United States

Topic: Money laundering

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FinCEN finalizes AML requirements for certain banks; asks for comments on possible rulemaking on AML compliance programs

On September 15, 2020, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, published a final rule that completes the circle of all banking organizations being treated the same for purposes of AML compliance requirements for banks. The final rule covers banks that do not have a Federal functional regulator, such as … Continue Reading

FATF report – virtual assets red flag indicators of money laundering and terrorist financing

On 14 September 2020, the Financial Action Task Force (FATF) published a report, Virtual Assets – Red Flag Indicators of Money Laundering and Terrorist Financing. The report is based on more than 100 case studies and is designed to help national authorities and financial institutions identify potential money laundering and terrorist financing activity involving virtual … Continue Reading

SWIFT publishes “Follow the Money” report to aid comprehension of money laundering risks underpinning large-scale cyber-heists

In September 2020, SWIFT (a global member-owned cooperative and provider of secure financial messaging services) published a report to support market participants in understanding the money laundering techniques which underpin large-scale cyber-attacks. The report sets out the end-to-end journey commonly used by criminals to launder funds obtained through illicit cyber-crime related activities, and focusses on … Continue Reading

US banking agencies and FinCEN issue statements regarding AML enforcement

Last month the US federal banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, and the National Credit Union Administration, collectively, the “US banking regulators”) and the Financial Crimes Enforcement Network (“FinCEN”) the US anti-money laundering (“AML”) agency, issued statements providing guidance on their … Continue Reading

Publication of Wolfsberg Group statement on developing an effective AML/CTF programme

On 12 August 2020, the Wolfsberg Group published its statement on developing an effective anti-money laundering (AML) / counter-terrorism financing (CTF) programme. In December 2019, the Wolfsberg Group published a statement on effectiveness which encourages jurisdictions to adopt the Financial Action Task Force’s focus on effective outcomes. As part of that statement, the Wolfsberg Group … Continue Reading

Wolsfsberg Group publishes new AML guidance to support source of wealth and source of funds due diligence

On 7 August 2020, the Wolfsberg Group, published new guidance targeted at private banking and wealth management divisions within financial institutions (FIs) to support the undertaking of source of wealth (SoW) and source of funds (SoF) checks. Based on the principles of the application of a risk-based approach (RBA), different customers will require a different … Continue Reading

FATF reports on stablecoins and virtual assets

On 7 July 2020, the Financial Action Task Force (FATF) issued a report to G20 Finance Ministers and Central Bank Governors regarding stablecoins. The June 2019 revisions to the FATF Standards place anti-money laundering and counter-terrorism financing (AML/CFT) requirements on virtual assets and virtual asset service providers (VASPs). The FATF report finds that stablecoins share … Continue Reading

Global anti-money laundering and sanctions compliance survey

An increasingly globalised business environment, together with technological innovation, political uncertainty and ongoing regulatory change, present a number of challenges for financial institutions when it comes to protecting themselves against financial crime. Our global anti-money laundering and sanctions compliance survey will explore how financial institutions across the globe are managing their compliance programs in light of the … Continue Reading

Three US Agencies issue joint statement on activities involving digital assets

On October 11, 2019, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, along with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) (collectively, the “Agencies”) issued a joint statement on digital assets activities (“Statement”), reminding the businesses under their jurisdictions that digital assets activities may be … Continue Reading

FinCEN issues advisory and guidance on virtual currency

On May 9, 2019, the Financial Crimes Enforcement Network (FinCEN), the U.S. anti-money laundering (AML) agency, announced issuance of both Guidance and an Advisory on how transactions involving convertible virtual currencies (CVCs) would be subject to FinCEN’s money services business (MSB) regulations. FinCEN characterized the Guidance as a consolidation of its regulations, previous guidance and … Continue Reading

FinCEN fines peer-to-peer virtual currency exchanger for AML violations

On April 18, 2019, the U.S. anti-money laundering (“AML”) agency, the Financial Crimes Enforcement Network (“FinCEN”), announced that it had assessed a civil money penalty of $35,350 against Eric Powers of Kern County, California, for acting as an unregistered money services (“MSB”) business. Mr. Powers also agreed to cease engaging in any activity that might … Continue Reading

Broker-dealers can continue to rely on investment advisers for customer KYC requirements

In a December 12, 2018, letter to a US trade association with members that include broker-dealers in securities (“broker-dealers”), the US Securities and Exchange Commission (“SEC”) extended its no-action relief to broker-dealers who wish to rely on investment advisers to perform the broker-dealer’s obligations under US federal anti-money laundering (“AML”) customer identification program and beneficial … Continue Reading

Banking agencies and FinCEN encourage innovative efforts by banks to combat money laundering and terrorist financing

On December 3, 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Financial Crimes Enforcement Network (“FinCEN”), (collectively, the “Agencies”) issued a joint statement (“Joint Statement”) urging banks to consider, evaluate and potentially implement … Continue Reading

Iranian sanctions re-imposed and in full effect

As of November 5, 2018, all of the US sanctions that were lifted or waived in connection with the Joint Comprehensive Plan of Action (JCPOA), the 2016 nuclear deal among the United States and its allies and Iran, have been re-imposed and are in full effect. As a result, non-US companies can be subject to … Continue Reading

More guidance on the new FinCEN “beneficial ownership” rule

In May 2016, the Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, issued a final rule requiring that certain categories of financial institutions identify the beneficial owners of their legal entity customers and incorporate customer due diligence procedures into their required AML compliance programs. The regulation was effective … Continue Reading

FinCEN offers additional guidance on the “beneficial ownership rule”

In May 2016, the Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, issued a final rule requiring that certain categories of financial institutions identify the beneficial owners of their legal entity customers and incorporate customer due diligence procedures into their required AML compliance programs. The regulation was effective … Continue Reading

Coinbase ordered to give IRS information on 14,355 account holders

In an order dated November 28, 2017, a U.S. federal magistrate judge ordered cryptocurrency exchange Coinbase to turn over certain limited identifying information on 14,355 of their account holders to the U.S. Internal Revenue Service (IRS). This is the latest move in a case that began in 2016 when the IRS issued a so-called “John … Continue Reading

New York federal judge finds that bitcoins are “funds”

On September 19, 2016, a federal U.S. District Court judge in New York ruled in a pre-trial motion that bitcoins were “funds” for purposes of a federal indictment relating to illegal money transmitting business and money laundering. The decision comes less than two months after a Florida state criminal court judge found that bitcoin was … Continue Reading

United States bank regulators discuss their expectations regarding a bank’s correspondent banking activities

The U.S. banking regulators (the “Agencies”) recently issued a “fact sheet” discussing their supervisory expectations concerning banks’ anti-money laundering (AML) and economic sanctions obligations regarding the correspondent bank accounts they maintain for non-U.S. banks. Correspondent accounts, the accounts that banks maintain with each other to settle transactions and for other purposes, are vital to the … Continue Reading

Non-federally regulated banks to come under FinCEN’s AML umbrella

On August 25, 2016, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, issued a proposed rule that would extend US AML requirements for AML compliance programs to US banking entities that do not currently have a US federal bank regulator (which are the Federal Reserve Board, Federal Deposit Insurance Corporation and … Continue Reading

Putting management on the line: new New York AML/sanctions regulations look to senior management for written compliance finding

The New York State Department of Financial Services (“NY DFS”) recently finalized regulations (“Banking Regulations”) requiring state-chartered banking organizations, state-licensed branches and agencies of foreign banks, and state-licensed check cashers and money transmitters (“covered financial institutions”), to maintain “robust” transaction monitoring and filtering systems designed to better enable these financial institutions to comply with relevant … Continue Reading

Florida State criminal court judge finds that Bitcoin is not “money”

In a current money laundering prosecution in Miami, Florida, that has generated a lot of buzz in the press because it concerns Bitcoin, a Florida state trial judge ruled on July 22 that Bitcoin cannot be considered “money” under some of Florida’s state criminal laws. Given the particular facts of the case, however, it is … Continue Reading

FinCEN issues additional guidance on “beneficial ownership” rule

The Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, recently issued Frequently Asked Questions (FAQ) providing additional guidance on the final regulations that require that banking organizations, securities broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities (covered financial institutions) identify the beneficial owners of their … Continue Reading

NY DFS finalizes transaction monitoring regulations, tones down certification requirement

The New York State Department of Financial Services (“NY DFS”) recently issued final regulations to require state-chartered banking organizations, state-licensed branches and agencies of foreign banks, and state licensed check cashers and money transmitters (“covered institutions”), to put in place transaction monitoring and filtering systems designed to better enable these financial institutions to comply with … Continue Reading
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