FinCEN looking for violations of BSA laws, rules – less focused on noncompliance with standards, statement indicates

When it takes an enforcement action, the Treasury’s law enforcement arm for financial crimes says it will seek a violation of law based-laws and regulations – but noncompliance with standards outlined in guidance alone will not be treated as a law violation, the agency said Tuesday.

In its “Statement on Enforcement of the Bank Secrecy Act” (BSA), the Treasury’s Financial Crimes Enforcement Network (FinCEN) said it was describing its approach to enforcing the Bank Secrecy Act (BSA). The agency said it is the administrator of the BSA.

“When FinCEN takes an enforcement action, it will seek to establish a violation of law based on applicable statutes and regulations,” the agency wrote. “FinCEN will not treat noncompliance with a standard of conduct announced solely in a guidance document as itself a violation of law.”

It added that regulated parties will have an opportunity to respond to and contest factual findings or legal conclusions underlying any FinCEN enforcement action.

The agency statement also outlines six enforcement actions it has the power to take (which are: no action, warning letter, “equitable remedies” (an injunction or equitable relief to enforce compliance), settlements, civil money penalties (CMPs), or criminal referral.

It also lists 10 factors it considers when evaluating “an appropriate disposition upon identifying actual or possible violations” of anti-money laundering statutes when considering enforcement. Those include:

  • Pervasiveness of wrongdoing within an entity, including management’s complicity in, condoning or enabling of, or knowledge of the conduct underlying the violations.
  • Financial gain or other benefit resulting from, or attributable to, the violations.
  • Presence or absence of prompt, effective action to terminate the violations upon discovery, including self-initiated remedial measures.
  • Quality and extent of cooperation with FinCEN and other relevant agencies, including as to potential wrongdoing by its directors, officers, employees, agents, and counterparties.

Financial Crimes Enforcement Network (FinCEN) Statement on Enforcement of the Bank Secrecy Act

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