Skip to main content
Menu Icon Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • FinCEN to issue second beneficial ownership NPRM later this year

    Financial Crimes

    On April 28, FinCEN acting Director Himamauli Das informed the House Financial Services Committee during a hearing on the oversight of the agency that FinCEN is currently developing a second notice of proposed rulemaking (NPRM) this year proposing “regulations governing access to beneficial ownership information by law enforcement, national security agencies, financial institutions and others.” The NPRM will be published this year and follows a previous proposal to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA), which addresses who must report beneficial ownership information, when to report it, and what information must be provided (covered by InfoBytes here). In his written testimony, Das stated the agency also plans to issue a third and final proposal revising the Customer Due Diligence (CDD) regulation for financial institutions “no later than one year after the effective date of the final reporting rule,” as required by the statute. “The CTA directs that the revisions should bring the CDD regulation into conformance with the beneficial ownership rules under the CTA and reduce unnecessary or duplicative requirements, among other things,” Das said. “We are considering all options as we develop the Access Rule NPRM, and look forward to receiving public comments on our proposal when it is issued.” Das also noted that FinCEN is currently developing the beneficial ownership database, which will allow users to search and access certain beneficial ownership information. However, Das warned that limited resources “have presented significant challenges to meeting the implementation requirements of [FinCEN’s] expanded mandate under the Anti-Money Laundering Act, including the CTA’s beneficial ownership requirements . . . we are missing deadlines, and we will likely continue to do so.”

    Financial Crimes Of Interest to Non-US Persons FinCEN Beneficial Ownership Agency Rule-Making & Guidance Corporate Transparency Act Anti-Money Laundering Act of 2020

    Share page with AddThis
  • FinCEN releases statement on NPRM for beneficial ownership

    Financial Crimes

    On February 8, FinCEN disclosed that the comment period from a December 2021 notice of proposed rulemaking (NPRM) related to the reporting of beneficial ownership information (the “Reporting NPRM”) received more than 230 public comments and is now closed. As previously covered by InfoBytes, in December, FinCEN issued a NPRM implementing the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA), which addressed who must report beneficial ownership information, when to report it, and what information they must provide. FinCEN noted that “the next step in the CTA rulemaking series will be FinCEN’s publication of proposed rules on BOI access and disclosure requirements (the 'Access NPRM'), which FinCEN anticipates publishing later this year.” According to FinCEN, some public comments included requests for the opportunity to submit, supplement, or amend their comments on the Reporting NPRM after having the opportunity to review the Access NPRM.

    Financial Crimes FinCEN Agency Rule-Making & Guidance Beneficial Ownership Corporate Transparency Act

    Share page with AddThis
  • FinCEN explores possibility of creating regulatory sandboxes

    Financial Crimes

    On January 13, the acting Director of FinCEN Him Das spoke at the Financial Crimes Enforcement Conference to discuss the transformation of the anti-money laundering/counter-terrorist financing regulatory regime as it relates to new threats, new innovations, and new partnerships. Das highlighted recent FinCEN rulemaking initiatives, including a proposed rule issued last December (covered by InfoBytes here) to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act. In particular, the proposed rule would require many U.S. and foreign companies to report their true beneficial owners to FinCEN and update that information when those beneficial owners change. Das explained that FinCEN is examining how a proposed beneficial ownership database would interplay with the Customer Due Diligence Rule, and stated the agency will share more information in the coming months. Das also discussed an Advance Notice of Proposed Rulemaking (covered by InfoBytes here), which sought comments on potential requirements under the Bank Secrecy Act to address vulnerabilities in the U.S. real estate market to money laundering and other illicit activity.

    With respect to new innovation, Das noted that while FinCEN is exploring the idea of creating regulatory sandboxes to test new methods of transaction monitoring using artificial intelligence, the agency needs feedback from institutions on the potential use and risks of the program. Das also discussed other potential innovative ideas, including, among other things, “new approaches to customer risk rating and institutional risk assessment, digital identity tools and utilities, and automating the adjudication and filing of [suspicious activity reports] related to certain types of activity.”

    Financial Crimes FinCEN Regulatory Sandbox Fintech Anti-Money Laundering Combating the Financing of Terrorism Of Interest to Non-US Persons Corporate Transparency Act Beneficial Ownership CDD Rule Bank Secrecy Act

    Share page with AddThis
  • Biden outlines anti-corruption strategy

    Federal Issues

    On December 6, the Biden administration released the United States Strategy on Countering Corruption (Strategy) in response to President Biden’s June Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest, which designated the “fight against corruption” as a top priority in preserving national security in the United States. (Covered by InfoBytes here.) According to a fact sheet issued the same day, the comprehensive Strategy is intended to “improve the U.S. Government’s ability to prevent corruption, more effectively combat illicit finance, better hold corrupt actors accountable, and strengthen the capacity of activists, investigative journalists, and others on the front lines of exposing corrupt acts.” To achieve this, the Strategy presents a “whole-of-government approach to elevating the fight against corruption,” including by taking expanded steps to reduce corrupt actors from accessing the U.S. and international financial system to hide assets and lauder proceeds derived from corrupt acts. The Strategy, which discusses enforcement and rulemaking under the FCPA, Bank Secrecy Act, and Corporate Transparency Act, among other statutes, is divided into the following five pillars:

    • “Modernizing, coordinating, and resourcing U.S. Government efforts to fight corruption,” including “prioritizing intelligence collection and analysis on corrupt actors and their networks.”
    • “Curbing illicit finance” by, among other things, “[i]ssuing beneficial ownership transparency regulations” to identify bad actors and reveal when ill-gotten cash or criminal proceeds is hidden in real estate transactions, as well as cooperating with other counties to strengthen anti-money laundering regimes to increase transparency in the international financial system.
    • “Holding corrupt actors accountable” by engaging with partner countries to detect and disrupt foreign bribery, developing “a kleptocracy asset recovery rewards program that will enhance the U.S. Government’s ability to identify and recover stolen assets linked to foreign government corruption that are held at U.S. financial institutions,” and working with the private sector to “encourage[e] the adoption and enforcement of anti-corruption compliance programs by U.S. and international companies.”
    • “Preserving and strengthening the multilateral anti-corruption architecture,” including working to implement robust transparency and anti-corruption measures with the G7 and G20 and “target[ing] corruption in finance, acquisition, and human resource functions.”
    • “Improving diplomatic engagement and leveraging foreign assistance resources to achieve anti-corruption policy goals” by, among other things, safeguarding government assistance funds from corrupt actors, “[e]xpanding anti-corruption focused U.S. assistance, and monitoring the efficacy of this assistance,” allowing for flexibility within “anti-corruption initiatives and broader assistance efforts to respond to unexpected situations worldwide,” and improving support for independent audit and oversight institutions.

    The Strategy will require federal departments and agencies to submit annual reports to President Biden on progress made to achieve its objectives.

    Federal Issues Biden Financial Crimes Corruption Agency Rule-Making & Guidance Of Interest to Non-US Persons Anti-Money Laundering Beneficial Ownership Bribery FCPA Bank Secrecy Act Corporate Transparency Act

    Share page with AddThis
  • FinCEN issues NPRM on beneficial ownership

    Financial Crimes

    On December 7, FinCEN issued a notice of proposed rulemaking (NPRM) implementing the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). As previously covered by InfoBytes, the CTA is included within the Anti-Money Laundering Act of 2021, which was enacted in January as part of the National Defense Authorization Act for Fiscal Year 2021. The proposed rule implements the reporting requirements under the CTA and “reflects FinCEN’s careful consideration of public comments received in response to its April advance notice of proposed rulemaking on the same topic.” (Covered by InfoBytes here.) Among other things, the NPRM addresses who must report beneficial ownership information, when to report it, and what information they must provide. According to FinCEN, gathering “this information and providing access to law enforcement, financial institutions, and other authorized users will diminish the ability of malign actors to hide, move, and enjoy the proceeds of illicit activities.” Treasury Deputy Secretary Wally Adeyemo released a statement noting that Treasury, through the public comments gathered from the NPRM, intends to “develop a regulatory approach that will safeguard the integrity of our markets and root out corruption in American real estate.” The comment period ends 60 days after publication in the Federal Register.

    Financial Crimes FinCEN Agency Rule-Making & Guidance Of Interest to Non-US Persons Anti-Money Laundering Act of 2020 Anti-Money Laundering Bank Secrecy Act Beneficial Ownership Federal Register Corporate Transparency Act

    Share page with AddThis