Several of the world's largest financial institutions have moved quickly to limit risks posed by their corporate clients in the six months since U.S. officials finalized a long-anticipated customer due diligence rule, while smaller lenders have treaded a rougher path towards implementation. The measure, first pitched by the U.S. Treasury Department in 2012, establishes a fifth "pillar" in anti-money laundering compliance, explicitly requiring covered institutions to take steps to identify persons owning 25 percent or more of firms that open accounts from May 2018 onward, then verify the accuracy of data they subsequently obtain from those deemed higher-risk. Motivated by...
Over the past 15 years, wide-ranging regulatory views have been promulgated by U.S. financial regulators. While they are congressionally authorized to issue rules that implement the BSA, subsequent interpretations of those rules have morphed into quasi-rules of their own.
Pending requirements that U.S. financial institutions more thoroughly vet their accountholders may especially challenge broker dealers, some of which are designing new systems to scrutinize investment advisers and others who control omnibus accounts and pooled investment vehicles, say sources.
Federal cases against attorneys, accountants and other professionals suspected of washing illicit proceeds have risen by roughly 30 percent in the year since the FBI began actively targeting third-party facilitators, according to the head of the bureau's money laundering unit.
Many compliance officers may have never heard of "circular ownership"- a corporate structure of holding companies and subsidiaries that financial institutions often struggle to map out and unravel during the customer-onboarding process.
A U.S. Treasury Department proposal to toughen customer due diligence obligations for banks would increase compliance costs while providing only minimal benefit to law enforcement, according to industry comment letters.
The U.S. Treasury Department said Wednesday that it was considering imposing customer due diligence currently applied to private banking and correspondent accounts to all accountholders at depository institutions.