The Department of Justice and the Treasury Department (FINCEN and OFAC) have been increasing enforcement of anti-money laundering laws. The Justice Department brought significant cases against ING Bank and other foreign banks for violating sanctions against Iran, Cuba and other countries. Now, it is focusing on a number of cases under the Bank Secrecy Act (“BSA”) which target financial institutions for weak internal control systems designed to catch potential money launderers. As part of this new initiative, the Justice Department has identified a range of “financial institutions” for scrutiny, including commercial banks and credit unions, insurance companies, pay-check services, casinos and pawnbrokers. In the summer of 2012, the Justice Department brought significant money laundering cases against check-cashing businesses in Brooklyn, Philadelphia and Los Angeles for failing to file transaction reports and deficiencies in their anti-money laundering programs.
The Justice Department’s aggressive approach indicates a new standard and startegy which goes beyond that normally required by bank and other financial institution regulatory agencies. The implications of this new strategy are significant and raises serious risks of enforcement actions.
At the same time, bank regulators are turning up the heat on money laundering compliance. FINCEN has proposed to require banks and other financial institutions to identify and confirm the beneficial owners of an account – an inquiry which can require layer after layer of investigation and due diligence. This controversial new regulatory requirement could have a major impact on all financial institutions.
In a recent survey, approximately one-half of AML compliance personnel have identified increased regulatory expectations as a significant compliance challenge. AML compliance professionals cited needs for greater AML compliance personnel and resources in order to meet regulators’ expectations.
Join Michael Volkov and Carlos Ortiz as they review current anti-money laudnering enforcement trends. They will review and outline the current trends, and will recommend proactive steps companies can take to prevent prosecutions and regulatory enforcement actions.
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