On September 16, 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued an advanced notice of rulemaking (“ANPRM”) requesting comments on proposed regulatory changes under the Bank Secrecy Act (“BSA”) that aim to enhance the effectiveness of anti-money laundering (“AML”) programs.  The proposals reflect the recommendations of a working group within the Bank Secrecy Act Advisory Group (“BSAAG”), whose membership includes representatives from financial institutions, federal and state regulatory and law enforcement agencies, and trade groups and is chaired by the director of FinCEN, that was convened to develop recommendations to strengthen the national AML regime.  Comments are due by November 16, 2020.

Proposed Amendments

FinCEN is seeking comment on whether it is appropriate to clearly define a requirement for an “effective and reasonably designed” AML program in BSA regulations.  As proposed in the ANPRM, regulatory amendments would explicitly define an “effective and reasonably designed” AML program as one that:

  • Identifies, assesses, and reasonably mitigates the risks resulting from illicit financial activity—including terrorist financing, money laundering, and other related financial crimes—consistent with both the financial institution’s risk profile and the risks communicated by relevant government authorities as national AML priorities;
  • Assures and monitors compliance with the recordkeeping and reporting requirements of the BSA; and
  • Provides information with a high degree of usefulness to government authorities consistent with both the institution’s risk assessment and the risks communicated by relevant government authorities as national AML priorities.

The ANPRM also seeks comment on whether the AML program regulations should be amended to establish an explicit requirement for a risk-assessment process, as well as whether the Director of FinCEN should issue, every two years, a list of national AML priorities.

These amendments, which would allow financial institutions greater flexibility in the allocation of their resources to establish an effective AML program, are likely welcomed by industry.  The window to submit comments on the proposals allows industry the opportunity to provide the agency with additional insight into resource considerations and other decision-making that informs the effectiveness of an AML program, along with innovations in the financial sector.

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Photo of Caroline Brown Caroline Brown

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to…

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to clients on national security matters, including anti-money laundering (AML) and economic sanctions compliance and enforcement challenges, investigations, and cross border transactions, including review by the Committee on Foreign Investment in the United States (CFIUS) and the Committee on Foreign Investment in the U.S. Telecommunications Services Sector (Team Telecom).

Caroline brings over a decade of experience as a national security attorney at the U.S. Departments of Justice and the Treasury. At the U.S. Department of Justice’s National Security Division, she worked on counterespionage, cybersecurity, and counterterrorism matters and investigations, and gained unique insight into issues surrounding data privacy and cybersecurity. In that role, she also sat on both CFIUS and Team Telecom and made recommendations to DOJ senior leadership regarding whether to mitigate, block, or allow transactions under review by those interagency committees. She also negotiated, drafted, and reviewed mitigation agreements, monitored companies’ compliance with those agreements, and coordinated and supervised investigations of breaches of those agreements.

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Photo of Carlton Greene Carlton Greene

Carlton Greene is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s International Trade and White Collar & Regulatory Enforcement groups. He provides strategic advice to clients on U.S. economic sanctions, Bank Secrecy Act and anti-money laundering…

Carlton Greene is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s International Trade and White Collar & Regulatory Enforcement groups. He provides strategic advice to clients on U.S. economic sanctions, Bank Secrecy Act and anti-money laundering (AML) laws and regulations, export controls, and anti-corruption/anti-bribery laws and regulations. Carlton is the former chief counsel at FinCEN (the Financial Crimes Enforcement Network), the U.S. AML regulator responsible for administering the Bank Secrecy Act.

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