Latest news with #FinancialCrimesEnforcementNetwork
Yahoo
25-07-2025
- Business
- Yahoo
Treasury Delays Anti-Money-Laundering Rule to 2028
Advisors with kingpin clients can breathe easy for now. Regulatory efforts to crack down on malfeasance occasionally harbored by the industry are likely to be delayed for at least two years. The Treasury Department's Financial Crimes Enforcement Network announced this week that it plans to postpone a new set of anti-money laundering requirements for financial advisors that would've targeted terrorist financing and foreign corruption. Though the move is not yet official, the start date for the rules is expected to move from early next year to Jan. 1, 2028, while the agency takes time to 'revisit the scope' of the rule. The delay has been welcomed by many advisors, who worried about greater oversight, burdensome regulation and increased compliance costs. READ ALSO: Krispy Kreme's Suddenly Irresistible. What to Do When Clients Crave Meme Stocks and When it Comes to Succession Planning, Start Early If You See Something, Say Something Adopted last summer, the AML rule is meant to curb the use of US advisory firms for foreign corruption, tax evasion, and fraud. Treasury officials said advisors have served as gateways into the financial system for sanctioned parties including Russian oligarchs and have helped China and Russia access sensitive technology and services. The rule would've required RIAs and exempt reporting advisors to: Design risk-based AML and counter-terrorism financing programs. File Suspicious Activity Reports (SARs). Maintain records of fund transfers (though advisors rarely move client money directly). 'Advisors generally do not present significant AML risk,' Gail Bernstein, general counsel at the Investment Adviser Association, told Barron's. 'We would like to see any rule scoped better to reflect this low risk.' Cheers and Jeers. Investor advocates, however, see a dangerous opening. 'Trump talks a tough game on drug cartels and terrorism, but he has rolled back almost every rule that's meant to hit crime where it hurts by following the money,' Corey Frayer, director of investor protection at the Consumer Federation of America, told This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Hill
24-07-2025
- Business
- The Hill
Banks are carrying the risk of America's foreign policy
The Treasury Department wants banks to act like national security agencies. But the infrastructure isn't there, the guidance doesn't arrive fast enough and the priorities shift too quickly for institutions to keep up. In theory, a risk-based approach to anti-money laundering and sanctions enforcement is supposed to make compliance smarter. In practice, it's become a liability. Banks are being held responsible for foreign policy pivots they didn't cause, can't predict and are rarely equipped to manage. Take Syria. The sanctions shift in June caught everyone off guard. One day, hundreds of blacklisted entities were just gone — no heads-up, no pattern. And oddly, many also stayed sanctioned with no explanation. Inside banks, it wasn't clear what to do. Teams were yanking controls, second-guessing everything, hoping they weren't missing something that would blow back later. No safe harbor was granted. No transition period was offered. It wasn't guidance — it was whiplash. In May, the Trump administration secured $600 billion in Saudi investment pledges, arms agreements with Riyadh, and commercial pacts with the United Arab Emirates and Qatar, jurisdictions with known financial crime vulnerabilities. The United Arab Emirates was only removed from international watch lists in 2024. Weeks later, the Financial Crimes Enforcement Network designated three Mexican financial institutions as primary money laundering concerns under new fentanyl-related authorities, cutting off U.S. correspondent access without warning or transition. Institutions with exposure had to unwind positions and coordinate emergency legal reviews in hours. As policy swings between high-dollar engagement and abrupt enforcement, banks are expected to interpret shifting national priorities without reliable guidance, safe harbors or regulatory infrastructure. This pattern is now familiar: Foreign policy decisions are made quickly, implemented aggressively and left for the private sector to decode. And that decoding process isn't theoretical, it's budgeted, resourced and internalized by banks with finite headcount and finite patience. Meanwhile, the Financial Crimes Enforcement Network's beneficial ownership registry remains structurally hollow. As of March, U.S. companies are no longer required to report ownership data, leaving financial institutions without access to the very information they were promised. The database, once intended to illuminate shell structures and illicit ownership chains, is still cited in federal guidance but remains effectively unusable. With access restricted to a phased rollout and core data now absent, institutions are being held to standards they cannot operationalize. On the sanctions front, Russia enforcement has resulted in over 2,500 designations since 2022. These include banks, oligarchs, industrial sectors, shipping entities and digital asset infrastructure. The scale of enforcement has been unmatched, but typology guidance often lags weeks behind. General licenses arrive late. Enforcement FAQs change midstream. Risk modeling is updated in arrears, not in anticipation. In the United Kingdom, 82 percent of banks admitted to skipping basic verification checks on new customers, and 94 percent do not run daily screenings on existing clients, a worrying number given the rapid changes in sanctions. While these findings reflect U.K. institutions, they offer a stark warning: Even in highly regulated markets, the infrastructure banks rely on isn't scaling with enforcement expectations. In this environment, institutions are penalized not just for doing the wrong thing, but for failing to predict the next shift. They're expected to interpret national security posture in real time, while receiving no classified insight, no operational roadmap and no consistency in enforcement tone. The result? They preempt. They freeze accounts on speculation. They sever correspondent relationships on rumor. This isn't just frustrating, it's structurally unsound. Banks are now de-risking entire regions not because of active sanctions, but because of anticipated volatility. They're refusing transactions not because they're prohibited, but because they might become politically radioactive later. Compliance programs weren't built to carry this weight, and the government isn't helping them do it. Funding is flat. Tools are inconsistent. And regulators still expect real-time decisions in a system designed for after-the-fact review. The message to financial institutions is clear: Enforce foreign policy priorities. The infrastructure, stability and liability protections? Those are still pending. This isn't a partisan problem. It's a systemic one. Democratic and Republican administrations alike have made aggressive use of Treasury authorities to pursue foreign policy goals. But neither has addressed the operational burden left behind. Anti-money laundering compliance and sanctions enforcement have quietly become tools of statecraft, handed off to private institutions that cannot absorb the complexity, ambiguity and legal risk of that delegation. The result is a landscape defined by fragmentation, second-guessing and exposure. Institutions that get it right see no reward. Institutions that guess wrong face enforcement, reputational fallout, and program overhauls. Risk-based compliance only works when the risk is defined, the expectations are stable and the information flow is reciprocal. That's not what banks are getting today. They're being asked to manage not just compliance, but also geopolitical unpredictability. They are, functionally, the operational front line of an outsourced enforcement system. This is not sustainable, scalable or safe.
The Hill
11-07-2025
- Business
- The Hill
Trump's new front in the war on drugs: The banks
While most headlines fixate on border walls and migrant surges, the Trump administration has quietly redrawn the front lines of America's war on fentanyl. This time, there are no boots, no barbed wire, and no rallies in El Paso. The fight has moved into spreadsheets and settlement systems. It now begins with bank wires. On June 25, the Financial Crimes Enforcement Network (FinCEN) executed what amounts to a financial airstrike. Three Mexican financial institutions were designated as 'primary money laundering concerns' under expanded fentanyl-related authorities. CIBanco, Intercam Banco and Vector Casa de Bolsa were each linked to laundering proceeds tied to the Sinaloa, Gulf and Jalisco New Generation cartels. For the first time, the U.S. invoked enhanced powers under the Fentanyl Sanctions Act and its 2024 counterpart, the FEND Off Fentanyl Act, to prohibit U.S. financial institutions from executing fund transfers with the designated entities. This isn't symbolic policy. These orders carry direct operational impact. Any U.S. bank conducting business with these institutions, directly or through intermediaries, must now sever ties. Access to dollar clearing? Gone. Trade finance exposure? Risky. Every transaction now triggers compliance protocol and reputational scrutiny. This is not traditional sanctions strategy. These are not sweeping Office of Foreign Asset Control designations that allow for humanitarian carveouts or negotiated wind-downs. This is a tactical, targeted strike embedded in the guts of the global financial system. It is precise, asymmetric and unrelenting, the financial equivalent of a drone strike without the debris. And it marks a doctrinal shift. Trump, often caricatured as obsessed with walls and tariffs, has added a powerful new weapon to his arsenal: financial denial infrastructure. It is not just about stopping the flow of drugs. It is about shutting off the liquidity that sustains the pipeline. For all the theater of his immigration speeches, this is the quiet policy move that may prove more durable. Consider the backdrop: More than $60 billion in remittances flows annually from the U.S. to Mexico. A meaningful share of those funds passes through regional banks and brokerages that until now operated with little cross-border scrutiny. By targeting institutions complicit in laundering cartel money and facilitating payments for precursor chemicals, FinCEN is signaling that the fentanyl trade will no longer be approached as a law enforcement issue alone. It is now a financial systems threat as well. And the Treasury Department isn't bluffing. The evidence cited in the designations includes direct ties to narcotics traffickers, shell entity layering and even meetings between bank executives and cartel operatives. One institution allegedly laundered more than $2 million to Chinese chemical suppliers. Another handled structured wire transfers linked to bulk cash smuggling. These aren't abstract compliance failures. They are systemic facilitation mechanisms. Mexico's government has already begun to push back, claiming the designations were unilateral and lack evidentiary transparency. That objection might resonate diplomatically, but the private sector won't wait for resolution. The effect is immediate: Global banks will reassess counterparty exposure. De-risking will accelerate, and any institution in Mexico even tangentially connected to suspicious flows is now within the blast radius. This is how deterrence takes shape: not through threats, but through demonstration. The implications go beyond Mexico. China's role in the precursor chemical supply chain remains the largest upstream vulnerability. If Treasury is willing to designate banks in North America, it is only a matter of time before East Asian entities face the same treatment. What began as a domestic opioid crisis has now metastasized into a transnational compliance dragnet. Yet almost no one is talking about it. In today's media environment, fragmented, fast-moving, and dominated by sensationalism, this pivotal FinCEN action received little attention. But make no mistake: this is Trump's most sophisticated offensive yet. It is built on the post-9/11 financial architecture but directed inward, toward cartels, their financial enablers and the global institutions that have failed to scrutinize cross-border flows with appropriate rigor. Some will claim this amounts to financial imperialism. Others will say it bypasses diplomatic norms. Both critiques miss the point. This isn't about diplomacy. It's about leverage. And when cartels can move hundreds of millions through opaque correspondent channels, the argument for restraint disappears. What matters now is precedent. The U.S. has shown that it will name and isolate not just kingpins, but banks as well — not just shell companies, but regulated institutions. It has turned the anti-money laundering infrastructure, long treated as a compliance checklist, into an instrument of statecraft. This is no longer a question of border control. It is now a matter of financial sovereignty. For compliance officers, the message is unmistakable: The risk calculus has changed. For regulators abroad, it sends the warning that proximity to the U.S. financial system no longer guarantees immunity. And for traffickers, it signals a new reality: Your money has nowhere safe to go. This is how you fight fentanyl in 2025 — not just with interdiction, but with isolation. Not just with rhetoric, but with remittances. Trump, whether intentionally or not, has handed Treasury a new doctrine: one that doesn't require a camera crew, a legislative majority or a border photo-op. Just a Fedwire terminal, a designation memo, and the full weight of the U.S. financial system. And that may prove more powerful than any wall ever could. Brett Erickson is managing principal at Obsidian Risk Advisors and an advisory board member at the Loyola University Chicago Law's Center for Compliance Studies and DePaul University College of Business.
Scoop
28-05-2025
- Business
- Scoop
Providing Sanctions Relief For The Syrian People
Marco Rubio, Secretary of State May 23, 2025 In accordance with the President's promise to deliver sanctions relief to Syria, I have issued a 180-day waiver of mandatory Caesar Act sanctions to ensure sanctions do not impede the ability of our partners to make stability-driving investments, and advance Syria's recovery and reconstruction efforts. These waivers will facilitate the provision of electricity, energy, water, and sanitation, and enable a more effective humanitarian response across Syria. In addition, the Department of the Treasury issued Syria General License (GL) 25 to authorize transactions by U.S. persons previously prohibited by the Syrian Sanctions Regulations, effectively lifting sanctions on Syria. The GL will allow for new investment and private sector activity consistent with the President's America First strategy. The Financial Crimes Enforcement Network (FinCEN) is providing exceptive relief to permit U.S. financial institutions to maintain correspondent accounts for the Commercial Bank of Syria. Today's actions represent the first step in delivering on the President's vision of a new relationship between Syria and the United States. President Trump is providing the Syrian government with the chance to promote peace and stability, both within Syria and in Syria's relations with its neighbors. The President has made clear his expectation that relief will be followed by prompt action by the Syrian government on important policy priorities. The sanctions waiver is issued pursuant to section 7432(b)(1) of the Caesar Syria Civilian Protection Act of 2019 (22 U.S.C. 8791 note).
Boston Globe
23-05-2025
- Business
- Boston Globe
Danvers man sentenced to 6 years in federal prison for laundering more than $1 million via unlicensed Bitcoin exchange service
From September 2017 through October 2020, Nguyen operated National Vending, LLC, charging customers a fee to convert cash into Bitcoin, according to the statement. However, in violation of federal law, Nguyen never registered the company with the Treasury's Financial Crimes Enforcement Network (FinCEN), the statement said. Instead, he posed it as a vending-machine business to banks, crypto platforms, and state authorities. He also accepted large cash payments tied to crime, the statement said. In 2018, he took $250,000 from a man he knew was meth dealer; then, in 2019 and 2020, he took $445,000 from three Advertisement Nguyen also failed to report any of these transactions as suspicious or exceeding $10,000, as required by law. Instead, he used encrypted messaging apps to communicate with clients and disguised large cash deposits by breaking them into smaller amounts across multiple days and bank locations, the statement said. Advertisement He even enrolled in a paid course that taught him how to avoid detection, advising him to present the company as a business where 'cash deposits from around the country make sense,' to invent fake supplier lists, and to 'never say the word Bitcoin,' according to the statement. Rita Chandler can be reached at
