Financial Crime World

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FinCEN Proposes Changes to Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) Programs

The Financial Crimes Enforcement Network (FinCEN) has outlined proposed changes to Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) programs for financial institutions in the United States. The following are key points from the proposed rule:

Key Changes

  • Risk-Based Approach: The proposed rule emphasizes a risk-based approach to AML/CFT programs, requiring financial institutions to consider and evaluate innovative approaches to meet their BSA compliance obligations.
  • Responsibility and Oversight: The duty to establish, maintain, and enforce an AML/CFT program remains the responsibility of persons in the United States who are accessible to and subject to oversight by the Secretary of the Treasury and the appropriate Federal functional regulator.
  • Approval by Board of Directors: An AML/CFT program must be approved and subject to oversight by a financial institution’s board of directors or equivalent body.

Broader Considerations

  • De-risking Prevention: The proposed rule seeks to avoid one-size-fits-all approaches to customer risk that can lead to financial institutions declining to provide financial services to entire categories of customers.
  • Innovation Encouragement: The AML Act encourages technological innovation and the adoption of new technology by financial institutions to more effectively counter money laundering and the financing of terrorism.
  • Feedback Loops: The proposed rule facilitates a focus on the AML/CFT Priorities and their incorporation into risk-based programs, which in turn would feed into critical feedback loops between FinCEN, law enforcement, financial regulators, and financial institutions.

Next Steps

  • Public Comment Period: Financial institutions can send questions or comments regarding the contents of this fact sheet to the FinCEN Regulatory Support Section at frc@fincen.gov.
  • Implementation: The proposed rule would set a critical foundation for potential future changes in the AML/CFT framework as part of the multi-step, multi-year implementation of the AML Act.

Overall, these proposed changes aim to modernize the AML/CFT regime, encourage innovation, advance law enforcement and national security objectives, and further safeguard the U.S. financial system from illicit activity.