US| The Financial Crimes Enforcement Network (FinCEN) proposes reform that would modernize and harmonize FinCEN’s anti-money laundering and countering the financing of terrorism (AMLCFT) program rules across covered financial institutions by codifying a risk-based, effectiveness-focused program standard, expressly tying AMLCFT programs to FinCEN’s national AMLCFT priorities, and clarifying supervisory and enforcement expectations so that institutions can allocate more attention and resources to higher-risk customers, products, and activities rather than low‑risk, check-the-box tasks.
Some Key Items:
- Introduction of a new consultation and coordination framework under which federal banking agencies must notify and consult FinCEN before taking significant AMLCFT supervisory actions against banks, with the goal of improving consistency and aligning enforcement with program effectiveness and national security objectives.
- Expansion and clarification of minimum AMLCFT program components, including a documented risk assessment process, risk-based internal controls, a U.S.-based responsible AMLCFT officer, independent testing, and ongoing training, applied consistently across multiple financial institution types.
- Formal incorporation of FinCEN’s periodically updated AMLCFT Priorities into program design and supervision, requiring institutions to consider national priorities within their risk assessment and ongoing program implementation.
- Shift in supervisory and enforcement focus toward “effective, risk-based, and reasonably designed” programs and away from isolated, technical deficiencies, including limits on actions absent significant or systemic implementation failures for banks.
- Clarification that the duty to establish, maintain, and enforce AMLCFT programs must reside with persons located in the United States who are accessible to FinCEN and the appropriate Federal functional regulator, while still allowing use of overseas operations and service providers.