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Anti-money laundering in the U.S.
By Gregory Lisa
Like other countries around the world, anti-money laundering enforcement is high on the agenda in the United States.
Enforcement activity, civil and criminal, remains strong across all financial institution sectors, including banks and other depository institutions; securities brokers and dealers; money services businesses; and financial services industries. The Financial Crimes Enforcement Network (FinCEN), the U.S. government’s lead AML regulator, has also paid particular attention (both in regulatory guidance and in enforcement) to the nascent cryptocurrency industry and the unique illicit finance risks in that sector.
In addition to enforcement from the federal government, many individual states (especially New York) have commenced their own enforcement actions and investigations. And many enforcement actions and settlements involved multiple agencies in parallel/joint activities (for simultaneous resolution) or successive actions, subjecting financial institutions to multiple fines or other penalties for the same underlying conduct. Finally, with an aim to increase accountability and enhance deterrence, both civil and criminal enforcement agencies in the AML space have been willing to consider individual liability for corporate officers, directors, and employees who participate in the underlying violations.
To address the issues, certain (though not all) types of financial institutions are continuing to build out their systems and programs to comply with the Customer Due Diligence Rule, which went into effect on May 11, 2018. Among other things, this Rule requires financial institutions to determine the beneficial owners of legal entity customers.
In late 2018, the U.S. Department of the Treasury issued various documents and advisories related to money laundering/illicit finance risks, including the National Money Laundering Risk Assessment, the National Terror Finance Risk Assessment, and the National Proliferation Finance Risk Assessment.
Most recently, in September 2019, FinCEN announced the creation of a new division, the Global Investigations Division, “responsible for implementing targeted investigation strategies” and especially focusing on foreign money laundering and terror finance threats. This new initiative, (which replaces FinCEN’s Office of Special Measures) suggests greater emphasis for FinCEN’s use of its Section 311 authority and other unique authorities, and may signal more frequent use of FinCEN’s actions to designate individuals, entities, and jurisdictions as areas of “primary money laundering concern.”
