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The AMLA promises to be a highly effective and flexible framework for detecting, preventing and prosecuting future forms of illicit financing in the 21st century
A third set of provisions would enhance regulatory efficiency and effectiveness and uniform regulatory expectations through a no-action letter process based on a review by FinCEN’s director and stakeholders’ counseling. In a no-action letter, agency staff state that they will not recommend an enforcement action to their commission if a company undertakes a contemplated transaction or a new compliance practice. No-action letters are an important means of mitigating compliance risk. The Securities and Exchange Commission and the Commodity Futures Trading Commission have an established and well-regarded no-action letter process that has become a key means of conveying regulatory and compliance expectations.
Conclusion
It will take several years before the AMLA is fully implemented. Certain rulemakings require extensive studies, consultation with stakeholders and regulatory reviews before they are finalized. Newly created offices need to be established and experienced AML/CTF officials hired. Nevertheless, by requiring FinCEN, LEAs, federal agencies, state agencies and the private sector to engage in continuous feedback, communication as well as coordination and training in national strategic priorities, the AMLA promises to be a highly effective and flexible framework for detecting, preventing and prosecuting future forms of illicit financing in the 21st century.
Alexander Dill, lecturer in law, UCLA School of Law, CA, USA, dill@law.ucla.edu17
1 “H.R. 6395 - National Defense Authorization Act for Fiscal Year 2021,” Congress.gov, https://www.congress.
gov/bill/116th-congress/house-bill/6395
2 “Compliance and the compliance function in banks,” Basel Committee on Banking Supervision, April 2005, https://www.bis.org/publ/bcbs113.pdf
3 “Financial institutions are spending private compliance funds for a public and private benefit, including protecting the United States financial system from illicit finance risks.” Anti-money laundering programs, § 6101(b)(2)(B).
4 Specifically, the AMLA retains paragraph (a) and rescinds paragraphs (b) through (j) of 31 C.F.R. § 1010.230.
5 James D. Aramanda, “Rodge Cohen: The Banking Industry’s Counsel for over 40 Years,” The Clearing House, Bank Policy Institute, https://www.theclearinghouse.org/banking-perspectives/2016/2016-q4-banking- perspectives/articles/state-of-banking-rodgin-cohen
6 § 6203. FinCEN must also to provide such feedback to relevant agencies.
7 § 6213. The collaborative arrangement is described in Interagency Statement on Sharing Bank Secrecy Act
Resources, issued by FinCEN and the federal banking agencies (October 3, 2018). 8 § 6214.
9 “Anti-money laundering and counter-terrorist financing measures, United States Mutual Evaluation Report,” Financial Action Task Force Asia/Pacific Group on Money Laundering, December 2016, https://www. fatf-gafi.org/media/fatf/documents/reports/mer4/MER-United-States-2016.pdf
10 “Anti-Money Laundering Program Effectiveness, A Proposed Rule by the Financial Crimes Enforcement Network,” Federal Register, September 17, 2020, https://www.federalregister.gov/documents/2020/ 09/17/2020-20527/anti-money-laundering-program-effectiveness
11 § 6107. 12 § 6101. 13 § 6307. 14 § 6216. 15 § 6504. 16 § 6204.
17 Alexander Dill, Anti-Money Laundering Regulation and Compliance: Key Problems and Practice Areas (Edward Elgar, June 2021).
[ REGULATORY INITIATIVES ]
A second focus of the AMLA is to streamline the reporting regime. Treasury must consider the burdens imposed by SARs, the reports’ efficiency in achieving their purpose and their benefits for LEAs and the intelligence community. The AMLA directs Treasury to establish streamlined SARs that permit filing noncomplex information while not diminishing their law enforcement usefulness. Treasury must also consider tighter system integration between FinCEN and the private sector to allow for automatic population of report fields and automatic submission of transaction data for suspicious transactions.
In addition, the Government Accounting Office must conduct a study on the effectiveness of the CTR reporting regime, analyze CTRs’ importance to law enforcement, and assess the pros and cons of raising the CTR threshold.15 In turn, Treasury must consult with the various agencies and propose changes to reduce unnecessary burdensome regulatory requirements. Such proposals could include different CTR thresholds and categories, CTR types and characteristics of the greatest value as well as changes that best support investigative priorities.16
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