The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board are seeking comment on a proposed rule that would amend recordkeeping and travel rule regulations under the Bank Secrecy Act, the two agencies said in a joint statement.
The two agencies share joint authority on the recordkeeping rule and have together determined appropriate modifications. FinCEN has sole authority over the travel rule and will make its own suggestions for amendments.
Both rules are part of the Bank Secrecy Act (BSA) of 1970, which requires U.S. financial institutions to assist in the detection of anti-money laundering (AML) activities. The BSA defines the criteria for programs, recordkeeping, and reporting rules used by national banks, federal savings associations, federal branches and agencies of foreign banks.
The BSA compliance program also includes pertinent sections of the Patriot Act mandating that banks adopt a customer identification program.
The proposed recordkeeping rule would lower the applicable threshold of international transactions to $250 from $3,000. Regulations currently require that financial institutions collect, retain and transmit details of transfers and transmittals in excess of $3,000. Domestic transactions will continue at the current $3,000 limit.
The agencies are also proposing that the meaning of “money” be explained as it relates to the rules and further ensures that the definition applies to transactions using convertible virtual currency (CVC). The public use of CVCs like Bitcoin and Ethereum is expanding, the agencies said, and is attracting fraudsters. Cyber thieves have used CVCs “to facilitate international terrorist financing, weapons proliferation, sanctions evasion, and transnational money laundering,” the agencies said.
A PYMNTS Deep Dive earlier this month indicates the eCommerce industry is expected to generate $4.5 trillion annually by 2021, even though less than 1 million of the 24 million eCommerce sites online have generated more than $1,000 a year. Regardless of size, eCommerce merchants are in constant fear over the growing threat of money launderers and the growing number of schemes.
In the most recent PYMNTS AML/KYC Tracker®, the use of artificial intelligence (AI) is probed as a way to streamline AML and know your customer (KYC) processes. A common AML issue that AI can simplify is the customer onboarding process.
