Geopolitics, Crypto Rules, AML Shifts, and Unusual International Moves

In this episode of This Week in AML, Elliot Berman and John Byrne unpack a fast‑moving start to 2026 across the financial crime, regulatory, and geopolitical landscape. They discuss the U.S. military’s recent operation in Venezuela and its potential sanctions implications, FinCEN’s holiday‑week rule changes—including the extension of AML/SAR requirements for investment advisers and new guidance preparing the industry for the residential real estate reporting rule—and the OCC’s renewed warning about voluntary SAR misuse.

The conversation also explores brewing crypto legislation in the U.S., the implementation of the OECD’s Crypto‑Asset Reporting Framework in the EU and UK, and the Netherlands’ new €3,000 cash‑transaction ban. International stories include a troubling investigation into U.S.-registered aircraft ending up in drug‑trafficking networks and FIFA’s controversial decisions involving Russian clubs amid global sanctions.

Geopolitics, Crypto Rules, AML Shifts, and Unusual International Moves - Transcript

Elliot Berman: Hi, John. How are you today?

John Byrne: Good, Elliot. Welcome back. The hope is that 2026 is not as chaotic as 2025, but we haven't actually started off that way. And I guess the first thing I would mention is everybody is aware that last week the US military had a very successful event in Venezuela. The only thing I'll mention regarding that is those activities will impact sanctions to some degree, whether they be against additional individuals or entities that do business in that area. We'll wait and see.

But the relevance I think to our world is the explanation right now. Is multifaceted, to say the least. Right. And what's interesting to me, and we mentioned this last year, the administration pardoned the drug trafficking ex president of Honduras. I'll just leave that out there and let folks make other, views regarding what's going on, but this is gonna continue to be something that will challenge national security however you feel about it.

So obviously that we know that went on and we're watching to see the potential impact on the AML world because one of the things that Maduro is being charged with is money laundering. So we'll see how that plays out.

Elliot Berman: We will, and it'll be, I think it'll take a while to see where this all goes. So where, besides that, would you like to start?

John Byrne: As always, there's both international news that we cover as well as domestic. Just a couple of quick domestic issues. Over the holidays FinCEN issued a final rule to extend the effective date of, uh, the AML and SAR reporting requirements for registered investment advisors. And those that are exempt from reporting made sure that people know that it was extended from January 1st, 2026, which would've been already occurred to January 1st, 2028. That was, uh, announced by FinCEN over the holidays.

In addition, late in December, they also announced what they're calling a data-driven border operation to address potential money laundering. Basically they're targeting more than a hundred MSBs operating along the southwest border, and according to the note from FinCEN, these MSBs I'm quoting here, which provide financial services outside of a formal bank are being examined for potential non-compliance with regulations designed to detect money laundering.

FinCEN continues, their operations resulted in the issuance of six notices of investigation, dozen of exam referrals to the IRS and over 50 compliance outreach letters. And I know that you saw another item from, uh, FinCEN, besides the two that I mentioned.

Elliot Berman: I did, they published guidance for the new, residential real estate reporting rule uh, which will be effective March 1st of this year. The materials are designed to help the industry get ready. There's really two significant pieces of the guidance. The first is a bunch of technical things. So for those parts of the industry who haven't had to file with FinCEN in the past, it's all of the technical details and testing details and things like that to get set up for direct electronic filing. That's one piece.

The other piece is what you think of generally as guidance. Uh, who has to file reports. What are the main concepts of the rule. Reference guide for exceptions that apply to trusts, if you recall? And then, uh, common, uh, FAQs. So, there is clarity that the reports can be submitted by third party service providers.

Again if you're familiar with the rule, I don't think there's any surprises in here, but I think many of the people who will be responsible for reporting under the rule going forward may be new to this. Particularly smaller organizations, and we'll have to see, i'm sure the industry will end up figuring out, who's gonna provide some of these services, where in the chain of the transaction it's gonna happen.

It may be title companies. In a lot of places could be mortgage companies. Could be banks, depending on the structure of everything. But that's worth seeing, that's available on the FinCEN website.

John Byrne: One other thing, the OCC over the holidays and the OCC, let's face it, is gonna be the lead besides FinCEN regarding things related to AML and crypto and other things. But they reissued, I would suggest a warning to financial institutions that they had originally put out in September and reminded institutions that, quote, banks should not use voluntary suspicious activity reports as a pretext to improperly disclose customers financial information or evade the Right to Financial Privacy Act.

A premise that frankly, I don't accept. It'll be interesting to see how banks document, uh, their SAR filings going forward based on this document that Gould has reissued. Put it out first in September, reissued it in late December. So I thought that was worth mentioning.

And then one other thing that we didn't talk about. I subscribe to a publication called Punchbowl News, which focuses very specifically on legislation and regulation in the US. A lot of it is produced for people that are lobbyists and that sort of thing. But I saw something this morning that I thought I would mention, and that is that they are reporting that Senator Tim Scott, who is the chairman of the Senate Banking Committee, wants to move quickly quickly being, you know, in the next few weeks on crypto related legislation. I think we've covered this before.

We know that the financial industry is concerned about some of what's in the, uh, I believe it's in the Genius Act, dealing with potentially impacting deposits at financial institutions, which is not our world. But when I read this, it said two things that Scott wants to move on this. Things have been relatively bipartisan, but at least the quotes from sources that they've talked to suggest that this is not gonna be an easy lift. So again, those that are paying attention to crypto legislation should watch to see what the Senate plans to do in the next several weeks.

Elliot Berman: I think if we look to the UK and the EU we see that putting enough a broad and what we think will be an effective regime in place to deal with crypto assets and cryptocurrencies is a long journey. I think it's gonna be very difficult to do anything. Forget the bipartisan, just the mechanics, right. What are you gonna do? And then the level of lobbying in the United States seems to me to be always bigger, deeper, and louder than in other parts of the world. And, uh, I may be a hundred percent wrong on that, but I expect there'll be a line of people out the door of every committee meeting yelling and screaming about something. So it'll be fun to watch.

John Byrne: I guess we'll see. Why don't we go ahead and, uh, cover some international issues.

Elliot Berman: Sure. So, effective January 1st there are some new rules related to taxes on crypto platforms and other things that are going into effect in the EU and the UK. A little bit of quick background. The, Organization for Economic Cooperation and Development, OECD a number of years ago put together something called the Crypto Asset Reporting Framework, CARF. And I can't remember off the top of my head, but I think it's 75 countries, have committed to implementing CARF.

And what does CARF do? CARF requires exchanges and platforms to gather users', identification information, account details, and transaction records. And they have to submit this data to domestic tax authorities. And the system replaces reliance on a case by case cooperation with investigators.

The information gathering part of the requirement kicks in now and in September 30th, 2027, the information sharing components will kick in. I was curious to see whether the US was involved in this. We did sign on and make a commitment to the OECD regime that creates CARF. But to this point, we have not taken all the steps to put it in place, including we would have to pass federal legislation that would make this happen.

So we'll see. I mean, I, I haven't seen anything specifically about CARF lately, uh, coming outta Congress. But we'll have to see what happens. It is a very important change, and I think having the EU and the UK moving along at this pace is a good sign.

The other thing that we saw is that the Netherlands, beginning again January 1st, now has a ban on cash transactions over €3000. And this applies to, um, commercial transactions involving goods between professional buyers and sellers. The band doesn't yet apply to some service providers but it does apply to pawn shop operators, art dealers, car dealerships, jewelers, electronic stores, furniture stores, shopkeepers and all traders and goods, uh, which is kind of interesting.

What it does away with is the requirement to report transactions above €3000 because they're prohibited. On the one hand it's reducing the reporting burden, and on the other hand, it's trying to make transactions that have a higher possibility of being involved with illicit sources and illicit purposes from happening. So we'll see whether as time goes by, whether they're successful. And if they are, whether this gets picked up in other places in the EU and around the world.

John Byrne: Yeah, definitely. Potentially, both pretty interesting. It'll be interesting also to see how these things play out from a practical standpoint and whether it has any impact on what other jurisdictions are doing.

Elliot Berman: Correct.

John Byrne: So, couple of other things. The Organized Crime and Corruption Reporting posted last week that they have done their most recent investigation is into the sale of US planes that are used in the global illicit drug trade. Their reporting according to them, shines a spotlight on how outdated federal rules and lax oversight facilitate high level drug trafficking across Latin America and allow drug traffickers to actually acquire US Jets.

They also spoke to NPR about that which you can go online and look at Morning Edition. But the investigative reporter, his name is Jonny, Wrate, W-R-A-T-E, from the OCCRP.

Elliot Berman: It was interesting. The sequence of how this appears to be happening is that US registered aircraft can be bought and sold, uh, without any vetting of the buyer. And so many of their being sold to shell companies. That are established in the US so that they can retain their US registration. And then, uh, used by foreign owners both for privacy purposes, but also for nefarious purposes. I think the report described this, uh, area of airplane sales as the Wild West.

John Byrne: And continuing with that theme of the Wild West. Just a couple things. Another investigative reporter posted also late last week a story in somewhat innocuous publication [Follow the Money] frankly I wasn't familiar with. But it's how FIFA the, international soccer organization, is actively punishing football teams who have not made outstanding payments to Russian clubs for player transfers, arguing that they couldn't pay that due to sanctions. So FIFA has ruled in almost every single case you have to pay regardless of sanctions issues, which I thought was fascinating. I had not seen that anywhere else.

I did also notice, though also late last year in the Athletic they wrote a story that Russia may actually be able to return to international soccer football after a four year absence from FIFA sanctioned competition. And this is an opening, which is really strange given that the war in Ukraine is still on, but their council, um, announced the creation of what they're calling an under 15 festival style tournament. So it's gonna be, a boys and girls tournament for those under 15 and they are gonna be allowed to participate regardless of where they sit. So that could mean a readmittance of Russia later. So we'll see how that goes.

Elliot Berman: Apparently soccer clubs are more afraid of FIFA than they are of OFAC. Yes. Or the UK or the EU or the UN.

John Byrne: The world is definitely upside down to say the least. So that's all I had on my end. What else? Do you have anything?

Elliot Berman: There was a report by The Financial Times related to the fact that money laundering and sanction fines in the US fell, uh, 61%. It talked about some of the reason possibly being deregulation. There's also the question of how the numbers compare. 2024 was very high because of the very large fine to TD, which was a 2024 event. A number smart folks including our friend Dan Stipano, were quoted in the article focusing on a variety of things, policy changes, the FCPA changes off again and on again, things like that.

But there seemed to be a consensus in the article that the current administration has put out the word across the various enforcement agencies to be less aggressive in the sizes of fines. I think these are things you have to look at maybe not just year by year, but on a more longitudinal basis, but we'll see where this goes.

So John, I know, uh, you've been working hard on our January webinar. You wanna tell us what that's about?

John Byrne: I think everybody that listens to this knows that January is anti-human trafficking month. And like many other organizations, we attempt to give as much practical and new information as possible. So on January 22nd at 1PM Eastern, we are going to do that again as we've done in previous Januarys. So we're efforting several experts. We have one internal and a couple of external ones. I'm just trying to finalize everything. And that will be from one to two Eastern time. Obviously it'd be great if you can join us live, but if not, the recordings will be available shortly thereafter.

One more thing I wanted to mention. We are recording this on January 7th. Yesterday was January 6th. And those in the United States that care are well aware that five years ago domestic terrorists attempted to take over the capitol. Regardless of what one may read and regardless of your party affiliation, facts are facts. The notion that it was anything other than something that was enabled by policymakers uh, unfortunately is, uh, just not only inaccurate but is blatantly false.

I wanted to add that right before the holidays, the House Republicans released Jack Smith, the special counsel's testimony that he gave behind closed doors back in December. And according to the transcript, just a couple things I wanted to reference here. In his opening statement, Jack Smith said the following. Quote, our investigation developed proof beyond a reasonable doubt that President Trump engaged in a criminal scheme to overturn the results of the 2020 election and to prevent the lawful transfer of power, unquote.

He also talks about the document issues. But going back to January 6th, he says another couple of things. Our evidence is that he, meaning the president, in the weeks leading up to the January 6th, created a level of distrust. He used that level of distrust to get people to believe fraud claims that weren't true. He made false statements to state legislatures, to his supporters in all sorts of context, and was aware in the days leading up to January 6th that his supporters were angry when he invited them, and then he directed them to the capitol, unquote.

A very famous member of the Senate and the UN Daniel Patrick Moynihan once said, and it's something that we try to live by every day. You're entitled to your own opinion. You're not entitled to your own facts. We won't forget January 6th, 2021 and neither should you, and I'll just leave it at that.

Elliot Berman: Thanks John. I will talk to you next week. You have a good rest of the week.

John Byrne: Take care.

Elliot Berman: You too. Bye-bye.