Financial Crime World

Anti-Money Laundering Laws in the United States

The United States takes a strong stance against money laundering, with an estimated 2-5% of all economic activity worldwide related to the laundering of criminal proceeds. Trillions of dollars are funnelled through innocent-seeming channels every year to support the operations of terrorists, drug traffickers, prostitution rings, cyber attackers, and other dangerous actors.

The Financial Action Task Force (FATF) and US Anti-Money Laundering Laws

To counter money laundering, financial institutions in the US are required by law to be vigilant in detecting potential money laundering. The FATF sets standards that many Western countries, including the US and EU countries, follow.

Key Legislation: The Bank Secrecy Act (BSA) of 1970

The BSA is the most important piece of legislation in the US fight against money laundering. It imposes compliance obligations on financial institutions and requires them to:

  • Report cash transactions over $10,000
  • Report suspicious activity
  • File reports with the Financial Crimes Enforcement Network (FinCEN) for cash transactions exceeding $5,000 or aggregating that amount

Customer Due Diligence and Politically Exposed Persons (PEPs)

Financial institutions in the US are also required to conduct customer due diligence, which includes identifying the ultimate beneficial owner (UBO) of a client entity. This is critical for preventing shell companies and other complex corporate structures from being used to launder money.

  • The US has its own unique approach to PEPs, requiring enhanced due diligence only for senior foreign political figures.
  • Financial institutions must report any transaction that involves or aggregates at least $5,000, or $2,000 for money services businesses, and which they have reason to suspect is related to a financial crime.

Consequences of Non-Compliance

Failure to comply with Anti-Money Laundering (AML) regulations can result in severe penalties, including:

  • Fines ranging from $10,000 per day for failures to report foreign financial agency transactions to $100,000 per day for failures in customer due diligence
  • Imprisonment of up to 20 years per violation

Compliance Solutions with VinciWorks

VinciWorks offers comprehensive AML training and reporting solutions that help financial institutions comply with these regulations. Our team will guide you through every step of the process, from client onboarding to risk assessment and document collection.

  • We provide realistic scenarios, real-life case studies, and customizable options to ensure that your institution is well-equipped to detect and prevent money laundering activities.
  • For more information, fill out the short form below.