Proposals include higher SAR threshold for AML Compliance, more data sharing by banks
With the implementation deadline for new AML rules for UBOs looming in May, U.S. banks and AML Compliance stakeholders are calling for the creation of a national FinCEN-based database of ultimate beneficial owners and their corporations.
Members of the Clearing House, a trade organization for the nation’s largest banks, has begun advocating for such a database. Their vocal support, which the Wall Street Journal describes as “pivotal,” could help advance new legislation proposed by Republican representatives Steve Pearce of New Mexico and Blaine Luetkemeyer of Missouri. The U.S. Senate’s Banking Committee is also expected to discuss AML rules in its January meetings.
The purpose of a national database for UBOs and corporate registrations would be to help banks collect KYC/CDD due diligence, and it could help deter the use of shell companies in money laundering and terror financing.
The House bill proposed by Pearce and Luetkemeyer seeks to decrease the regulatory load on banks in other ways, as well. This includes allowing banks to try out experimental new AML technologies and changing the SAR-reporting threshold to $30,000. Currently, the reporting trigger is set at $10,000.
Law-enforcement agencies are expected to push back hard against that SAR-reporting proposal because information about these cash transactions is central to their investigations. Moreover, the relatively small-dollar amounts central to funding terror cells needs to be tracked, according to a former FBI authority cited by the Journal.
While banks could benefit from less burdensome SAR reporting due to a higher threshold, the proposed legislation also calls for more information sharing related to the financial aspects of crimes far beyond money laundering and terror financing. These could include crimes such as “food-stamp fraud, the smuggling of counterfeit goods, and environmental crimes,” according to the Journal report.
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