I am very pleased to co-chair again the Practicing Law Institute’s 2023 Anti-Money Laundering Conference on May 16, 2023, starting at 9 a.m. in New York City (the event also will be virtual).
I am also really fortunate to be working with co-chair Elizabeth (Liz) Boison
Farewell to 2022, and welcome 2023. As we do every year, let’s look back.
We highlight 12 of our most-read blog posts from 2022, which address many of the key issues we’ve examined during the past year: the Corporate Transparency Act (“CTA”) and beneficial ownership reporting; sanctions — particularly sanctions involving Russia; cryptocurrency and digital
On Friday, the Department of Justice (“DOJ”) announced two developments: First, the release of a 66-page report, The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets (the “Report”), issued under President Biden’s March 9, 2022 Executive Order on Ensuring Responsible Development of Digital Assets. Second, the establishment of the Digital Asset Coordinator (“DAC”) Network, a nationwide group of prosecutors designated as legal and technical experts in digital asset cases.
We focus here on the regulatory and legislative recommendations of the Report, which seek to expand significantly the ability of the DOJ to investigate and prosecute offenses involving digital assets. The recommendations include increasing criminal penalties, extending statutes of limitations, expanding venue provisions, enhancing the government’s forfeiture powers, and prohibiting virtual asset service providers from “tipping off” the subjects of grand jury subpoenas received by the providers. The recommendations also include making clear that the federal criminal law against maintaining an unlicensed money transmitter applies to peer-to-peer platforms that purportedly do not take custody or assume control over the digital asset being exchanged; ensuring that the Financial Crimes Enforcement Network (“FinCEN”) issues a final rule expanding the application of the Travel Rule under the Bank Secrecy Act (“BSA”) to digital asset transfers; and expanding or arguably clarifying that the BSA applies to platforms dealing in non-fungible tokens, or NFTs, including online auction houses and digital art galleries.
Revisions to BSA Will Inform Regulatory Examinations for Years to ComeAs 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 focus on some fundamental changes set forth in the AMLA’s very first provision, entitled “Establishment of national exam and supervision priorities.”
This new provision sets forth broad language affecting basic principles underlying the BSA and AML/CTF compliance. Specifically, it revises and expands the stated purpose of the BSA; enumerates specific factors for regulators to consider when examining financial institutions’ AML program compliance; requires the Secretary of the Treasury to establish public priorities for AML/CTF policy; and expands the duties and powers (and responsibilities) of the Financial Crime Enforcement Network (“FinCEN”). We discuss each of these changes in turn.
As always, future regulations will determine how these abstract statements of principle will be applied in practice. Ultimately, however, these AMLA amendments acknowledge the reality that AML/CTF compliance has become much more complex and nuanced since the early days of the BSA, and is a critical component of the soundness of the global financial system.
Continue Reading First Principles: AMLA Expands Stated Purpose of BSA and Exam Priorities
Farewell to 2020. Although it was an extremely difficult year, let’s still look back — because 2020 was yet another busy year in the world of money laundering and BSA/AML compliance.
We are highlighting 12 of our most-read blog posts from 2020, which address many of the key issues we’ve examined during the past year
On December 3, the U.S. House and Senate Armed Services Committees reached an agreement on the National Defense Authorization Act (“NDAA”), an annual defense spending bill. Within this huge bill (well over 4,500 pages) are widespread changes to the Bank Secrecy Act (“BSA”), coupled with other related changes dealing with money laundering, anti-money laundering (“AML”),
First Post in a Three-Post Series Regarding Recent Regulatory Action by FinCENThe Financial Crimes Enforcement Network (“FINCEN”) has been busy. In the last two weeks, FinCEN has posted three documents in the Federal Register. Any one of these publications, standing alone, would be significant, particularly given the infrequency of such postings. Collectively they reflect an unusual flurry of regulatory activity by FinCEN, perhaps spurred by the impending election and potential management turn-over at FinCEN. These publications are:
Today, we discuss the Final Rule, published on September 14, 2020, extending BSA/AML regulatory requirements to banks lacking a Federal functional regulator. In our next posts, we will discuss the advanced notice and request for comment.
The Final Rule provides that banks lacking a Federal functional regulator now will be required to (i) develop and implement an AML program, (ii) establish a written Customer Identification Program (“CIP”) appropriate for the bank’s size and type of business, and (iii) verify the identity of the beneficial owners of their customers. While stressing the perceived importance of closing this prior gap in regulatory coverage, FinCEN also attempted to minimize concern that the Final Rule would impose a serious burden on the covered financial institutions. The Final Rule will become effective on November 16, 2020, with a compliance deadline of March 15, 2021.
Continue Reading Regulatory Round Up: FinCEN Extends BSA/AML Requirements to Banks Lacking a Federal Functional Regulator
Federal Register Notice Implicates Debate Over BSA Reporting BurdenAs we have blogged (here, here, and here), the Financial Crimes Enforcement Network (“FinCEN”) consistently has stressed the importance of Suspicious Activity Reports (“SARs”) and other Bank Secrecy Act (“BSA”) filing requirements to anti-money laundering (“AML”), counter-terrorism and law enforcement efforts. These vigorous pronouncements can be contrasted with certain critiques by industry groups and some commentators regarding the true operational value (or lack thereof) of BSA reporting requirements to law enforcement and financial institutions’ AML programs, particularly when compared to the overall costs associated with the current and rigorous regulatory regime. Lurking behind this debate is the possibility that some requirements of the BSA maybe reduced – or “reformed,” depending upon one’s perspective – through legislation. A recent regulatory filing by FinCEN illustrates this tension and ongoing debate.
On May 26, 2020, FinCEN issued a notice in the Federal Register (“Notice”) to renew the Office of Management and Budget (“OMB”) control numbers assigned to the SAR reporting regulations. The Notice is required in order to give the financial industry and affected stakeholders an opportunity to comment on existing regulatory requirements, as well as associated burdens. Although FinCEN has encouraged the industry to review the Notice and comment, it likely will not be surprised if at least some industry groups push back and criticize the associated estimates regarding burden. Regardless, the Notice provides interesting insights and statistics into current SAR reporting.
Continue Reading FinCEN Seeks Industry Comments on SAR Reporting Burden and Provides Plentiful SAR Stats
We are really pleased to be moderating the Practising Law Institute’s 2020 Anti-Money Laundering Conference on May 12, 2020, starting at 9 a.m. Perhaps needless to say, this year’s conference will be entirely virtual. But the conference still should be as informative, interesting and timely as always. Our conference co-chair, Nicole S. Healy of Ropers
We are pleased to offer the latest episode in Ballard Spahr’s Consumer Financial Monitor Podcast series — a weekly podcast focusing on the consumer finance issues that matter most, from new product development and emerging technologies to regulatory compliance and enforcement and the ramifications of private litigation.
In this podcast, we examine two recent OCC