Breaking: US Regulators Impose New Anti-Money Laundering Requirements
In a major effort to combat financial crime, the US government has introduced new regulations aimed at preventing money laundering and other illicit activities. The measures are designed to prevent US-covered financial institutions from providing correspondent accounts directly or indirectly to designated financial institutions.
New Rules for Correspondent Accounts
Under the new rules, US-covered financial institutions, including banks, broker-dealers, futures commission merchants (FCMs), introducing brokers (IBs) and mutual funds, will be prohibited from establishing or maintaining correspondent relationships with foreign financial institutions subject to special measures. Additionally, these institutions must notify their correspondent account-holders that they are no longer permitted to offer services to designated financial institutions through their US-based institution.
Enhanced Due Diligence and Reporting Requirements
The new rules will require US-covered financial institutions to conduct enhanced due diligence on correspondent account-holders and report suspicious transactions related to these accounts. This is part of a broader effort by the US government to enhance anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.
Implications for Foreign Financial Institutions
The regulation is expected to have significant implications for foreign financial institutions, particularly those with connections to countries subject to special measures under the Bank Secrecy Act (BSA).
Key Points:
- US-covered financial institutions will be prohibited from providing correspondent accounts directly or indirectly to designated financial institutions.
- Correspondent account-holders must be notified that they are no longer permitted to offer services to designated financial institutions through their US-based institution.
- Enhanced due diligence and reporting requirements will apply to correspondent account-holders.
- The regulation aims to prevent US-covered financial institutions from being used as conduits for illicit activities.
Enforcement and Compliance
The new rules come into effect on [insert date] and will be enforced by the Federal Financial Institutions Examination Council (FFIEC), which has published an updated examination manual outlining the requirements for AML/CFT compliance. The FFIEC manual is available online at [Hyperlink].
Related News:
- The New York Department of Financial Services (DFS) has announced new anti-money laundering requirements for state-licensed financial institutions, including banks, cheque cashers and money transmitters.
- DFS has also launched a new initiative to combat money laundering and other financial crimes.
Conclusion
The introduction of these new regulations marks a significant step forward in the fight against financial crime. The measures are designed to prevent US-covered financial institutions from being used as conduits for illicit activities, and will require enhanced due diligence and reporting requirements.