1 / 13

The Changes in the US AML/ATF Arena

Explore the changing US AML/ATF arena post-USA Patriot Act, with insights on fines, regulations, law enforcement, banker concerns, and regulator perspectives. Learn about key elements of sound AML programs for broker-dealers and major changes in the Caribbean region.

coutu
Download Presentation

The Changes in the US AML/ATF Arena

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Changes in the US AML/ATF Arena Rudolph F. Zepeda, Jr. Federal Reserve Bank of Atlanta Miami Branch

  2. Almost six years after the USA Patriot Act toughened banks' anti-laundering requirements, large banking companies continue to face massive fines for failures in their programs. More large fines are undoubtedly on their way

  3. Banks Can Never Rest • Every time you think you have it covered, you constantly have to update what you do • ABN Amro Holding NV $80 million but may receive a second penalty of nearly $500 million • FINCEN keeps updating its guidelines. • http://www.fincen.gov/pub_main.html

  4. U.S. Government’s Concern • Treasury Dept. considering sweeping structural changes in U.S. financial services system, such as, consolidating regulatory agencies and combining charters of federal and savings institutions. • May put the primary responsibility on blocking those transactions on financial institutions and other payment processors that have banking relationships with Internet gambling companies.

  5. Law Enforcement Latest Concern • Stop Money Laundering by • Increasing fines and sanctions • Forfeiture of assets which revert to the State • Utilize Cash Transaction Reports (CTR’s) to follow the Money • Stop Terrorist Financing • Increasing intelligence utilizing SAR’s • Consider the newest technological advances such as stored value cards as a vehicle to move funds.

  6. Banker’s Concerns • Costs continue to increase in order to establish an efficient AML/ATF program • In trained personnel • Information technology (IT) • Enterprise-wide programs • Throwing money at the problem doesn’t solve it and despite the cost can still result in fines and sanctions. (Union Bank) • Direct competition from non-regulated entities • Impatient regulators, who tolerated problems in the past because systems were being acquired.

  7. Legislator’s Concern • The creation of a single, monolithic federal bank regulator, given the enormous power bank regulators have over financial institutions. • Increasing regulatory burden • Lessons from the recent sub-prime crisis require further regulation of non-bank financial institutions

  8. Regulator’s Concerns • More detailed regulations and laws are on their way • Banks have had 6 years to comply • Bank directors have to take AML training seriously and incorporate into culture

  9. Regulator’s Concerns • The days when bank management tells us that a new system or new AML officer hires need time to improve the existing system are over. • If they have not made progress despite spending within a 12 month period • Supervisory actions and fines will increase if no progress has been made in an appropriate time.

  10. Regulator’s Concerns • With the new legislation and GAO scrutiny • Require more experienced personnel and • Update examiner’s knowledge on new software and technology • Expand AML examination programs to • Large Banks • Community Banks • And the need for SEC and NASD to step up AML compliance on broker-dealers.

  11. Basic Elements of Sound AML Program for Broker-Dealers • A comprehensive assessment in order to determine the risks certain products and product groups pose for money laundering and terrorist financing. • A complete analysis to understand the universe of all transaction types the institution utilizes. • A comprehensive assessment to determine the risk the customer base poses for money laundering and terrorist financing. • Evaluate whether the commercial AML monitoring system to be implemented can be customized to the specific needs and trading activity of the broker-dealer, or whether the logic of the detection scenarios is "set in stone." • Determine the amount of post-implementation support the broker-dealer can expect from an AML monitoring system vendor.

  12. Major Changes Affecting the Caribbean • Correspondent Bank Accounts • Heightened scrutiny due to new issuance of updated Bank Secrecy Act/Anti-Money Laundering Examination Manual • Outlawing internet gambling • The shift by money launderers to trade-based money laundering. • The need to look at AML enterprise-wide

More Related