Jamal El-Hindi spoke at the 20th annual Anti-Money Laundering (AML) and Financial Crimes Conference in New York earlier this month. El-Hindi is the FinCEN Deputy Director and covered some of the AML compliance challenges and trends. One of the focuses was on Section 314(b) information sharing, which permits financial institutions to share information with one another to help prevent financial crimes. By sharing information, it becomes easier to see patterns and catch possible money laundering or terrorist financing. However, only 14% of securities sector institutions participate in the Section 314(b) program. Institutions in the depository sector show higher participation with a 40% rate. El-Hindi identified this hesitance for transparency as one of the AML compliance challenges presently trending.
A positive trend that was identified was the growth in BSA filing data, particularly Suspicious Activity Reports (SARs). The number of SARs filed annually by the securities sector increased about eight-fold from 2003 to 2019. Unfortunately, it was also identified as an AML compliance challenge due to the growing worries of the costs of the current SAR reporting system. El-Hindi believes that BSA reporting protects the integrity of the financial system and it’s hard to disagree with him. About 2 million SARs are filed per year.
One of the biggest AML compliance challenges may be the collection of information on the beneficial ownership of entities, but that may be solved soon. The U.S House of Representatives passed an act last year to help end shell companies in the United States. This act has yet to pass the Senate however.
Read more in this article.