By PAUL O’DONOGHUE, Senior Correspondent
FINANCIAL crime experts have reacted with caution to new FinCEN guidance encouraging U.S. banks to share intelligence data, with some even dismissing the call as ‘meaningless’.
Last week, FINCEN, the AML unit of the U.S. Treasury, issued a new guide for U.S. financial institutions encouraging “voluntary” information sharing.
However, Jim Richards, the CEO of anti-financial crime firm RegTech Consulting, said the guidance is “full of sneaky lawyer language”.
He noted that the new FinCEN guidance said: “This guidance does not alter or amend any existing legal obligations under the BSA . Or other statutes or regulations. And does not impose any new regulatory requirements or supervisory expectations.”
Richards said: “That’s lawyerese for ‘This guidance is meaningless. Whatever you do, do not rely on it. Because it is unreliable.’
The FinCEN guidance indicated that U.S. financial institutions could share data with foreign lenders under certain circumstances.
These included customer details, such as beneficial ownership information. It also said U.S. firms could share records of “cash deposits, withdrawals [and] transfers”.
Sarah Beth Felix, the CEO of Palmera Consulting, also said U.S. banks should “tread lightly” regarding the FinCEN guidance.
“If your FI plans on using this – policies, procedures, and tracking forms should be part of this before any information is shared,” she said.
Richards also noted that FinCEN had planned to implement a cross-border SAR (Suspicious Activity Report) sharing pilot. However, the project has not progressed.
“So rather than implement the cross-border SAR sharing pilot, FinCEN comes up with this squishy, unenforceable cross-border SAR sharing guidance,” he said.
“Rulemaking is hard, timely, and costly. But it results in good, enforceable rules. Guidance is easy, and results in unenforceable lawyer gibberish.”
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