Year-End BSA/AML Happenings - WST

Just like Santa has had a busy month, so too have the financial regulators! During December, changes to the FFIEC BSA Examination Manual have been issued, a Notice of Proposed Rulemaking (NPRM) concerning beneficial ownership has been published, and a Request for Information has been posted seeking comments for changes to BSA regulations.

Below is a synopsis of these most recent publications:

FFIEC BSA Examination Manual

On Dec 1, 2021, the FFIEC issued updated sections to the BSA Examination Manual covering the following areas:

• Introduction – Customers
• Charities and Nonprofit Organizations
• Independent Automated Teller Machine Owners or Operators
• Politically Exposed Persons

The accompanying guidance reminds financial institutions that the updates should not be interpreted as new instructions or an increased focus on certain area, but rather are intended to provide additional transparency into the examination process, including risk-focused examinations.

These updates, along with others made earlier this year, are identified by a 2021 date on the FFIEC BSA/AML InfoBase.

You can read more about the changes, in the FFIEC press release.

FFIEC Press Release: https://www.ffiec.gov/press/pr120121.htm

NPRM Regarding Beneficial Ownership

On Dec 7, 2021, the Financial Crimes Enforcement Network (FinCEN) announced the issuance of this NPRM which would give the public the ability to comment on the proposed rule to implement the Corporate Transparency Act’s (CTA) beneficial ownership information reporting provisions. As refresher for you all – few jurisdictions in the United States require legal entities to disclose information about their beneficial owners or the persons forming them. As a result, and in an effort to strengthen the U.S. financial system from illicit use, the CTA was enacted as part of the Anti-Money Laundering Act of 2020 within the National Defense Authorization Act for Fiscal Year 2021 (Wow! That’s a mouthful!!!) The purpose of the CTA is to provide essential information to law enforcement regarding the ownership structure of legal entities and to prevent nefarious characters, including terrorists, from exploiting the U.S. financial system and hiding money or other property within the U.S.

The proposed rule describes who must file a report of beneficial ownership, what information must be reported, and when a report is due. The comment period for the NPRM is open until Feb 7, 2022. Additional proposed rules related to the CTA will be issued at later dates.

FinCEN Issues Proposed Rule for Beneficial Ownership Reporting to Counter Illicit Finance and Increase Transparency | FinCEN.gov https://www.fincen.gov/news/news-releases/fincen-issues-proposed-rule-beneficial-ownership-reporting-counter-illicit

Modernization of AML/CFT Regulations

On Dec 14, 2021, FinCEN also issued a request for information (RFI) seeking comments on ways to streamline, modernize, and update AML governance within the United States. This review will help FinCEN identify regulations and guidance that is outdated, redundant, or is no longer risk focused based in the current banking industry. The overall goal is to ensure BSA regulations and guidance continue to safeguard the U.S. financial system. All interested parties – that’s YOU – are encouraged to respond by Feb 14, 2022.

Federal Register :: Review of Bank Secrecy Act Regulations and Guidance https://www.federalregister.gov/documents/2021/12/15/2021-27081/review-of-bank-secrecy-act-regulations-and-guidance

Authored by: Joann Lang, CAMS, CIA, CCBP