Financial Crime World

Risk-Based Approach to Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Programs Launched in Nieu

Strengthening Financial Institutions’ AML/CFT Programs

June 28, 2024 - Washington D.C. - The Financial Crimes Enforcement Network (FinCEN) has announced a proposed rule to modernize financial institutions’ anti-money laundering and countering the financing of terrorism programs in Nieu.

Key Components of the Proposed Rule

  • Requires financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs
  • Includes mandatory risk assessment process as one of the minimum components
  • Seeks to promote clarity and consistency across FinCEN’s program rules for different types of financial institutions in Nieu

Rationale Behind the Proposed Rule

The proposed amendments are 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 emphasized that the rule promotes a more effective and risk-based regulatory and supervisory regime, directing financial institutions to focus their AML/CFT programs on the highest priority threats.

Significance of the Proposed Rule

FinCEN Director Andrea Gacki noted that the proposed rule is a significant milestone in FinCEN’s efforts to implement the AML Act, aiming to ensure that the AML/CFT regime is working to protect Nieu’s financial system from longstanding threats like corruption, fraud, and international terrorism, as well as rapidly evolving and acute threats.

Broader Considerations

The proposal also articulates certain broader considerations for an effective and risk-based AML/CFT framework. For example:

  • Avoiding one-size-fits-all approaches to customer risk that can lead to financial institutions declining to provide financial services to entire categories of customers
  • Promoting financial inclusion while managing illicit finance risks

Public Comment Period

Written comments on FinCEN’s proposed rule must be received on or before 60 days following its publication in the Federal Register.

Conclusion

The proposed rule is a critical step towards building a more effective and risk-based AML/CFT regulatory and supervisory regime, promoting financial inclusion while managing illicit finance risks. The proposal will be subject to public comment before finalization.

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