This Week in AML

Busy, Busy, Busy…

This week, Executive Vice President John Byrne, and Creative Director Elliot Berman of the AML RightSource staff talk about the recent change in FinCEN leadership, the FinCEN ANPRM on the beneficial ownership registry, newly issued sanctions on human traffickers in Pakistan, and an evolving public-private partnership in northern Virginia. It has been a busy week in the financial crimes compliance space, tune in to hear all about it.


Busy, Busy, Busy... TRANSCRIPT

Elliot Berman: Hi, John, how are you this week?

John Byrne: Hi, Elliot. How things going with you?

Elliot Berman: Okay.

So this week I thought there were a lot of things that have popped up and I thought maybe we could just do a quick round robin. First one I thought made sense to talk about is the fact that director Blanco has announced that he's stepping down from FinCEN and going to Citi.

I think - I assume you saw that.

John Byrne:  I did. And, I think it's going to be interesting to see thematically where FinCEN goes, because director Blanco did definitely reach out to the private sector. He expanded the  working groups and there was a lot of interaction and I think that's a super positive.

And I think everybody benefited from that - FinCEN always takes on the personality of the director to some degree. So it'll be interesting to see where it goes next.

Elliot Berman: Yes. And they're going to put in an acting director (who) has been announced, Michael Mosier. He was FinCEN deputy director at one time and he's been filling a role at treasury. But interestingly, his background is he was a chain analyst. I think it may be I'm reading too much, but it could be some recognition of the fact that FinCEN realizes that the virtual currency space and other technology spaces are something they have to continue to focus on. And putting someone with that background in his acting is a signal of that.

John Byrne: Yeah, I agree. And around the same time as we know, FinCEN issued an advanced notice of proposed rulemaking on the beneficial ownership reporting requirements. Obviously, the national defense authorization act had a whole series of things included in it, and one of the main drivers behind the legislation of course, was the elements of the corporate transparency act.

So this will deal with that eventual registry. It's very important the members of the community, clients peers, colleagues, everybody, comment. That's what this is for - the comment period closes May 5th. So this is your opportunity, your first opportunity to sketch the parameters of what this reporting requirement could look like.

Elliot Berman: Yes. And as you and I have said repeatedly on this podcast, it's really important for people to comment. Those comments do make a difference particularly at this stage of the rulemaking process.

So the next one I saw - some sanctions activity about human trafficking and packets. Did you see that article?

John Byrne: Yeah, I did. I did. And it was interesting. I teach a class as George Mason grad school, and last night we actually, our class was about human trafficking and human smuggling to give the students that understanding of this. And this was an interesting thing we highlighted at the top end of the class. So it's a sanctions of a transnational human smuggling organization from Pakistan that [has been] smuggling migrants to the United States, which is wild on a number of levels, obviously. And according to the press release, the director of OFAC said that the designation is an important step toward disrupting these groups.

And one is - and I'll probably butcher this - Abid Ali Khan operations based in Pakistan and around the world. So obviously this is an important designation. It was done in conjunction with Homeland security, justice, and a whole host of folks.

But obviously the notion that smuggling only occurs from South or Central America is not accurate because obviously they get some funding and some strategies out of places like Pakistan. So this is a good move on the part of the government.

Elliot Berman: Yes. And again a topic that you and I have spent a lot of time talking about and writing about and that AML RightSource has been supporting too, is the anti-human trafficking piece.

The last one is - I know there's been some movement in an interesting place, in the public private partnership arena that you wanted to talk about. So tell us about that.

John Byrne: Yeah, this is so great because we've had him on podcasts before, Steve Gurdak, who runs the SAR review team. And Steve flagged for us just the other day that the US Attorney's office in the Eastern district of Virginia, which is where I live - it's Fairfax, Louden County, created a new communication method between law enforcement prosecutors, and financial institutions to prioritize, identify, and analyze SARS that lead to prosecutions.

This is really interesting. Basically, they set up a series of meetings, obviously, initially, virtually, and what they've asked for is they want AML/BSA officers, they want Chief Risk Officers, and people that supervise any filings, of FinCEN information. So I think that's a great example of partnership.

I'm not aware this is replicated in other places around the country, hope that it is. And I hope that any of our law enforcement partners that are listening to this will reach out to Steve. And also we can enable that contact because this is just what we should be doing, right?

Get better at filings, better at providing the information, get it in the hands of law enforcement so that every data point is valued. So I think this is a great example and congrats to the to the Eastern district of Virginia for putting this together.

Elliot Berman: Yeah. If it's not a nationwide effort, it may, maybe it can be a model.

John Byrne: So I agree. And another thing I wanted to mention, you and I do these things posts every Friday. We also do other interviews sometimes lengthier interviews, right? And it's all on iTunes. So folks, you can subscribe on iTunes under AML conversations and make sure you get these the Friday ones that Elliot and I do.

And then the other interviews that we work on as well. Please subscribe and we will talk to you again next time. So thanks Elliott.

Elliot Berman: Thank you, John. Have a good weekend.