Anti-Money Laundering Act of 2020
By Mandy Bain
One outcome of the Anti-Money Laundering Act of 2020 (AML Act) is FinCEN issued a statement publishing their national priorities related to anti-money laundering and countering the financing of terrorism (AML/CFT) policy. FinCEN also issued a statement to non-banking financial institutions (NBFIs), which includes insurance companies.
There are eight priorities:
(1) corruption;
(2) cybercrime, including relevant cybersecurity and virtual currency considerations;
(3) foreign and domestic terrorist financing;
(4) fraud;
(5) transnational criminal organization activity;
(6) drug trafficking organization activity;
(7) human trafficking and human smuggling; and
(8) proliferation financing (AML/CFT Priorities (June 30, 2021) (fincen.gov).
It is expected that new regulations will be released to prescribe how financial institutions should incorporate the priorities into their risk-based AML/CFT compliance programs. FinCEN recognizes that not all the priorities will apply to every institution.
While the publication of the eight priorities does not require NBFIs to make any immediate changes, we recommend that insurers assess their current AML program and consider the relevancy of each enumerated priority. Companies may benefit from making changes that might be needed to incorporate the 2020 priorities into current AML programs and specifically connecting the dots between the AML program components and FinCEN’s priorities. We think FinCEN may want to see that each priority is addressed in your risk assessment and, if applicable, your AML compliance program, and even if they don’t specifically want that connection, it will demonstrate that you know these priorities, are monitoring developments, and are making changes to your program as is appropriate. Documenting the risk assessment decision-making is always important, and now it will also indicate to reviewers and examiners that each priority has been evaluated and the company has appropriately updated their AML/OFAC program.
