Reported by Brett Wolf 

The anti-money laundering unit of the United States Treasury Department recently began a long-delayed rulemaking process to “strengthen and modernize” financial institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) programs by issuing a proposal which, among other things, would make risk assessments mandatory and require integration of national AML/CFT priorities.

Creating a more “effective and risk-based” regulatory regime

The Treasury’s fact sheet stated that the proposed rule would:

• amend the existing program rules to explicitly require financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs with certain minimum components, including a mandatory risk assessment process;
• require financial institutions to review government-wide AML/CFT priorities and incorporate them, as appropriate, into risk-based programs, as well as provide for certain technical changes to program requirements;
• promote clarity and consistency across FinCEN’s program rules for different types of financial institutions; and
• articulate certain broader considerations for an effective and risk-based AML/CFT framework as envisioned by the AML Act.

Notably, the Treasury official added that the proposal includes a provision that would require financial institutions to consider BSA filings they have made, such as suspicious activity reports (SARs) and currency transaction reports, as part of their risk assessment processes.

Read full report: https://www.thomsonreuters.com/en-us/posts/government/anti-laundering-modernization-rule/