Following the intense scrutiny of the FinCEN Files, US lawmakers have introduced new legislation to fight money laundering.
The United States House of Representatives and the senate clubbed through the new Anti-Money Laundering Act of 2020 (AMLA) the other week.
“The bill, which added reforms passed by the House from its 2019 Corporate Transparency Act, represents the most significant overhaul of the AML regime in over two decades,” Hamad Alhelal, director of financial crime intelligence at Sigma Ratings, wrote in a new blog.
Essentially, the new law requires companies to disclose their ultimate beneficial owner to US regulators and introduces a new whistleblower reward programme, similar to the one run by the Securities and Exchange Commission. That programme was introduced as part of the Dodd-Frank act. The SEC has awarded more than $731m to whistleblowers since issuing its first award in 2012.
“Most notably though, and as we’ve advocated in the past, [AMLA] directly addresses two of the three key areas of reform that the industry highlighted would have the greatest immediate impact on the fight against financial crime, which are ‘increased public/private sector cooperation [and] meaningful reforms to beneficial-ownership regimes,'” said Alhelal.
“The third key area, the increased use of technology, is at the core of Sigma’s mission, and one of several recommendations highlighted in Sigma’s forthcoming white paper The State of the Investigative Landscape, which addresses both the challenges of the current financial crime investigative landscape and the solutions to address them. Stay Tuned!”
The new law comes on the back of the so-called FinCEN Files being published in September this year. The name applies to journalistic reporting made by the International Consortium of Investigative Journalists (ICIJ) and BuzzFeed.
The story detailed 2,100 secret reports filed by banks to the U.S. Department of Treasury’s agency the Financial Crimes Enforcement Network (FinCEN).
It revealed that only a fraction of suspicious transactions are acted upon by regulators.
In other words, despite banks paying lip service to the fight against financial crime, money laundering often goes unnoticed.
Following the publication of the FinCEN Files, regulators across the world has been under pressure to address these issues.
Over the last year, the total global value of fines for breaking money laundering, markets and data privacy regulations have jumped to $10.4bn.
Copyright © 2018 RegTech Analyst
