By Brian Monroe
July 14 , 2021
The future of financial crime has “effective” compliance teams generating “highly useful” and “relevant” intelligence for investigators in focused, shifting defined “priority areas,” both broad generators of illicit income, like corruption and cyber-enabled fraud, but also attuned to the actions and reactions of international threat actor groups.
Those are just some of the key takeaways from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) releasing the formal list of its national anti-money laundering and countering the financing of terrorism (AML/CFT) priorities, a collection of historic foils like organized criminal groups and other rising risks, like record ransomware attacks and crypto-fueled paydays.
The widely-watched and highly anticipated AML priorities are the first concrete update to implement the U.S. Anti-Money Laundering Act (AML Act) – the most significant upgrade to the country’s fincrime framework since the 2001 U.S.A. Patriot Act.
The AMLA is an expansive package of updates to break open beneficial ownership bastions, bolster public-private information sharing, usher in a new era of innovation and focus on effectiveness – with the threat of higher penalties for violations, and serial scofflaws.
To read ACFCS coverage of the AML Act, which Congress enacted into law in January after overriding a presidential veto, click here.
Coinciding with and underpinning the release of FinCEN’s AML priorities, the Wolfsberg Group issued a critical missive to detail in practical, tactical steps how financial institutions can actually demonstrate effectiveness, a term in recent years bandied about with much fanfare, but little in the way of bright-line, auditable boundaries.
In short, the Wolfsberg metrics of effectiveness include:
- Are you compliant with local AML laws, cognizant of global standards?
- Are you producing highly useful information to law enforcement, guided by national AML priorities?
- Do you have a reasonable compliance program that reviews internal and external threats, gaps and vulnerabilities and adjusts based on rising or receding risks and law enforcement input?
To read the full statement by Wolfsberg Group, an influential alliance of more than a dozen of the world’s largest banks, including Citi, JPMorgan, Barclays, Credit Suisse and others, click here.
The FinCEN priorities, likely familiar drumbeats to large, international banks, are still given more weight and attention as they stand front and center at the new countercrime vanguard, the tip of the spear for fincrime fighters, not buried in dense and didactic reports, such as the Treasury’s 2020 Illicit Finance Strategy, the 2018 National Risk Assessment and others.
FinCEN’s stated AML priorities are:
- cybercrime, including relevant cybersecurity and virtual currency considerations;
- foreign and domestic terrorist financing;
- transnational criminal organization activity;
- drug trafficking organization activity;
- human trafficking and human smuggling; and
- proliferation financing
To read the full list of AML priorities and related interagency statements, click here.
Taken together, the priorities and metrics of effectiveness give a glimpse of the future of fighting financial crime.
A brighter tomorrow where banks won’t be as divided against themselves between complying with the letter of the law – the process, pomp and circumstance around the management of risk management to manage risks – and the spirit of the law: to stop illicit cabals of all stripes by choking their financial lifeblood.
“Really, for the first time in U.S. history, we have a set of AML priorities for the regime to focus on and a set of financial crime priorities to focus on,” said Craig Timm, a managing director and financial crimes compliance executive at Bank of America, in a social media posting.
“This is a really great achievement by FinCEN and the other agencies to get this accomplished.”