The National Law Review, August 22, 2014
The Financial Crimes Enforcement Network (FinCEN) has issued separate advisories relating to (1) anti-money laundering (AML) and counter-terrorist financing (CTF) deficiencies and (2) promoting a culture of compliance with Bank Secrecy Act (BSA) and AML obligations. On August 5, FinCEN issued Advisory FIN-2014-A006 to notify US financial institutions of updates to Financial Action Task Force (FATF)-identified jurisdictions with AML/CFT deficiencies. FATF maintains two lists of jurisdictions with AML/CTF deficiencies: (1) jurisdictions that are subject to FATF’s call for countermeasures or that are subject to enhanced due diligence and (2) jurisdictions identified by FATF to have AML/CTF deficiencies for which they have developed action plans with FATF. FinCEN provided the updated lists and encouraged financial institutions to consider the changes to these lists when reviewing obligations and risk-based approaches with respect to these jurisdictions.
On August 11, FinCEN issued Advisory FIN-2014-A007 to US financial institutions on promoting a culture of compliance. The advisory highlights the importance of a strong culture of BSA/AML compliance for senior management, leadership and owners of all financial institutions subject to FinCEN regulations. FinCEN stated that a financial institution can strengthen its BSA/AML compliance culture by ensuring that (1) its leadership actively supports and understands compliance efforts, (2) compliance is not compromised by revenue interests, (3) relevant information throughout the organization is shared with compliance staff, (4) adequate resources are dedicated to compliance functions, (5) the compliance program is effective by, among other things, ensuring that it is tested by an independent and competent party and (6) its leadership and staff understand the purpose of BSA/AML efforts and how reporting is used. FinCEN stated the advisory does not change any existing expectations or obligations under BSA/AML requirements.
Commodity Futures Trading Commission Regulation 42.2 requires futures commission merchants (FCMs) and introducing brokers (IBs) to comply with, inter alia, applicable provisions of the BSA and implementing regulations. National Futures Association has advised member FCMs and IBs to review both FinCEN advisories.
FinCEN Advisory FIN-2014-A006 is available here.
FinCEN Advisory FIN-2014-A007 is available here.
NFA Notice I-14-19 is available here.