With the passage of the Anti-Money Laundering Act (AMLA) of 2020, substantial changes and reforms in Bank Secrecy Act (BSA) compliance are underway. The final rules on the incorporation of the national priorities for money laundering and the countering of the financing of terrorism proposed in summer 2024, when issued, are expected to add the requirement that financial institutions establish a risk assessment process that serves as the basis for the institution’s anti-money laundering and counter-terrorism financing (AML/CFT) program.
The risk assessment process is expected to require institutions to identify, evaluate, and document the institution’s money laundering, terrorist financing, and other illicit finance activity risks, including the consideration of the following: the AML/CFT “Priorities” issued in June 2021; the money laundering, terrorist financing, and other illicit finance activity risks of the institution based on the institution’s business activities, including products, services, distribution channels, customers, intermediaries, and geographic locations; and reports filed by the institution, e.g., suspicious activity reports (SARs).
The National Money Laundering Risk Assessment and the National Illicit Finance Strategy, both published in February and May 2024, respectively, identified the top five predicate crimes that generate the largest amount of criminal or illicit proceeds laundered in or through the U.S., with fraud overtaking drug trafficking as the largest revenue-generating crime. During 2023, the Federal Trade Commission (FTC) received 2.6 million fraud reports from consumers with $10 billion in reported losses. Imposter scams, “quishing” or QR scams, gift card scams, Bitcoin ATM scams, romance scams, investment scams, and business opportunity scams continue to grow in number and impacted losses to the victims. For the last 11 quarters, check fraud has been the most often reported crime in SARs filed by financial institutions.
On December 3, 2024, a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction that (1) enjoins the Corporate Transparency Act (CTA), including enforcement of that statute and regulation implementing its beneficial ownership information (BOI) reporting requirements; and (2) specifically, stays all deadlines to comply with the CTA’s reporting requirements. (The U.S. Department of Justice, on behalf of the U.S. Department of the Treasury, filed a Notice of Appeal on December 5, 2024.)
While this litigation is ongoing, the Financial Crimes Enforcement Network (FinCEN) will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their BOI with FinCEN and will not be liable if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit BOI reports.
These and additional topics will be covered at the annual AML/CFT/BSA & Fraud Compliance Conference from March 4–7, 2025, in Miramar Beach, Florida.
For more information or questions on AML/CFT guidance, please reach out to a professional at Forvis Mazars.