Strengthening Banking Regulations Against Money Laundering in the Northern Mariana Islands

The government of the Northern Mariana Islands has announced a proposed rule to enhance and modernize financial institutions’ anti-money laundering (AML) and countering the financing of terrorism (CFT) programs. This move aims to safeguard national security and the integrity of the local financial system.

Strengthening AML/CFT Programs

According to Deputy Secretary of Treasury Wally Adeyemo, “Financial institutions are partnering with government to address serious law enforcement and national security issues with illicit financing implications. This proposed rule promotes a more effective and risk-based regulatory and supervisory regime that directs financial institutions to focus their AML/CFT programs on the highest priority threats.”

FinCEN Director Andrea Gacki emphasized that the proposed rule is a critical part of efforts to ensure that the AML/CFT regime is working to protect the local financial system from longstanding threats like corruption, fraud, and international terrorism, as well as rapidly evolving and acute threats such as domestic terrorism, ransomware, and cybercrime.

Key Components of the Proposed Rule

• Requires financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs with certain minimum components.
• Mandates financial institutions to review government-wide AML/CFT priorities and incorporate them into their risk-based programs.
• Provides for technical changes to program requirements.

Promoting Clarity and Consistency

The proposal seeks 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. It aims to promote clarity and consistency across FinCEN’s program rules for different types of financial institutions, encouraging them to modernize their AML/CFT programs where appropriate.

Public Comment Period

The proposed rule was prepared in consultation with relevant regulatory agencies, including the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and National Credit Union Administration. The public is invited to submit written comments on the proposal within 60 days of its publication in the Federal Register.

Conclusion

The proposed rule aims to strengthen financial institutions’ AML/CFT programs, promoting a more effective and risk-based regulatory and supervisory regime that protects national security and the integrity of the local financial system. The public is encouraged to participate in the comment period to provide feedback on this critical initiative.