This Week in AML
This week FinCEN published an Advance Notice of Proposed Rulemaking regarding anti-money laundering regulations for the trade in antiquities. John and Elliot look at some of the questions in the ANPRM, discuss who FinCEN would like to receive comments from, and remind listeners about the importance of providing comments to ANPRMs and the proposed regulation when they are published later this year.
Regulation of Antiquities - The ANPRM TRANSCRIPT
Elliot Berman: Hi, John, how are you this week?
John Byrne: Good, Elliot. I just got back from Missouri with some of our friends, Dennis Lormel, Steve Gurdak, and Lauren Kohr. We did a BSA conference for small banks first time with live folks in quite a bit. So it was interesting, and it was a lot to digest and talk about.
So I don't know that conferences are back full-time. You know, it's been a while. It was nice to interact with [an] audience again.
Elliot Berman: Yeah. I've been to a few public events. I haven't been to any conferences yet, and it's nice to be back, but it actually feels a little odd. It's something I'll have to get used to again.
John Byrne: Absolutely. Yeah, I agree.
Elliot Berman: So just today, FinCEN issued a press release on the 24th, which we're recording on Thursday. So tomorrow, they're going to push the advanced notice of proposed rulemaking for the regulations related to anti-money laundering for dealers and antiquities. I know you were traveling today, but I wonder if you got a chance to see that release.
John Byrne: We saw it is a short turnaround. It is a 30-day window. Understandable because they have an end-of-the-year timeline, and we've already been in contact with our colleagues at the antiquities coalition.
So we're going to get the financial crime task force back together and file some comments. As we've talked offline, I think FinCEN did a very good job of articulating a whole series of issues and questions in the advance notice so that they can pursue a relevant and, you know, a sort of a sensible proposal here.
So I think that, to me, there's a lot of questions. Folks should take a look at those questions, but looking at whether there should be thresholds under which there wouldn't be reporting, how are antiquities financed? How does all of that work? What are various challenges with knowing your customer? Can, you know your customer. Well, are there safeguards?
I think again, some of these proposals will list a series of questions that are fairly broad. These are pretty specific. So they definitely have done their homework.
Elliot Berman: Agreed. A lot about the risks related to trade in antiquities as it relates to sanctions and terrorist financing, and illicit financial activities.
I agree with you that it's specific. I think you and I've talked about this. In fact, I think we did a webinar about it some time ago, that there are some things that they'll be able to draw on. You know, if you look at, like the pawnbroker's rules and that kind of thing, there are already, what I'll call them, non-traditional financial instruments and businesses that are covered in regulation.
So it's not a blank piece of paper, but these questions are going to provide them with excellent guidance. As we always do, even though it's a short 30 minute, sorry, 30 day reply time, we encourage people who have something to say to send in a comment. It's very clear from this proposal or requests that FinCEN really is looking to have good insight when they sit down, in the next two and a half or two months basically, and write the proposed regulations.
John Byrne: Right, and back in March, they came out with a notice saying, hey, we're working on this. If you have issues that would potentially require the filing of SARS, here's how you would do it. And they asked the question in these series, in this ANPRM, how was antiquity different from a work of art?
Because obviously, they're trying to manage that. How should you define the trade of antiquities? I think that's interesting. They also do what I've been cautioning folks that are, you know, always opposed to regulations, sort of high level from industries that aren't generally part of this, that the chances of it being parallel to banking is basically nil.
I mean, there's just, there's no chance. And they do [have] specific questions that say, you know, how different, or what aspects of AML oversight that banks engage in should be included in this space and what should not be. So it gives entities, people, and experts in those spaces a place to go to say, well, you know, we shouldn't have this requirement.
That's what banks do. Potentially we could have the other ones. So it gives you a chance to do that. I think that's pretty important, and that shows that you know they get it. They understand that not all financial institutions are probably defined the same. We've known that, but perhaps this new industry, new to the BSA, we're fearful, that, that wasn't going to be the case, but I think if they could make the case, that it shouldn't be exactly the same and why there should be thresholds, all those sorts of questions.
Then I think there could be a fair and rational, and reasonable series of requirements because the antiquities market does need that. I firmly believe it, but I think, you know, there's transparency here. This is an open process, and we should all take advantage.
Elliot Berman: Agreed. So I'll do the shameless plug again this week.
If you like this, please, listen for us every week. Also, you can find us on Spotify and Apple Podcasts and anywhere else you get your podcasts. You can also come to our website, and we have a lot of great content, and we encourage you to do that.
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John Byrne: Yeah. Elliot, if I could add one more thing when FinCEN segregates the section on issues for comment, this is what they're looking for. They seek comment from members of the antiquity industry, law enforcement, civil society groups, and the broader public regarding the potential for money laundering and terrorist financing, [and] other illicit activity in this industry.
So they're asking everybody, it's a public comment, which I know seems obvious, but I think sometimes you take a look at certain things and say, well, I don't have expertise in this space, so maybe I won't dip my toe in here, but they're actively soliciting broad comments because they want to do this right. And again, I'm very impressed [with] the way this ANPRM was crafted.
Elliot Berman: Agreed. Well, you have a great weekend, and I will speak with you next week.
John Byrne: Take care of Elliot. Stay safe.
Elliot Berman: Bye-bye.