Toll of Whistle-Blowing.” Ms. Inman represents renowned whistleblower Tyler Shultz who exposed the now infamous Silicon Valley blood testing start-up Theranos, and regularly speaks on lessons to be learned from this scandal.

Ms. Gonzalez is a senior associate in Constantine Cannon’s London office and a member of the firm’s International Whistleblower practice.  She represents international whistleblowers under various U.S. and non-U.S. whistleblower reward programs.  Her practice focuses on financial services fraud, foreign corruption,  and money laundering. Carolina is heavily involved in developing various practice initiatives in emerging markets like Latin America, Africa, and the Middle East.

This blog post again takes the form of a Q & A session, in which Ms. Inman and Ms. Gonzalez respond to questions posed by Money Laundering Watch about the BSA’s new whistleblower provision. We hope you enjoy this discussion regarding this important new development, and how it is regarded by potential whistleblowers and their counsel. – Peter Hardy and Meredith Dante
Continue Reading The New BSA Whistleblower Provision – From the Whistleblowers’ Perspective.  A Guest Blog.

Fourth Post in an Extended Series on Legislative Changes to BSA/AML Regulatory Regime

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”), contains major changes to the Bank Secrecy Act (“BSA”), coupled with other changes relating to money laundering, anti-money laundering (“AML”), counter-terrorism financing (“CTF”) and protecting the U.S. financial system against illicit foreign actors.  In this post, we explore the AMLA’s significant expansion of the U.S. government’s authority to subpoena information from foreign financial institutions that maintain correspondent banking relationships with U.S. banks.
Continue Reading AMLA Expands DOJ Grand Jury Subpoena Power Over Correspondent Bank Accounts and Foreign Banks