Financial Crime World

Here is the rewritten article in Markdown format:

Risk-Based Approach to AML/CFT in Réunion Takes Centre Stage

The Financial Crimes Enforcement Network (FinCEN) has announced a proposed rule aimed at strengthening and modernizing financial institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) programs. The new approach will require financial institutions to establish effective, risk-based, and reasonably designed AML/CFT programs that focus on the highest priority threats.

Background

The proposed rule is based on changes to the Bank Secrecy Act (BSA) as enacted by the Anti-Money Laundering Act of 2020 (AML Act). Deputy Secretary of the Treasury Wally Adeyemo highlighted the importance of this initiative, stating that it will enable financial institutions to partner with government agencies in addressing serious law enforcement and national security issues related to illicit financing.

Key Components

  • The proposed rule would amend existing program rules to explicitly require financial institutions to establish risk-based AML/CFT programs with certain minimum components, including:
    • A mandatory risk assessment process
    • Clarity and consistency across FinCEN’s program rules for different types of financial institutions
  • The proposal aims to avoid one-size-fits-all approaches to customer risk that can lead to financial institutions declining to provide services to entire categories of customers. Instead, it encourages financial institutions to focus on the highest priority threats, taking into consideration the effects of financial inclusion.

Importance

The proposed rule is a critical part of efforts to ensure the AML/CFT regime is working to protect the financial system from longstanding threats such as corruption, fraud, and international terrorism, as well as rapidly evolving threats like domestic terrorism and cybercrime. FinCEN Director Andrea Gacki emphasized that the proposed rule is essential in building a more effective and risk-based AML/CFT regulatory and supervisory regime.

Next Steps

Written comments on FinCEN’s proposed rule must be received within 60 days following its publication in the Federal Register. The proposal is a key component of Treasury’s objective of building a more effective and risk-based AML/CFT regulatory and supervisory regime.