FinCEN aims to strengthen US AML/CFT programmes

The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury has put forth a proposal to enact specific elements of the Anti-Money Laundering Act of 2020, which revised the Bank Secrecy Act (BSA) to enhance and update the U.S. anti-money laundering and terrorism financing regime.

The objectives outlined by FinCEN in the Proposed Rule issued on June 28, 2024, include reinforcing the risk-based approach already anticipated in AML/CFT programmes, enhancing the adaptability and responsiveness of these programmes to evolving threats, and ensuring their effectiveness in meeting the objectives of the BSA. The Proposed Rule also aims to shift the focus towards a more risk-based, creative, and results-driven approach.

It introduces a specific mandate for regulated financial institutions (FIs) to maintain an AML/CFT compliance programme that is “effective, risk-based, and appropriately structured” to enable FIs to allocate resources and attention in line with their risk profiles. Additionally, the Proposed Rule seeks to standardize AML/CFT programme requirements across various types of FIs, including banks, broker-dealers regulated by the SEC, futures commission merchants, introducing brokers in commodities regulated by the CFTC, and money services businesses.

FinCEN recognizes that some of the requirements outlined in the Proposed Rule are already established expectations, such as the need for certain FIs to uphold risk-based policies and conduct periodic risk assessments, and aims to streamline these requirements across FIs where applicable. Therefore, while the impact of the changes proposed in the Rule may differ based on the institution type and the complexity of its existing AML/CFT compliance programme, it is not anticipated that the Final Rule, if implemented, will place significantly new or burdensome obligations on regulated FIs.

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