Pub. 15 2020-21 Issue 6

WWW.NEBANKERS.ORG 20 O N JAN. 1, 2021, THE SENATE VOTED TO override President Trump’s veto on the National Defense Authorization Act (NDAA or Act). It was previ- ously overridden by the House back on Dec. 28, 2020. The NDAA included over 200 pag- es of significant reforms to the Bank Secrecy Act (BSA) and other anti-money laundering (AML) laws putting forth the most compre- hensive set of BSA/AML reforms since the USA PATRIOT Act of 2001. The continuing question is, what are the implications of this Act? How will this impact not only financial institutions but also U.S. companies and companies doing business in the United States at large? For starters, certain U.S. companies and companies doing business in the U.S. (“report - ing companies”) will be required to provide FinCEN with information regarding their ben- eficial owners. This includes names, addresses, dates of birth and unique identifying num- bers. Newly incorporated companies will be required to do so at the time of incorporation. Exempt companies include public companies, as well as companies that: (i) have more than 20 full-time employees, (ii) report more than $5 million in yearly revenue to the Internal Revenue Service, and (iii) have an operating presence at a physical office within the United States. Changes in beneficial ownership will require reporting companies to provide Fin- CEN with updated information within a year. FinCEN has stated it will maintain a registry of this beneficial ownership information, but it will not be public. However, this does not prevent FinCEN from sharing this information with federal, state, local and tribal law enforce- ment agencies if there is appropriate court approval. FinCEN can also share the beneficial ownership information with financial institu - tions for customer due diligence purposes, but only with the reporting company’s consent. Second, this NDAA creates a new whistle- blower program and establishes a private right of action for whistleblowers who have experienced retaliation. Aiming to incentivize reporting of BSA/AML violations, this pro- gram will award whistleblowers who give tips with as much as 30% of the monetary penal- ties assessed against the company if it leads to monetary penalties over $1 million. This will TheNational Defense Authorization Act: BSA/AML Initiatives Elizabeth K. Madlem, Vice President of Compliance Operations, Compliance Alliance