In this special year-end episode of This Week in AML, Elliot Berman and John Byrne look back at the first half of 2025—a period marked by sweeping changes and global challenges. From the surge in executive orders and controversial pardons in the U.S. to the EU’s Digital Operational Resilience Act and FATF updates, the discussion covers key developments shaping compliance. They explore DOJ’s shifting enforcement priorities, OCC’s growing influence on crypto and banking charters, debates over the Corporate Transparency Act, and the rising costs of AML compliance. Plus, insights on human trafficking detection, cybersecurity threats, and the resurgence of check fraud. This is your comprehensive recap of a chaotic year in financial crime prevention.
Special Edition: 2025 Year in Review - January Through June - Transcript
Elliot Berman: Hi John. How are you today?
John Byrne: I'm good. Elliot. You had a great idea. We hope people are enjoying the holidays. Since we will be also enjoying the holidays, we are pre-recording this before the week that it airs. And we decided, based on your great suggestion, we were gonna do a review of 2025.
So we're gonna do two conversations. January to June and then July to December. I think the way to characterize this, if we were to title this, it would be 2025 a Year in Chaos, I think is a simple way of characterizing it. And so I think we should start by going month by month.
These are global conversations that we have, but as many people know, a lot of the chaos has occurred in the US and in part by the change in administration, which always happens. But I think one of the things right out of the box in January that we certainly talked about was the dramatic increase in executive orders and also presidential pardons.
What did you see there?
Elliot Berman: There were numerous pardons starting in January and extending beyond. I can't remember the number off the top of my head, but a big group of people who had been charged and or convicted from the January 6th events. And then a lot of other people, I guess I would say, people who fit into the broad category of being supportive of the same concepts that seem to be some of the core concepts of the current administration.
John Byrne: And globally the European Union in January put out one of many reports and one of many things they did throughout the year. This particular one was entitled Digital Operational Resilience Act. And it highlights that's acts impact on cyber preparedness for financial institutions. And then in January also there was a number of sanctions and export control cases, which we also saw throughout 2025.
Elliot Berman: Yeah. The other thing we saw in January was the very beginning of a trend that we've talked about throughout the year is we started to see state level regulatory action begin to ramp up. Throughout this year in some ways in response to the reductions in federal regulation or federal enforcement.
John Byrne: Right. In February BaFin sent out some warnings. We'll see this throughout the year on AI related issues. This was on AI driven fraud. So they talk about synthetic identities, deepfake enabled scams. Europol also announced a dismantling of several organized cyber crime groups. So a lot going on outside the US.
In the US, one of the things that was dramatic in terms of the AML sort of bribery corruption areas that we focus on is the administration's announcement at the Department of Justice to pause temporarily and then we'll talk later in the year, the announcement they made regarding their priorities, but a temporary halt in enforcement of the Foreign Corrupt Practices Act.
And that certainly was an issue at the time that groups like Transparency International, the Fact Coalition, what is this gonna mean in terms of investigations of prosecutions for bribery and corruption? So we'll talk more about that later. But they did announce a pausing of that, uh, back in February.
Elliot Berman: Yes. Another thing in February was the beginnings of a recognition of staffing shortages at the IRS and other agencies that were affecting their ability to investigate and recommend prosecution of AML and other financial crime activity. We see that ramp up throughout the year as more and more of federal law enforcement is turned to the administration's approach to immigration.
John Byrne: We move on to March. Obviously, FATF works throughout the year, several plenaries. They do updates as they did earlier in March on compliance issues, deficiencies, evaluation, results, and also a number of reports. And that's obviously consistent throughout the year.
And then we gave some updates to our audience on several high profile corruption investigations in Latin America and in Europe. So we talked about those back in March as well.
Elliot Berman: And this is where we begin to see the divergence between what's happening in the US in terms of pausing enforcement of the Corrupt Practices Act and what's happening in other jurisdictions, particularly in the UK and the EU, where they see are increasing their focus on corruption.
John Byrne: Moving on to April. Again, a continued focus on cyber security issues. Some announcements on ransomware issues that target banks and payment processors. We also talked a bit about some of the rising costs of AML compliance and also some issues and debates going on that are still going on on whether or not there should be changes in the various reporting thresholds, at least in the US in terms of cash reporting and suspicious activity reporting.
So, April saw a number of congressional hearings and other policy debates in the US from financial institutions, I don't wanna say complaining in a negative way, but pointing out their burdens, but also recommending some adjustments, which we're still talking about as we close the year in December.
Elliot Berman: And as we talked about in a reFinCEN episode, reduction of the regulatory burden has become a theme for the US bank regulators. The OCC reFinCENly announced a number of changes to its approach to AML related exams and things like that, all with the theme of reducing regulatory burden.
The other thing that we talked about in April was the role that AML plays in detecting and disrupting human trafficking networks. And there were a number of case studies that were released related to Southeast Asian activity that we talked about in some detail. And that continues to be an ongoing theme.
And I'll put in a plug for the fact that our January webinar is going to be on human trafficking. And so, people can go to our website and register for that as well.
John Byrne: Moving into May. Very active month for our world. And I'd mentioned earlier both the pausing of the FCPA and other things related to how the Justice Department was gonna handle enforcement. In May of this year, Matthew Galeotti, he's head of the criminal division at Justice, issued a memo under his name announcing the updated enforcement priorities of DOJ. And some of them include healthcare fraud, trade, customs, tariff fraud, complex money laundering with particular attention to Chinese operations. So Chinese money laundering is obviously still a priority.
Bribery that quote impacts US national interests and enriches foreign corrupt officials. The reason that I'm quoting the language there's been some pardoning of some individuals who have committed clear bribery and been convicted by juries. We'll see how that is consistent with one of these listed priorities here.
Material support to terrorist organizations, variable interest entity fraud targeting investors. And this is interesting, crime involving the misuse of digital assets. So digital assets is an area of major concern for law enforcement, but focusing on the misuse of these assets and then elder abuse and Ponzi schemes, that sort of thing.
So a whole host of things that we certainly have reported on, not just this year, but before. Are elements of the new, or at least the updated corporate enforcement policy by DOJ.
Elliot Berman: In May we also talked about the fact that law enforcement was generally opposed to legislative efforts to weaken the Corporate Transparency Act, stressing its importance for beneficial ownership, transparency. And as our listeners know we have since then issued new revised regulations that basically do not require any US companies to register.
And it's my understanding from announcements from Treasury that they have, dumped the database that had been created and populated. And again, this is a trend in the US currently at a time when corporate transparency has become a major theme, both at FATF, but across the globe. Later in the year we know that Companies House in the UK enhanced their corporate transparency requirements in terms of identifying directors and principal owners.
John Byrne: And remember, we have reminded you constantly that the US is under a mutual evaluation process by FATF, which will be completed next year. It'll be very interesting to see how the evaluators, uh, discuss the elimination of having domestic entities file reports and also whether or not the Congress actually goes further with rolling back the Corporate Transparency Act, and as of our recording this, that has not yet happened.
Uh, also in May, we gave you a couple of examples of particular cases going on, uh, that month or announcements of the final results of those cases. There were allegations involving the European Court of Auditors, and so that was an issue that of course raised questions about the integrity of, uh, the EU function.
There was a major fraud case in Charlotte that we reported on, and it had AML implications. And there was a, uh, also a major case of fentanyl trafficking by the FBI and others at the southern border, which is a major focus of this administration.
The OCC listed their priorities. And the Office of Comptroller of the Currency in the US has become a major player in this administration. They're gonna be the focal point for crypto and other things. And, um, I talked to somebody yesterday, a former agency official from another banking agency who said that it is clear that the OCC is leading the efforts in terms of changes to banking law and regulation.
And it's also not clear the other agencies are gonna follow suit immediately or in a slower fashion. But they did opine that the OCC is clearly the lead agency in the US regarding banking policy.
Elliot Berman: One of the reasons that that's particularly interesting is among the major banking agencies in the US there's only two that issue charters. The OCC issues charters, and then the national Credit Union regulator can issue a Federal credit union charter, but the FDIC and the Fed which are also major bank regulators do not issue charters.
And the OCC has been very active in entertaining applications from non-traditional groups. For limited purpose bank charters. Crypto platforms and others seeking limited purpose banking charters. And it'll be interesting. I was speaking with someone who is in the process of putting an application into the OCC for a limited purpose charter. They commented that the application approval time has shortened significantly during the time that they've been talking with the OCC.
And so some of these new limited charters are being issued in relatively short time. I can remember a while back, and it's probably 20 years now, helping a major US financial services company apply for a limited purpose trust charter, which the OCC has issued for many years, and it took us a year, and this was well rated, well capitalized, and now we're talking about months.
So very interesting.
John Byrne: So finishing out the first half of our two-part conversation. June of 2025, obviously the FATF of plenary, and they had a plenary in March and one in June. One of the things that they issued was a new guidance document on virtual assets. In addition to that, we have talked high level about various executive orders from the Trump administration. In June, the American Bar Association sued the administration regarding executive orders that have targeted law firms. That is still pending as of our conversation.
It's still not clear to me at least the legality of some of these other executive orders, whether they touch on our world or not, and a lot of that is being, uh, processed through the courts. Uh, so we'll see.
And connected with what we just talked about, regarded DOJ they also mentioned that in terms of white collar crime they are going prosecute white collar crime. We'll believe that when we see it, right? With an emphasis on individual accountability. They made an announcement regarding that.
Elliot Berman: The other thing in June, the US bank regulators requested public comment on fraud prevention measures. Particularly on check fraud and payment system vulnerabilities, and it's interesting that check fraud has kind of had a resurgence. If you follow that world, you know that the number of checks, used for payment purposes in the US has fallen dramatically over the last number of years. And, uh, yet the amount of check fraud has been increasing in the last few years. And as you and I have talked with experts in the area, we've heard that it's a serious concern and there is an effort to focus on it. So, uh, we thought that was very interesting.
John Byrne: So again, um, a lot going on between January and June. Anything else you want to, uh, conclude with for the first half of the year? Again, we did mention the executive orders. You should read those, uh, and get up to speed on those. Particularly the ones that deal with so-called, de-risking, de banking and, and other issues. FinCEN had done a number of things. Two in the first part of the year, there's been a number of, uh, announcements on special measures. They launched a new FinCEN exchange series, which is always valuable, so that's where private and public sector can do some information sharing.
They did one in late June in El Paso to deal with issues on the border there. So a number of things that FinCEN has done, uh, through the first half of the year also warrant, uh, attention from, uh, from our world.
Elliot Berman: Yes. I think that's all I have. Just wanna let our listeners know that we'll cover the second half of the year on our episode that will be available on January 2nd, 2026.
We hope everybody is having a wonderful holiday season, and we will be back with our next regular edition on Friday, January 9th.
John, you have a great holiday season and I'll talk to you soon.
John Byrne: Take care. See ya.
Elliot Berman: You too. Bye-bye.