US to reform AML rules

Nikhil Gore is quoted in Global Banking Regulation Review regarding reform to the anti-money laundering framework as part of the National Defense Authorisation Act (NDAA), introducing a new beneficial ownership registration regime for shell companies. Mr. Gore says the beneficial ownership registry “helps make sure that banks, which are very much invested in deterring financial crime, have a single trustworthy government source for information on the ownership of potential shell companies. So it’s gained broad support in the industry and bipartisan support in Congress.”

“There are questions over how it’s going to work in practice,” he adds, “including provision of information from state authorities to FinCEN – there will be some operationalizing to do there.”

He says that the reforms will also better calibrate “out of date” BSA requirements “that have in some cases turned more into checkbox compliance exercises rather than steps really able to target the modalities of money-laundering.” But he also says the bill’s new risk-based approach “will require further interpretation and application.”

He predicts the studies commissioned by the bill, for the streamlining of reporting provisions and adaptations to new technology, will gain attention. “That’s going to set the agenda for the next round of regulation.”