September 25, 2021

Volume XI, Number 268

Advertisement

September 24, 2021

Subscribe to Latest Legal News and Analysis

September 23, 2021

Subscribe to Latest Legal News and Analysis

September 22, 2021

Subscribe to Latest Legal News and Analysis

Addressing New Risks: FinCEN Sets Priorities for Combating Money Laundering and Terrorism Financing

On June 30, 2021, the Financial Crimes Enforcement Network (“FinCEN”), issued the first government-wide Priorities for anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) policy (the “Priorities”). In accordance with the Anti-Money Laundering Act of 2020 (“AMLA 2020”), FinCEN established the Priorities, after consulting with the Attorney General, and various Federal regulators, to assist covered financial institutions, (which include, banks, brokers-dealers, mutual funds, insurance companies, commodities dealers, precious metal and stone dealers, credit card companies, loan or finance companies, money services businesses, and housing government sponsored entities) with meeting their AML and CFT obligations, including maintaining an AML program that combats money laundering and terrorism financing.

The Priorities identified: (1) corruption; (2) cybercrime, including relevant cybersecurity and virtual currency considerations; (3) foreign and domestic terrorist financing; (4) fraud; (5) transnational criminal organization activity; (6) drug trafficking organization activity; (7) human trafficking and human smuggling; and (8) weapons proliferation financing as the most significant “threats to the U.S. financial system and national security.” These Priorities build upon traditional AML/CFT concerns, such as combating cybercrime, including ransomware and phishing schemes, as well as the evolving use of convertible virtual currency by “criminals and other bad actors.”

Covered financial institutions are not required to take any immediate action in response to the Priorities. Indeed, FinCEN, in consultation with the relevant Federal and State regulators, contemporaneously issued statements for banks and non-bank financial institutions, which recognize that the Priorities “do not create an immediate change” in Bank Secrecy Act (“BSA”) requirements or supervisory expectations. FinCEN also indicated that it will not examine banks or non-bank financial institutions for compliance with the Priorities at this time. Instead, FinCEN and the relevant Federal and State regulators intend to issue regulations to implement the Priorities in 180 days. Covered financial institutions will have no obligation to incorporate the Priorities into their risk-based BSA/AML compliance programs until the effective date of the forthcoming regulations. However, FinCEN suggested that covered financial institutions “may wish to start considering how they will incorporate” the Priorities into their compliance programs by “assessing the potential risks associated with” their particular products and services, customer base, and the geographic area of operation.

Although no immediate action is required, covered financial institutions should review the Priorities to evaluate the need to modify their BSA/AML programs and related policies and procedures. Indeed, the forthcoming regulations, which will likely be issued by the end of 2021, will create new opportunities for regulatory scrutiny. Notably, the AMLA 2020 significantly increased penalties for BSA violations. In addition, the AMLA 2020 expanded whistleblower rewards and protections. Thus, now more than ever, an ounce of prevention may be worth several pounds of cure.

©2021 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume XI, Number 214
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Melissa Jampol, Epstein Becker Law Firm, Health Care Attorney
Member

Melissa Jampol is a Member of the Firm in the Health Care and Life Sciences and Litigation practices, in the New York office of Epstein Becker Green. A former federal and state prosecutor, Ms. Jampol represents health care organizations, and their officers and directors, in a variety of enforcement matters at both the state and federal levels.

During her tenure as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of New Jersey, Ms. Jampol served in the Health Care and Government Fraud, Violent Crime, and...

212-351-4760
Janene Marasciullo, Epstein Becker Law Firm, New York, Labor and Employment, Litigation Attorney
Member

Janene Marasciullo is a Member of the Firm in the Employment, Labor & Workforce Management and Litigation & Business Disputes practices, in the New York office of Epstein Becker Green. Ms. Marasciullo has extensive first-chair experience litigating complex commercial, fraud, regulatory, and employment disputes, with an emphasis on disputes arising within the financial industry. In addition, she represents corporations and individuals during regulatory investigations and grand jury investigations...

212-351-3700
Michael Lynch Business Litigation NYC Epstein Becker Green
Associate

Michael L. Lynch is an Associate in the Litigation & Business Disputes practice, in the New York office of Epstein Becker Green. He will be focusing his practice on complex commercial cases, business disputes, breach-of-contract matters (including breach of non-competition and non-solicitation agreements and the misappropriation of trade secrets), and employment litigation.

Before joining Epstein Becker Green, Mr. Lynch served as a Law Clerk to Judge Paul G. Feinman, initially at the Appellate Division of the Supreme Court of New York, First...

212-351-4922
Advertisement
Advertisement
Advertisement