David Cohen, undersecretary for terrorism and financial intelligence, announced last week a federal task force of regulators and enforcement agencies has been created to “look under the hood and take stock” of the entire U.S. anti-money laundering regime. According to a Treasury Department spokesman, in the next year “we expect the task force to examine the overall AML regulatory, compliance and enforcement effort, and to develop ideas on how those efforts can even more effectively combat money laundering and other forms of financial crime.”
So, let’s get the ball rolling AML geeks. If there’s one thing you could change or clarify, what would it be?
Betty Santangelo, litigation partner at Schulte Roth & Zabel LLP. [The task force] is a great idea and comes at the right time, given all that Treasury has learned from the recent round of hearings on the [advanced notice of proposed rulemaking] on customer due diligence, and the appointment of a new director of FinCEN. For example, presently firms are required to sign reliance agreements with other regulated financial institutions in order to rely on their anti-money laundering procedures for shared customers. In my view, spending time on that documentation appears unnecessary given that the other institution is a regulated financial institution subject to the same AML regulations. That is one area that could potentially be made unnecessary, and permit financial institutions to focus on monitoring activity.
Michael Dawson, managing director at Promontory Financial Group. Regulators should approach AML risk management more like credit risk management, by testing programs for effective outcomes, not prescribed inputs. For example, banks must risk rate customers. Currently, regulators effectively list the factors that must be considered high-risk. In the credit context, banks have more freedom to choose the factors they consider high risk (provided they don’t use prohibited factors like race). By focusing on effective outcomes, rather than prescribed inputs, AML resources could be more efficiently targeted at the real problems.
and many more…
Detailed news link: click here