Financial Crime

On March 13, BAFT joined eight other financial services trade associations in submitting a letter to the House Financial Services Committee leaders highlighting the need for a national beneficial ownership registry.

While banks are required to collect the beneficial ownership information of their customers, the associations noted that the lack of a single, centralized federal registry for verification of that information “represents a significant gap in the U.S. regulatory system that allows criminals, money launderers, kleptocrats and terrorist financiers to obscure their identities from law enforcement.”

The letter urged lawmakers to pursue reforms to the current anti-money laundering framework that would result in greater clarity and simplicity for banks. Specifically, the associations called for reforms that would better align the examination and compliance framework with national AML/CFT priorities; facilitate information sharing between financial institutions and law enforcement; update and streamline reporting requirements; and encourage the use of technology to support AML efforts.

The letter may be found under the Comment Letters in the Documents Library.

The European Commission today issued its own list of 23 jurisdictions today that it said have “strategic deficiencies” in their anti-money laundering and counter-terrorist financing frameworks.

The European Commission today issued its own list of 23 jurisdictions today that it said have “strategic deficiencies” in their anti-money laundering and counter-terrorist financing frameworks. The list — developed separately from the list of 12 countries maintained by the international Financial Action Task Force, which is the globally recognized body for assessing AML/CFT standards — includes four U.S. territories: American Samoa, Guam, Puerto Rico and the U.S. Virgin Islands.

The Treasury Department immediately expressed its strong concern about the inclusion of U.S. territories on the list. “The commitments and actions of the United States in implementing the FATF standards extend to all U.S. territories,” the department said. “The same AML/CFT legal framework that applies to the continental United States also generally applies to U.S. territories.” Treasury emphasized that the European Commission’s process for identifying these jurisdictions was far less robust than FATF’s methodology.

The commission said its list was developed under stricter EU criteria that took effect last summer. While Treasury said that it “does not expect U.S financial institutions to take the European Commission’s list into account in their AML/CFT policies and procedures,” ABA is concerned that the EU list may pose difficulty for EU-based banks or U.S.-based banks with EU operations that operate in or have correspondent relationships with banks in the listed territories. The association will monitor the issue closely.

View the EU list.
Read the Treasury statement.
For more information, contact Samantha Pelosi.