US anti-money laundering: Hot topics for 2019
15 Jan 2019

After a tumultuous 2018, which saw some eye-watering penalties, the rollout of new privacy laws and Europe’s ‘biggest banking scandal,’ anti-money laundering compliance officers may be ready for a fresh start.

But regulatory expectations, the promise of fintech solutions and money laundering issues linked to ongoing political corruption scandals, are set to loom large for bank compliance teams over the next 12 months, United States-based experts said to KYC360.

New AML rules – beneficial ownership, CDD

Among the biggest challenges for American banks will be navigating their first round of regulatory examinations since the finalisation of the U.S. Treasury Department’s customer due diligence rules, according to Alma Angotti, a managing director at Navigant Consulting.

The department’s Financial Crimes Enforcement Network (FinCEN) finalised its long-awaited anti-money laundering (AML) rule in May, requiring banks, credit unions and other financial institutions to identify individuals who own 25 percent or more of the corporate entities they provide services to as well as one individual who wields significant control of that client.

“A lot of banks thought of it as a documentation exercise, but if you read the rule, you have to do two things, really, besides obtaining ownership: create a customer profile based on risk and you have to use it,” said Angotti.

But some compliance teams may overly focus on identifying individual owners while neglecting to act on the data they obtain, she said.

In guidance published in April, FinCEN characterized use of beneficial ownership data as an “essential” factor in determining whether transactions merit filing suspicious activity reports, or SARs.

Unusual wire transactions or deposits made in a given month, among other activity, could require financial institutions to update their beneficial ownership records, the bureau said.

“You’re not just collecting information,” said Angotti. “You’re creating a risk-based customer profile and then you have to use that to identify anomalies and activity outside of that customer profile.”

Link to the full article.

Read more:

Money laundering: Ex-Credit Suisse bankers arrested over $2 billion-loan fraud scheme

UK: HMRC announces Top 10 prosecutions of 2018

Barclays fined $15 million in US over whistleblowing scandal

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