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Budget Crunches, EU Directive, Knowing Your Employee Will Loom Large in 2008, AML Experts Say
By Brian Orsak and Brian Monroe
printCorrections Appended Now that the confetti has settled and the kazoos have been packed away for next year's parties, anti-money laundering compliance officers are asking themselves questions about what lies ahead. Will Congress enact transaction reporting reform? What concrete steps will the Financial Crimes Enforcement Network and the Treasury Department take to reduce burgeoning AML compliance requirements? Will the shift in regulatory attention toward mortgage lending issues encourage financial institutions to slash their AML compliance budgets? Fortent Inform reporter Brian Orsak and Moneylaundering.com reporter Brian Monroe asked some leading experts to identify the biggest issues that confront AML and counter...
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A U.S. Treasury Department budget proposal to shift Bank Secrecy Act oversight duties from the IRS to state examiners could run into funding troubles from state agencies, say officials.
The White House proposed Monday trimming the U.S. Treasury Department's budget by three percent for the coming fiscal year, including a seven percent drop in funding for the country's financial intelligence unit.
Whether the economy improves or stays flat in 2012, the coming year will pose a number of new challenges for the compliance professionals charged with implementing sanctions and anti-money laundering controls, say industry leaders.
The new year won't be any easier on compliance officials at banks and money services businesses, and could get much harder depending on how U.S. officials implement new and proposed regulations, according to industry leaders.
Contending with a lengthy recession, some U.S. banks have fallen behind on their core anti-money laundering compliance duties, including risk ranking customers and reporting suspicious activity, say federal officials.
We never said compliance professionals had it easy, and 2010 doesn't look to be a year when things will be any better for the anti-money laundering and counterterrorism financing industry.
Bank closings and enforcement actions for capital requirement and credit risk violations didn't preclude law enforcement and regulatory officials from pursuing banks for violating U.S. and international sanctions in 2009 or from leaning on financial institutions to catch tax cheats.
Cash-strapped banks facing federal mandates to hire outside consultants to improve their compliance programs are increasingly seeking lower bids from anti-money laundering consultants to get the work done cheaply, say compliance professionals.
New Year's Eve may have come and gone and all of the post-celebration headaches faded, but financial institutions are going to need many more months to recover from 2008.
Twenty-five banks failed in 2008, including Seattle-based Washington Mutual, the largest bank to fail in U.S. history. With less resources and with regulators focused on credit markets and capital requirements, compliance officers faced a whole new set of regulatory challenges.
The European Union Commission Thursday referred four countries, Belgium, Ireland, Sweden, and Spain, to an EU court for failing to meet a December deadline to implement stronger anti-money laundering regulations.
Five of the 15 European Union countries chastised by the EU Commission for not adopting anti-money laundering directives quickly enough could have those issues resolved by the end of the year, according to compliance consultants.
The European Union Internal Market Commission sent 15 countries letters threatening "expeditious legal action" if they didn't transpose the EU's Third Money Laundering Directive into law after missing a December 2007 deadline. But none of the countries are racing to comply, consultants say.
Regulators spent less face time addressing AML concerns as the lion's share of regulatory attention was devoted to subprime lending standards and the broader credit crisis. But, when financial regulators and the Justice Department weighed in, they did so heavily, assessing record penalties.