Combating money laundering became a compelling priority for financial institutions on
Requirements for banks on anti-money laundering (AML) and countering the financing of terrorism (CFT). Show
Financial institutions operating in Singapore are required to put in place robust controls to detect and deter the flow of illicit funds through Singapore's financial system. Such controls include the need for financial institutions to identify and know their customers (including beneficial owners), to conduct regular account reviews, and to monitor and report any suspicious transaction. The AML/CFT requirements for banks can be found in this notice, which include the following:
On June 30, 2021, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued its first government-wide priorities (Priorities) for combatting money laundering and the financing of terrorism.1 The Priorities are intended to assist financial institutions subject to the Bank Secrecy Act (BSA) in tailoring their compliance programs and assessing the money laundering and terrorism financing risks posed by their business activities. FinCEN and the agencies with which it consulted — including the U.S. Attorney General, federal functional regulators,2 state financial regulators and national security agencies — made clear in statements published simultaneously with the Priorities that they will be revising their regulations in coming months to align them with the Priorities.3 While financial institutions are not required to incorporate the Priorities into their compliance programs until final regulations come into effect, FinCEN suggested that institutions may wish to begin considering how to approach the Priorities. I. The PrioritiesThe Anti-Money Laundering Act of 2020 (AML Act), which contains sweeping provisions designed to expand and modernize anti-money laundering (AML) and countering the financing of terrorism (CFT) laws and regulations, required FinCEN to publish AMT/CFT national priorities within 180 days of enactment.4 In addition to setting government-wide examination and supervisory expectations, the Priorities are designed to inform regulated financial institutions of what the U.S. government views as “the most significant AML/CFT threats facing the United States” and assist institutions in prioritizing compliance resources accordingly. The AML Act requires FinCEN to update the Priorities at least once every four years to account for new and emerging threats to the U.S. financial system and national security. FinCEN identified the following Priorities, in no particular order:
II. Future Regulations and Supervisory ExpectationsAs noted above, the Priorities do not immediately create new BSA requirements or supervisory expectations, but FinCEN must promulgate final rules within 180 days of publishing the Priorities, and financial institutions will be required to incorporate the Priorities into their BSA/AML programs when the implementing regulations become effective. Moreover, the AML Act requires that regulators examine financial institutions’ BSA/AML programs to ensure they reflect the Priorities once the rules are in effect. FinCEN recognizes that not all of the Priorities will be relevant to every financial institution. Accordingly, financial institutions should consider the extent to which the Priorities are relevant to their business activities and risk profile and assess whether any modifications are needed to their BSA/AML compliance programs to effectively address relevant Priorities. Such an assessment should involve a review of the risks posed by an institution’s products and services, customers and geographic locations. Several of the Priorities refer to prior FinCEN advisories that describe risk typologies and red flags and suggest actions that institutions can take to mitigate the risks associated with the Priorities. Financial institutions may want to review those advisories for guidance. Although several of the Priorities reflect longstanding threats to U.S. national security and the global financial system, such as corruption, fraud, and international terrorism, others describe rapidly evolving and acute threats like domestic terrorism and cybercrime, which may not yet be adequately addressed by existing internal controls. To comply with the forthcoming regulations and supervisory expectations, it will therefore be important to conduct an up-to-date assessment of an institution’s risk profile and control environment. _______________ 1 U.S. Treasury, Financial Crimes Enforcement Network, Anti-Money Laundering and Countering the Financing of Terrorism National Priorities (June 30, 2021) 2 The federal functional regulators include the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Securities and Exchange Commission. 3 E.g., Interagency Statement on the Issuance of the Anti-Money Laundering/Countering the Financing of Terrorism National Priorities (bank regulators) (June 30, 2021) 4 See our Jan. 7, 2021, client alert “US Enacts Historic Legislation To Strengthen Anti-Money Laundering and Counterterrorist Financing Legal Framework.” 5 The White House, Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest, June 3, 2021 This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws. Why AML should be a top priority for financial institutions?To deter the criminals, effective Anti-Money Laundering (AML) programs are a fundamental requirement to ensure that financial organizations are protected and customers have confidence in their operations. AML refers to a system of controls to detect, report and prevent money laundering activities.
At what stage is the money laundering process most vulnerable?It is during the placement stage that money launderers are the most vulnerable to being caught. This is due to the fact that placing large amounts of money (cash) into the legitimate financial system may raise suspicions of officials.
Which act passed initially in India to combat money laundering?On 22 August 2022, Supreme Court accepted a petition to review its 27 July 2022 judgement which upheld core amendments made to the Prevention of Money Laundering Act (PMLA).
What are the 3 stages of the money laundering process?There are usually two or three phases to the laundering: Placement. Layering. Integration / Extraction.
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