On January 1, 2021, Congress enacted the Anti-Money Laundering Act of 2020 (the “AML Act”), which contains the most significant reforms to U.S. AML laws since the USA PATRIOT Act of 2001.
Below are some key provisions of the AML Act, and here is a more detailed description of the statute’s major provisions.
- Beneficial Ownership Registry. Creates a new, long-awaited central registry for beneficial ownership information of shell companies and other smaller, less regulated entities, which will be available to financial institutions, law enforcement, and regulators (effective within approximately one year).
- Imposes criminal and civil penalties in connection with willful beneficial ownership reporting failures, the provision of false or fraudulent beneficial ownership information, and the unauthorized disclosure and improper use of such information.
- Whistleblower Program. Creates a more comprehensive whistleblower incentive program for AML violations with increased awards and protections (effective immediately—additional rulemaking authorized, but without a required time frame).
- Subpoena Power over Foreign Banks. Expands statutory authority of the Department of Justice to subpoena documents from foreign financial institutions that maintain correspondent accounts in the United States (effective immediately).
- New Crimes. Makes it a crime to conceal the ownership or control of assets exchanged in monetary transactions involving senior foreign political figures, or financial institutions or jurisdictions of primary money laundering concern, and adds increased penalties for repeated violations of the Bank Secrecy Act (“BSA”) (effective immediately).
- New Collateral Punishments. Prohibits persons convicted of egregious violations of the BSA from sitting on the board of directors of any U.S. financial institution for 10 years. Provides for the claw-back of bonuses paid by financial institutions to certain employees who are subsequently convicted of BSA violations.
- Incorporation of National Priorities into AML Exams. Requires the Treasury Department (“Treasury”) to establish National AML/Countering the Financing of Terrorism Priorities within six months. During regulatory exams, regulators must consider the incorporation of those priorities into a financial institution’s compliance program (regulations effective six months after establishment of priorities).
- Virtual Currencies and Antiquities. Codifies existing regulatory guidance that the BSA covers virtual currencies (effective immediately) and expands the scope of the BSA to include antiquities dealers, advisors, and consultants (effective within approximately one year).
- Streamlining Suspicious Activity Reporting. Requires Treasury and the Justice Department, among other government and industry stakeholders, to consider how to streamline AML reporting, including Suspicious Activity Reports and Currency Transaction Reports, and to propose regulations to Congress (within one year).
- Jeanine McGuinness, Partner, Washington, D.C.
- Matthew Moses, Partner, New York, NY
- Daniel Nathan, Partner Washington, D.C. & New York
- Amy Walsh, Partner, New York, NY
- Benjamin Dobkin, Career Associate, Wheeling, WV
- Tiffany Rowe, Senior Associate, Washington, D.C.
Compliments of Orrick, Herrington & Sutcliffe – a member of the EACCNY.