Maintaining effectiveness of anti-money laundering programs to be gauged under FinCEN proposal

An “effective and reasonably designed” anti-money laundering program must be maintained by all financial institutions subject to an anti-money laundering (AML) program, the Treasury’s financial law-enforcement arm said Wednesday in seeking public comment on amendments to its rules.

The Treasury’s Financial Crimes Enforcement Network (FinCEN) indicated in an advance notice of proposed rulemaking that it is considering amendments to its AML rules about their design. FinCEN stated that the amendments under consideration “are intended to modernize the regulatory regime to address the evolving threats of illicit finance, and provide financial institutions with greater flexibility in the allocation of resources, resulting in the enhanced effectiveness and efficiency of anti-money laundering programs.”

Specifically, FinCEN said its proposed amendments would clarify that an “effective and reasonably designed” AML program would assess and manage risk according to the institution’s own risk assessment process; provide for compliance with BSA requirements; and provide for the reporting of information with a high degree of usefulness to government authorities.

The agency said its proposal would also create a mechanism to establish a set of national law enforcement priorities to help guide financial institutions with their risk assessments and resource allocation.

FinCEN is also seeking input on whether to impose an explicit requirement for a risk assessment process and whether FinCEN’s director should issue a list of national AML priorities every two years.

Comments will be due 60 days after publication in the Federal Register.

Advance notice of proposed rulemaking (ANPRM): Anti-Money Laundering Program Effectiveness