Financial Crime World

Financial Crime Prevention in US Banking Sector Under Scrutiny

Strengthening Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Programs

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has announced a proposed rule aimed at modernizing financial institutions’ AML/CFT measures, a crucial step in preventing financial crime in the United States.

Moving Forward with Anti-Money Laundering and Countering the Financing of Terrorism

The proposed rule is designed to strengthen anti-money laundering and countering the financing of terrorism programs by:

  • Improving customer due diligence requirements
  • Enhancing suspicious activity reporting
  • Increasing transparency and accountability for financial institutions

Separation from US Financial System

In a separate development, FinCEN issued a final rule under section 311 of the USA PATRIOT Act, effectively severing Al-Huda Bank from the US financial system. The Iraqi bank has been accused of serving as a conduit for terrorist financing, prompting the Treasury Department to prohibit domestic financial institutions and agencies from opening or maintaining correspondent accounts for or on behalf of the bank.

Enhancing Cooperation between Financial Institutions and Law Enforcement

FinCEN is working to support local, state, federal, and international law enforcement investigations through its electronic filing system for Bank Secrecy Act forms. The agency’s efforts aim to:

  • Enhance cooperation between financial institutions and law enforcement agencies in combating financial crime
  • Improve the efficiency of financial intelligence sharing
  • Strengthen the global fight against money laundering and terrorist financing

Public Comment Sought

The proposed rule is now open for public comment, with the Treasury Department seeking feedback from stakeholders on how to strengthen AML/CFT programs and prevent financial crimes in the US banking sector.

Some key areas of focus for comments include:

  • How to improve customer due diligence requirements
  • Ways to enhance suspicious activity reporting
  • Suggestions for increasing transparency and accountability for financial institutions