This article aims to offer a broad understanding of the subject matter. However, it should not be construed as legal or professional advice.
Staying abreast of anti-money laundering (AML) compliance standards can be daunting, given the ever-evolving regulatory landscape. With financial crime evolving constantly, it becomes imperative for compliance professionals to grasp the nuances of key legislative developments. Among these, the Anti-Money Laundering Act of 2020 (AMLA) stands out as a pivotal piece of legislation, reshaping the AML compliance landscape in significant ways.
AMLA: A Comprehensive Overview
Enacted as part of the National Defense Authorization Act (NDAA) on January 1, 2021, AMLA ushered in a host of changes aimed at fortifying the United States’ AML framework. These changes directly impact the daily operations of compliance professionals, ushering in new AML requirements while reforming existing ones.
Key Aspects of AMLA
Beneficial Ownership:
AMLA introduces the Corporate Transparency Act (CTA), mandating the establishment of a federal beneficial ownership registry overseen by FinCEN. Both domestic and foreign reporting companies operating in the U.S. must disclose specific identifying information about their beneficial owners, facilitating enhanced transparency and accountability.
Reforms to the Bank Secrecy Act (BSA):
The act introduces new criminal violations to Title 31 of the BSA, targeting individuals or entities deceiving or withholding information from financial institutions. Notably, it prohibits politically exposed persons (PEPs) from concealing material facts about asset ownership in monetary transactions.
Expanded Regulations:
AMLA extends BSA obligations to include art and antiquities trading, underscoring the need for heightened vigilance across diverse sectors. Moreover, it authorizes the exchange of AML and BSA-related data between financial institutions and their international counterparts, encompassing cryptocurrency transactions.
Expanded Subpoena Powers:
Law enforcement agencies in the U.S. gain expanded subpoena powers under AMLA, allowing them to subpoena international financial institutions with correspondent accounts in the country. This broadens the scope of information accessible for investigating financial crimes.
Expanded Whistleblower Rewards and Protections:
AMLA enhances both the rewards and protections afforded to whistleblowers, eliminating the previous payment cap and instituting a ceiling of 30% of the government’s collection for monetary sanctions exceeding $1 million. Additionally, it prohibits retaliatory acts against whistleblowers, bolstering protections for those reporting AML violations.
Established AML/CFT Priorities:
In consultation with relevant stakeholders, FinCEN establishes government-wide priorities for AML and combating the financing of terrorism (CFT). These priorities encompass critical areas such as corruption, cybercrime, terrorist financing, and transnational criminal activities, guiding AML/CFT policy formulation and enforcement efforts.
Non-Complex SAR Filing:
AMLA mandates the streamlining of SAR filing processes, facilitating the automated submission of noncomplex SARs. Additionally, it directs the Treasury to conduct a study on the dollar thresholds for SARs and CTRs, potentially leading to amendments in reporting requirements.
Increased Information Sharing:
Financial institutions gain the authority to share AML and BSA-related information with their international affiliates, fostering greater collaboration in combatting financial crime. Furthermore, AMLA mandates comprehensive studies on the impact of information sharing on AML/CFT efforts, driving evidence-based policymaking.
Navigating AMLA’s Impact on Compliance Programs
AMLA’s enactment necessitates a proactive approach to compliance program modernization, aligning with established AML/CFT priorities and regulatory expectations. Enhanced regulatory oversight, coupled with the introduction of beneficial ownership databases, underscores the need for robust and adaptable compliance frameworks.
Modernizing compliance programs involves leveraging advanced technologies such as AML compliance software solutions like Ahrvo Comply. By integrating real-time transaction monitoring, watchlist screening, KYC verification, and regulatory reporting capabilities, Ahrvo Comply empowers organizations to mitigate compliance risks effectively.
Conclusion
As AMLA reshapes the regulatory landscape, organizations must prioritize compliance program modernization to navigate evolving regulatory requirements successfully. By embracing innovative solutions like Ahrvo Comply, businesses can enhance their AML compliance efforts, ensuring adherence to stringent regulatory standards while effectively combatting financial crime. Contact us today for a free demo or to explore how Ahrvo Comply can bolster your compliance program.
