In this episode, Elliot Berman and John Byrne take a wide-ranging look at major developments shaping the AML and financial crime landscape worldwide.
The conversation begins in Europe, with updates on the transition to the EU’s new Anti-Money Laundering Authority (AMLA), and early work to standardize suspicious activity reporting across EU member states. From there, the discussion turns to international cooperation, including public-private partnerships in Canada’s fight against human trafficking, and regulatory coordination on cyber threats between the UK and EU.
Back in the U.S., Elliot and John examine recent staff reductions at FinCEN, reflect on leadership changes at IRS‑CI, and discuss the implications of presidential pardons involving financial crime. The episode also highlights scam risks targeting retirees, ongoing debates around digital asset regulation and the proposed Clarity Act, and what financial institutions should be watching next.
AML in Focus: Cooperation, Capacity Gaps, and Emerging Financial Crime Risks - Transcript
Elliot Berman: Hi, John. How are you today?
John Byrne: I'm good. I'm actually traveling down in South Carolina and typically in January it's chilly, but it's not this chilly and it's in the twenties in the morning. I know in Milwaukee, super cold. Back home is super cold. But the East coast and the Midwest are getting hit pretty hard.
And I know you guys, uh have had your share of snow, right?
Elliot Berman: We have. We haven't had big snow, but over the weekend I think it snowed an inch and a half, three days in a row. So you felt like you were always out there doing something with the snow? I'd rather have five inches, we'll move it around and be down with it. Yeah, we have cold, single digits at night teens during the day. We've got a couple days coming where might be in the low single digits, maybe even below zero for highs during the day. But it'll pass.
John Byrne: Yeah, I'm heading home tomorrow and one of my daughters said we're supposed to get 20 plus inches of snow over the weekend, which in Northern Virginia is quite a bit. I'll believe when I see it. And in the years we've lived there, that's happened a couple of times. But we're not Midwest tough in terms of being able to clear the roads and the streets and all that kind of stuff. So it'll be interesting to see. It is January, so it's not unexpected.
Elliot Berman: Yeah. If you're gonna get it, this is when you're gonna get it. So, John, where do you wanna start?
John Byrne: So, internationally, we've talked extensively about the transfer to AMLA in Europe. There's a posting over the past week about the European Banking Authority. They're doing their transfer to AMLA which started January 1st, and I think the transition goes throughout a period of time. And I know you have some something you wanna mention on this, but the transition according to one of the notes, says this new framework, AMLA is gonna do a few things.
These are the bullets that they've posted: a finalized, what they call the EU single rule book, drive supervisory convergence, coordinate the FIUs, and directly supervise 40 major financial institutions. Anything else related to that you wanna highlight?
Elliot Berman: Those items you just articulated, that's the mandate in the framework that created AMLA, the EU FIU. In parallel, we didn't talk about this before we started, a group of European officials from, 25 of the EU members, as well as from AMLA, the European Commission and the Egmont Group, got together recently to begin working on something called, Standardized Minimum Dataset, which is a standard for reporting suspicious activity.
Right now what triggers reporting of suspicious activity across the EU member states is not unified. And so as part of the whole effort of harmonization this separate activity is going on. And it'll be interesting to see. They think they'll have a working draft maybe by the end of this quarter. This was not the first meeting, but this was the first meeting with a broad group of people. They had a small working group that had been working on it.
John Byrne: Our friends in Canada the FIU in Canada, FINTRAC released a report which among other things, talks about the strong public-private partnerships that they do up there and the spotlight that we wanna highlight since it is Human Trafficking Awareness Month, is something that they call Project Protect. The story behind Project Protect is it was created as a public-private partnership based in large part on an ACAMS event in Toronto, where bankers and law enforcement were working together and talked about this really difficult issue and decided they needed to do something more formal. So Project Protect has been very successful and it was launched again back in 2016. It, um, has done what they're calling key contributions on the strategy to combat human trafficking, uh, and a number of other things.
In terms of some of the statistics, they've had 81 criminal charges, and identification support for a number of, victims, specifically in Ontario and in other places. In any event, we talk about partnership constantly, and obviously a really good example up north in Canada.
Elliot Berman: Speaking of cooperation, so this is between governments, the EU and the UK regulators have gotten together and signed an MOU to cooperate on cyber attacks. Important since we know cyber attacks have no borders, to have multiple prudential regulators and others be working from the same playbook, working from the same format, being able to share information. So, if that's of interest to you, it's been reported in a number of places. Very easy to find by search.
John Byrne: Staying internationally. Before we go to the US do you want to talk about what you highlighted regarding South Africa?
Elliot Berman: Yes. South Africa is working hard to get their remaining AML deficiencies cleaned up. They are having their mutual evaluation in this same cycle as the US where a final report is expected at the October Plenary. South Africa had been on the EU blacklist and the FATF blacklist. They're now on the gray list and they would like to get off altogether.
So we'll see whether they can get all that done. 'Cause usually there's a fair amount, but they've made pronouncements from the Treasury Department in South Africa that they're focused and working hard.
John Byrne: Coming to the US, couple things. On a positive note, want to congratulate Guy Ficco, who announced today to his staff and publicly posted that he'll be retiring after 30 plus years at IRS as the IRS CI chief at the end of March.
Guy has been a strong proponent of partnership. Was intimately involved with the CI-First events around the country in 2025. Has been a strong supporter of the AML Partnership Forum that, uh, we've been involved in for a number of years. Will continue to work in the AML financial crime space. But I do wanna mention Guy is leaving his post at the end of March and again, a tremendous public servant and we really thank him for that service.
Elliot Berman: I second that. He's been a great public servant and as we talk about cooperation, a great partner to industry. I'm glad he'll be continuing to do things and I'm actually looking forward to seeing him when you and I are in Washington for the Forum.
John Byrne: Also there's been a story, I know you follow pretty closely and it's a great publication, AML Intelligence, but they did a story about cuts to the FinCEN staff over the past year.
Elliot Berman: Yes. The FinCEN staff was cut by a little over 11% last year. That took them down to 244 staff members. That was November of 2025. November of 2024, there were 275 people, so that's a meaningful drop. I couldn't help but doodle with the numbers. I took a look in AMLA in the EU their target when they're fully staffed, 'cause they're in the process of ramping up is 430 staff members in 2027.
That is just a little bit less than one person on their staff for every million people who live in the EU. If you do the equivalent arithmetic, you find out that we've got about 0.7 of a person at FinCEN for every person in the US And considering how robust our economy is and therefore how much financial crime can be run through it, it feels a little light to me.
John Byrne: Especially with all the work that FinCEN has taken in the past year and plans going forward I agree with that.
NBC News has done an analysis the last four presidential administrations. And just one year into his second term Trump has pardoned an unusually high number of wealthy people accused of financial crime. Over half of the 88 individual pardons are for white collar offenses with money laundering, bank fraud, and wire fraud among the most frequent crimes that the president has wiped clean according to the story. About half the pardon recipients are either business executives or politicians. Included in the latest round of pardons issued Thursday and Friday of last week, were former healthcare CEO, former governor of Puerto Rico, and a pair of siblings who were convicted of fraud charges, one of whom Trump actually previously freed for a different crime. Thought that was interesting report.
And then the New York Times in an opinion piece the other day with their analysis explains how the president has used the presidency to make at least $1.4. Billion since he's been president. And you can take a look at the analysis and the piece on the New York Times, you can look at that online from I believe the 19th of January, but definitely happened in the past couple of days. So I thought we'd mentioned, both of those since it's relevant to financial crime, corruption, bribery, and all the relevant issues that our community cares about.
Elliot Berman: I think the last item I had there was an announcement in the UK that three directors of a company, now defunct, called Ethical Forestry, have admitted to running a £70 million tree planting investment scam.
John Byrne: Wow.
Elliot Berman: Not a phrase you often hear. But what caught my eye more than anything about this is that the target here was to go after older people, retired people, and try to convince them to move their retirement funds into what turned out to be a fraudulent operating company. It was essentially a Ponzi scheme. The company actually failed in 2016, but they finally brought these people to justice and they pled guilty.
More than 3,000 people were scammed as part of this. So why do I even think it's worth mentioning? Because scams are all over the place, and we've talked about this many times. But this seemed like they all do, to have a veneer of reality to them and took advantage of a lot of people at a time where they have no time to recoup.
John Byrne: As of this recording, we are still looking at what possibly can happen regarding, hey, I can't believe I'm saying this, Greenland. So we'll see what happens there. But one other US item I know you wanted to quickly mention and that is something called the CLARITY Act, which is being considered by the Congress in the digital asset space. I know things can change on a daily basis, but anything there you wanna mention?
Elliot Berman: So just to keep everything clear, the CLARITY Act, unlike the GENIUS Act, so the GENIUS Act from last year that created certain, elements of a regime about stablecoins. Who can issue, et cetera. The CLARITY Act is intended to provide clear rules for digital asset regulation, defining the roles of the SEC and the CFTC by designating digital assets as commodities, that's the CFTC, or securities to the SEC.
There's been a lot of negotiation both by the crypto industry, by the banking industry, and by others. And last week there was some indication that the bill was going to be reported out of committee to the floor of the Senate. At the last minute that did not happen. Several significant players from industry and others withdrew their support.
And so at the moment it is sitting. One of the big issues for the banking industry is the concern about the potential impact of stablecoins on bank deposits directly and indirectly on lending. We'll see what happens. Something will happen. But as of today, late in the day, Tuesday, when you and I are recording I have not seen any update.
John Byrne: We'll keep watching that. As we mentioned last week this week the House Financial Services Committee may be considering legislation on thresholds. That would be later on this week. If that does occur, obviously we will report on it in our next conversation.
Elliot Berman: By the time you hear this podcast, our January webinar will have been completed. So, next week, watch for it or early the week after to be available In recorded form the website. On February 26th, we are going to have a program on strengthening your AML program, strategic approaches to SAR filings. And we've got some good speakers as always lined up. So by the time you hear this, you'll be able to register for that.
John Byrne: Yes. And those of you that are considering coming to the DC area in March, we've mentioned this before, if we can get information on LinkedIn for the AML Partnership Forum. That will be in Washington DC on the 19th and 20th of March. We'll talk more about that in the next couple of weeks. But if you get a chance, go to the website some of us have posted information on that, we'd love to have you join us.
Elliot Berman: So John, I know you are heading back to Virginia tomorrow. You travel safely.
John Byrne: Yep. Thank you so much. You stay safe as well.
Elliot Berman: You too. Bye-bye.