As more states legalize cannabis to some degree, the resulting patchwork of laws becomes ever more difficult to navigate for financial institutions, regulators, entrepreneurs, legislators, journalists, and consumers.  Some states continue to wrestle with legalization, while others have moved on to addressing labeling, marketing, and financial concerns.

The Cannabis Group at Ballard Spahr therefore created

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

On April 12, 2021, the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System (“Board”), the Federal Deposit Insurance Corporation (“FDIC”), the National Credit Union Administration (“NCUA”) and the Financial Crimes Enforcement Network (“FinCEN”) issued a Request for Information (“RFI”) requesting comment on the extent to which the agencies’ previous guidance on model risk management supports banks’ compliance with Bank Secrecy Act (“BSA) and Anti-Money Laundering (“AML”) regulations and Office of Foreign Asset Control (“OFAC”) requirements.

The RFI asks for comments from interested parties on suggested changes to guidance or regulations, and whether aspects of the agencies’ approaches to BSA/AML and OFAC compliance are either working well, or could be improved.  The agencies explained that the reason for the RFI is to further understand current bank practices, and determine whether additional explanation or clarification of their guidance may be helpful.  Although the genesis of the RFI is not entirely clear, it appears that it was issued in response to certain financial institution inquiries or comments regarding how the maintenance of their BSA/AML compliance programs should incorporate principles set forth in earlier, more general regulatory guidance on model risk management for banks, which we describe below.  Further, the RFI has not occurred in a vacuum, but rather has appeared in the midst of a major, ongoing overhaul of the BSA/AML legislative, regulatory and enforcement regime.  Comments to the RFI must be received by June 11, 2021.
Continue Reading Risk Management: Agencies Issue Request for Information on Intersection of Model Risk Management Guidance and BSA/AML Compliance

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

Much has occurred in the last two months regarding the relationship between financial institutions and Marijuana-Related Businesses, or MRBs.  In this post, we discuss three major developments, all of which share a complex connection.  First, the National Credit Union Administration (“NCUA”) recently pursued its first enforcement action against a credit union for Anti-Money Laundering (“AML”) compliance failures when servicing MRBs.  Second, two cannabis industry executives were convicted of bank fraud for allegedly tricking banks and other financial institutions into unwittingly extending financial services to their MRB.  Third, and despite this enforcement drumbeat regarding MRBs, Congress has introduced again, with bi-partisan support, the SAFE Banking Act, which seeks to normalize the banking of cannabis by prohibiting federal bank regulators from taking certain actions against financial institutions servicing MRBs.
Continue Reading Banking and Cannabis Enforcement Round Up:  NCUA Imposes First Penalty Relating to Cannabis Banking Services; Cannabis Industry Execs Convicted of Defrauding Banks into Providing Financial Services; Congress Re-Introduces the SAFE Banking Act

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

The Occupational Health and Safety Administration (“OSHA”) now will investigate workers’ complaints of retaliation for reporting alleged money laundering and antitrust-related violations under new whistleblower statutes.  On February 19, 2021, the Department of Labor announced that OSHA would oversee whistleblower claims alleging retaliation under two laws – the Anti-Money Laundering Act of 2020 (“AMLA”) and