2020 saw a substantial amount of enforcement activity in the BSA/AML/OFAC area. Even prior to last month’s enactment of the Anti-Money Laundering Act of 2020 (the “2020 AMLA”), conventional wisdom favored an increase in enforcement activity by regulators and prosecutors for violations of laws in these areas under the incoming Biden Administration. [See Division F]
The 2020 AMLA just gave this area of enforcement a significant shot in the arm. In an era where federal legislation has become rare, this dramatic change to the Bank Secrecy Act’s (“BSA”) anti-money laundering provisions establishes new beneficial ownership reporting requirements; modernizes the scope of the law to cover entities that provide certain digital asset services; and requires the U.S. Treasury to establish BSA/AML/OFAC priorities to guide firms and regulators alike, among other things.
Whistleblower Awards
While the law builds out policy through regulations to be issued, a number of the 2020 AMLA provisions are likely to have an immediate impact on enforcement. One such provision is the enhancement of the BSA’s whistleblowing provisions – Congress sought to model this expansion to some extent on the U.S. Securities and Exchange Commission’s quite successful whistleblowing program. Under the 2020 AMLA:
What Financial Institutions Should Do
AMLA 2020 adds a number of effective measures to a regulator’s enforcement toolkit, and with the expectation of enhanced enforcement under the Biden Administration, it is not alarmist to say the time is now to begin a clear-eyed look at the efficacy of an institution’s current compliance program.