US regulator plans major refresh for AML laws

The US Financial Crimes Enforcement Network (FinCEN) is calling for input on a series of anti-money laundering (AML) changes.

FinCEN is preparing changes to the Bank Secrecy Act

The advanced notice of proposed rulemaking (ANPRM) concerns regulatory amendments to the Bank Secrecy Act (BSA).

FinCEN says it has undertaken an initiative with law enforcement to “collectively re-examine” the BSA’s framework. The regulator has also looked into “the broader national AML regime”.

It says “significant innovations” in the financial sector have made things difficult for firms to meet BSA compliance requirements.

As such, FinCEN plans to focus in on the definitions and requirements of “an effective and reasonably designed” AML programme.

“Increasing the ‘effectiveness’ of the national AML regime is a core objective of recent AML modernisation efforts,” says FinCEN.

“This term often refers to the implementation and maintenance of a compliant AML program, but has no specific, consistent definition in existing regulation.

FinCEN says its reasonably designed programme would allow financial institutions to “more efficiently allocate resources and would impose minimal additional burden on existing AML programmes”.

Significant changes

It says that the amendments are intended to “address the evolving threats of illicit finance”. The regulator adds it wants to provide FIs with a “greater flexibility in the allocation of resources.”

FinCEN states that money laundering and terrorist financing have “changed significantly” in impact since the initial passing of the BSA.

The regulator has taken recommendations from the Anti-Money Laundering Effectiveness Working Group, a group composed of state and federal enforcement agencies, banks, and trade groups.

FinCEN’s most recent significant change to BSA regulations was the implementation of customer due diligence and beneficial ownership requirements in 2016.

This resulted in the incorporation of minimum standards for customer due diligence and the collection of beneficial ownership information.