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Financial Services Law Insights and Observations

House passes NDAA with significant AML/CFT provisions

Federal Issues Financial Crimes Anti-Money Laundering Bank Secrecy Act Combating the Financing of Terrorism Virtual Currency SARs Of Interest to Non-US Persons U.S. House Federal Legislation

Federal Issues

On December 8, the U.S. House of Representatives passed the National Defense Authorization Act (NDAA) for Fiscal Year 2021 in a 335-78 vote, which includes significant language from the September 2019 proposed legislation, the “Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act,” among other proposed laws. Highlights of the anti-money laundering (AML) provisions include:

  • Establishing federal disclosure requirements of beneficial ownership information, including a requirement that reporting companies submit, at the time of formation and within a year of any change, their beneficial owner(s) to a “secure, nonpublic database at FinCEN”;
  • Expand the declaration of purpose of the Bank Secrecy Act (BSA) and establish national examinations and supervision priorities;
  • Require streamlined, real-time reporting of Suspicious Activity Reports;
  • Establish a Subcommittee on Innovation and Technology within the Bank Secrecy Act Advisory Group to encourage and support technological innovation in the area of AML and countering the financing of terrorism and proliferation (CFT);
  • Expand the definition of financial institution under the BSA to include dealers in antiquities;
  • Require federal agencies to study the facilitation of money laundering and the financing of terrorism through the trade of works of art; and
  • Inclusion of digital currency in AML-CFT enforcement by, among other things, expanding the definition of financial institution under the BSA to include businesses engaged in the transmission of “currency, funds or value that substitutes for currency or funds.”