Natasha Vernier’s Post

✔️Effective ✔️Risk-Based ✔️Reasonably Designed Does your AML/CFT program check these boxes? The proposed amendments are based on changes enacted by the Anti-Money Laundering (AML) Act of 2020 (AML Act) and are a key component of Treasury’s objective of a more effective and risk-based AML/CFT regulatory and supervisory regime. As Natasha Vernier shared FinCEN’s fact sheet explains a general overview of the key elements of a more effective program.

Still getting through FinCEN's proposed rule to Strengthen & Modernize Financial Institutions' AML/CFT Programs (it is 178 pages). Of note, the requirement for institutions to ensure that their program is not only risk-based and reasonably designed, but also effective and in-line with national AML/CFT priorities will be new for some. The word "effective*" is used 181 times in the document. And for innovative software providers like us and those looking to adopt/pilot new approaches, "innovation" is used 34 times (and is strongly supported throughout!). Also, performing risk assessments becomes a strict regulatory requirement (though you should already be doing it); with the requirement as part of your risk assessments to consider FinCEN's national priorities and to apply resources accordingly. And in their own words: "FinCEN, in consultation with the appropriate Federal functional regulators, intends for these updates to: (1) reinforce the risk-based approach for AML/CFT programs; (2) make AML/CFT programs more dynamic and responsive to evolving ML/TF risks; (3) ultimately render AML/CFT programs more effective in achieving the purposes of the BSA; and (4) reinforce the focus of AML/CFT programs toward a more risk-based, innovative, and outcomes-oriented approach to combating illicit finance activity risks and safeguarding national security, as opposed to public perceptions that such programs are focused on mere technical compliance with the requirements of the BSA." https://lnkd.in/eab-3PqY

FINCEN proposes significant new AML guidance and requirements. Document is 172 pages. Individual financial institutions should evaluate the potential impact on their organizations and provide formal comments as appropriate. https://lnkd.in/gaK7xQX9

Check out our latest Client Update on FinCEN's proposed amendments to its AML/CFT program rule! While many of FinCEN's changes are cosmetic, the new requirement to establish a risk assessment process (and inevitable downstream impacts) could prove challenging.

Pretty damning letter by the Financial Conduct Authority yesterday addressed to the CEO's of Annex 1 firms. In the letter, the FCA highlighted that these firms commonly: ❌Have poor financial crime controls that have not been updated as they have scaled 🕵️♂️Have failed to understand the money laundering risks they face 📉Have insufficient resourcing and oversight of financial crime issues and requirements. Annex 1 firms are now under a lot of pressure to identify and resolve shortfalls in their AML frameworks within the next 6 months. Get in touch to learn more about how ComplyCube has helped Annex 1 firms address these issues and avoid regulatory action.

"It may be a big lift for advisors to have an AML program, honestly, it is about time it is a requirement." Our chief compliance officer, Stacy Sizemore, IACCP®, is in favor of the new anti-money laundering rule proposed by FinCEN earlier this week. The new rule would require certain advisors to implement AML programs and report any suspicious activity in efforts to increase transparency and help regulators identify illicit proceeds in the US economy. Rest assured, Stacy and her team are committed to ensuring that tru's Community of RIAs remain compliant and at the forefront of new legislation. To hear more insights from Stacy, and the impact of this new rule on advisors, read here from Gregg Greenberg for InvestmentNews:

"It may be a big lift for advisors to have an AML program, honestly, it is about time it is a requirement."  Our chief compliance officer, Stacy Sizemore, IACCP®, is in favor of the new anti-money laundering rule proposed by FinCEN earlier this week. The new rule would require certain advisors to implement AML programs and report any suspicious activity in efforts to increase transparency and help regulators identify illicit proceeds in the US economy.  To learn more from Stacy, and the impact of this new rule on advisors, read here from Gregg Greenberg for InvestmentNews: https://lnkd.in/gWv9BgmR

FinCEN's proposed rule aims to heighten compliance standards for financial institutions' AML/CFT programs. It mandates risk assessments, board oversight, and U.S.-based administration. While aiming for uniformity and strength, it could escalate compliance costs and enforcement risks. Public comments are open until September 3, 2024, as part of broader efforts to implement the Anti-Money Laundering Act of 2020.

What is the purpose of the purpose statement? To me this is the key question left unanswered by FinCEN’s AML Program NPRM. Here’s why… The proposed rule would establish a new statement describing the purpose of an AML/CFT program as one that: (1) Complies with the BSA and regulations; (2) Focuses attention and resources in a manner that’s consistent with the risk profile of the institution; (3) May include consideration and evaluation of innovative approaches; (4) Provides highly useful reports to relevant government authorities; (5) Protects the U.S. financial system from criminal abuse; and (6) Safeguards U.S. national security, including by preventing the flow of illicit funds in the financial system. To me, this is a pretty darn good definition! If these were the standards by which AML programs were evaluated, it has the potential to completely reorient programs around outcomes and finally drive a truly risk-risk based approach. First, FinCEN could establish these as the AML program requirements. Then, FinCEN could develop metrics to help assess progress against the requirements. For anything that does not help achieve one of these requirements, FinCEN and the federal regulators could issue guidance saying firms are free to immediately stop doing it and reallocate those resources to more effective use. That’s a BIG, GREAT change! But the NPRM doesn’t go this far. In fact, it doesn’t say what the purpose of the purpose statement is. On the one hand, FinCEN says the NPRM is designed to create a more “risk-based, innovative, and outcome oriented approach.” On the other hand, there are comments throughout the NPRM that say the proposed rule doesn’t change much, that for some institutions it won’t be a big change, and the cost to implement will only be $2,500 for large institutions and $800 for small ones. It just doesn’t make sense to me. And that’s why this comment period is so important. FinCEN needs to hear from us! Realistically, this is probably our one chance for a generation or more to make the changes that we all want to better fight financial crime and make the U.S. a safer place. But that’s just my two cents. What do you think? #aml #fincen

💵 🚔 Financial Compliance News! Late last month, the Financial Crimes Enforcement Network, US Treasury (#FinCEN) proposed a series of new rules to strengthen and modernize #AML and #CFT programs across the financial industry, impacting banks, broker-dealers, insurance companies, investment firms, and others.   If approved, the new rules will require firms to: 👉 Incorporate a risk assessment into their AML/CFT programs that addresses a list of priorities published by FinCEN 👉 Ensure their risk assessments analyze #risks inherent to their business activities, including products, services, customers, intermediaries, and geographic locations 👉 Review all relevant Bank Secrecy Act reports such as Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) 👉 Thoroughly document their AML/CFT programs   🔎 The future of these proposals, which are under public review, remains uncertain following a recent US Supreme Court decision paring back government agencies' regulatory powers. Follow us here to stay up to date on #regulatory news!   #finance #kyc #moneylaundering #investmentnews #compliance