This Week in AML

Continued Forward Progress on BSA Reform

This week, Executive Vice President John Byrne, and Creative Director Elliot Berman of the AML RightSource staff discuss the latest on a bi-partisan effort in Congress to adopt the first major reform to the AML infrastructure since adoption of the USA PATRIOT Act.


Continued Progress on BSA Reform Transcript

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

John Byrne: Good Elliot. How are you, how are you feeling- recovering from COVID?

Elliot Berman: Yeah, getting better each day. Fortunately the symptoms have been pretty mild, so not the kind of, severe case that a lot of people have had.

So, this week I noticed that there has been some progress, on the efforts to reform the bank secrecy act. There are a few bipartisan things going on in Washington these days, and wanted to check in with you about that. We talked back a number of months ago when there was some flurry of activity, and then I think there's been a lot of behind the scenes activity, but, what's the latest status?

John Byrne: Yeah. So what we know so far is around the AML related provisions. There are several that were included in the broad-based national defense authorization act, which is a budget plus legislation that needs to be signed obviously. And chairwoman Maxine Waters actually released a statement last week, announcing that a number of the provisions that the committee pushed, are included in this broad-based bill.

One of them was one that our community knows full well. And that's, dealing with beneficial ownership - actually requiring that companies, when formed, would have to file directly with FinCEN, so information would be there. And then there's this a series of other provisions that are very, very wide ranging. Everything from, emphasizing the need for innovation in reporting and detection to, potentially changing a number of laws and regulations regarding BSA and AML.

Elliot Berman: And what seems to be the timing? When does the defense authorization component need to get signed?

John Byrne: I'm not one hundred percent sure, but from what we hear from our sources, this could pass as early as next week. Obviously they're on the Thanksgiving break this week. So Congress is not in session, so we believe it'll be done by at least, if not the first full or the first week of December 4th, the following week. So unless there's a provision or an attempt to veto this legislation, which seems highly unlikely, not for these reasons, but for any other reason, this will go into effect, with a series of potential regulations and studies and strategies and things of that nature that I think we both know is probably the most, broad based attempt to improve the AML infrastructure, certainly since the Patriot act.

Elliot Berman: Almost 20 years without, major reform. We've certainly learned a lot in those 20 years. And it sounds from some of the provisions you described and some of the things you and I have talked about in previous weeks, that a lot of the learning is starting to come to bear. How it all plays out, how it interacts with FinCEN's advanced notice of proposed rulemaking and a number of other initiatives that are all out in the constellation, will be very interesting. But it could make for a very interesting spring and summer of 2021.

John Byrne: Yeah. The one thing I would mention, that's something that we feel pretty passionate about, and that we've done programming on, is for the first time, include sellers of cultural artifacts under the bank secrecy act. So there would be a notice of proposed rulemaking and a public transparent process to comment on that. But that would, for the first time, require policies, procedures, potentially filing suspicious activity reports, and a broader awareness to our community.

To better understand how that world works, there's been a similar attempt to do the art industry, but as I understand it, the language in the legislation would study that further, and have a strategy at the end of that study. So art dealers would not immediately come under the BSA, but that is a possibility as well.

Elliot Berman: Well, John, we've been waiting a long time for this. I know you've been working on this for years and years. So, it'll be interesting to see what happens after the holiday.

John Byrne: Right? So have a great Thanksgiving. I hope you feel better. And everybody out there stay safe and we will catch up with you again next week.

Elliot Berman: Okay. John, have a great Thanksgiving.