Financial Crime World

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Treasury Department Announces Proposed Rule to Strengthen Anti-Money Laundering Regulations

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has announced a proposed rule aimed at strengthening and modernizing anti-money laundering and countering the financing of terrorism (AML/CFT) programs for financial institutions.

Background

The proposed rule is based on changes to the Bank Secrecy Act (BSA) as enacted by the Anti-Money Laundering Act of 2020 (AML Act). It also reflects recommendations from Treasury’s De-risking Strategy, which aimed to promote financial inclusion while managing illicit finance risks.

Key Provisions

The proposed rule seeks to amend existing regulations to require financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs. This includes:

  • Mandatory Risk Assessment Process: Financial institutions must conduct a mandatory risk assessment process to identify and assess the risks associated with their customers and transactions.
  • Reviewing Government-Wide AML/CFT Priorities: Institutions must review government-wide AML/CFT priorities and incorporate them into their risk-based programs.
  • Incorporating Industry Feedback: The rule will take into account feedback from industry stakeholders to ensure that the final rule is effective and practical.

Next Steps

The proposed rule is open for public comment until 60 days after its publication in the Federal Register. Written comments on the proposal must be received within this timeframe. You can view the proposal online at https://www.federalregister.gov/public-inspection/2024-14414/anti-money-laundering-and-countering-the-financing-of-terrorism-programs.

This proposed rule is a critical step towards creating a more effective and risk-based AML/CFT regulatory and supervisory regime. It will enable financial institutions to focus their resources and attention on the highest priority threats, while protecting national security and the integrity of the U.S. financial system.