FinCEN files 'a blessing in disguise' for law-reform advocates - AML Intelligence
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FinCEN files ‘a blessing in disguise’ for law-reform advocates

By Dan Byrne

American lawmakers are seizing on the FinCEN files controversy to push for more urgent AML law reform.

Following the news that high-profile, global banks – most with bases or headquarters in the US – have facilitated billions in laundered cash across the world, advocates for change are heaping pressure on US Congress to update the country’s rules around financial crime, Reuters reported Wednesday.

Some proponents hope for meaningful change by Christmas.

“The Buzzfeed story [FinCEN files] makes clear we need to strengthen, reform and update our nation’s anti-money laundering laws. This action is long overdue,” said Senator Sherrod Brown (D) of Ohio, who sits on the Senate Banking Committee.

The committee is currently scrutinising a ‘corporate transparency’ act surrounding money laundering, which will then face a vote in the Senate itself.

It passed the US House of Representatives in 2019 with almost universal support from Democrats and 25 Republicans, ensuring a comfortable majority in favour.

There is now broad support within the senate for this act also, Reuters reports. If passed, it will then be sent to the President to be signed into law.

Meanwhile, FinCEN itself has recently issued invitations for feedback to all relevant stakeholders – banks included – as part of a major upcoming overhaul of AML regulations.

It considers current regulations to lack the proper strengths. Institutions will regularly send too many suspicious action reports (SARs) or not enough, and authorities will struggle to deal with the volume of SARs that do come in.

Financial institutions have advised that they are spending billions in updating their AML processes to fall in line with the more stringent regulations.

NASDAQ recently announced a pilot programme using an AI system. It will automatically flag any suspicious transactions based on complex analysis of human behaviour – streamlining the process and allowing for work to be done in seconds that would have previously taken days.

With the FinCEN files scandal breaking from Sunday evening, much attention has fallen on the shortcomings of banks and authorities to act when they suspect they are handling laundered cash.

Interim executive director of the Financial Accountability and Corporate Transparency Coalition (FACT) Clark Gascoigne said that the story “is a major boost in ensuring that people understand how critical it is that we get to the bottom of who’s laundering money through our financial system.”

Even though the corporate transparency bill is awaiting Senate approval at present, its importance has been largely side-lined in the face of more pressing issues so far, Reuters reports.

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