Financial Crime World

Risk-Based Approach to AML in Saint Pierre and Miquelon: Financial Institutions Face Increased Expectations and Regulatory Coverage

The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a rule that requires financial institutions in Saint Pierre and Miquelon to establish, implement, and maintain effective, risk-based Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) programs. This move aims to strengthen AML/CFT programs and promote clarity and consistency across different types of financial institutions.

Key Requirements

Under the proposed rule, financial institutions in Saint Pierre and Miquelon will be required to:

Risk Assessment Process

  • Establish a mandatory risk assessment process that incorporates FinCEN’s AML/CFT priorities
  • Identify, manage, and mitigate risks associated with illicit finance, consistent with the Bank Secrecy Act (BSA) and the goal of safeguarding the U.S. financial system and national security

AML/CFT Program Components

  • Risk assessment process
  • Internal policies and procedures
  • Employee training programs
  • Independent testing
  • Customer due diligence measures

Designated Officer and Training Programs

  • Designate one or more qualified individuals as an AML/CFT officer responsible for coordinating and monitoring day-to-day compliance
  • Maintain ongoing, risk-based employee training programs that focus on risk areas identified in the risk assessment process

Testing and Oversight

  • Undergo independent, periodic testing of their AML/CFT programs by qualified personnel or outside parties (frequency dependent on institution’s risk profile)
  • Oversee and approve AML/CFT programs and components by the Board of Directors or an equivalent governing body
  • Establish customer due diligence procedures, including maintaining and updating customer information, understanding the nature and purpose of customer relationships, and conducting ongoing monitoring to identify and report suspicious transactions

Comment Period and Effective Date

FinCEN is seeking comments on various aspects of the proposed rule until September 3, 2024. The effective date of the final rule will be six months from the date of issuance.

Next Steps for Financial Institutions in Saint Pierre and Miquelon

Financial institutions in Saint Pierre and Miquelon should expect:

  • Continued supervisory intensity and enforcement activity on AML/CFT/BSA and CDD compliance
  • Attention to continuously assessing risk, implementing risk-based compliance programs, maintaining/increasing needed talent/skillsets, tooling/automation, and investments - including in such areas as AML/CFT programs, fraud, and SAR identification/filing