Pub. 11 2021 Issue 1

16 www.azbankers.org directors and employees. Those who have been determined to have engaged in “egregious” violations of BSA/AML provisions may even be barred from serving on the board of directors of a U.S. financial institution for 10 years from the date of the conviction or judgment. Lastly, the Justice Department will, for the next five years, submit reports to Congress on the use of non-prosecution and deferred prosecution agreements during BSA/AML concerns. Fourth, the NDAA will also require the Treasury, in conjunction with the Justice Department and other agencies, to evaluate how it plans to streamline SAR and CTR requirements, thresholds and processes. Within one year of the NDAA’s enactment, the Treasury must propose regulations to Congress to reduce burdensome require- ments and adjustment thresholds according- ly, with the expectation of these threshold adjustments taking place once every five years, for the next 10 years. Fifth, the Act highlights the importance of law enforcement’s involvement with international AML issues. FinCEN’s mission requires working with foreign law enforcement authorities to safeguard the U.S.’s financial system. To assist, the Trea - sury will be required to establish a Trea - sury Attachés program at U.S. embassies abroad and work with international organi- zations including the Financial Action Task Force, International Monetary Fund, and Organization for Economic Cooperation and Development to promote global AML frameworks. Additionally, FinCEN will appoint Foreign Financial Intelligence Unit Liaisons at U.S. embassies to engage with their foreign counterparts. Over $60 mil- lion per year has been allocated between 2020 and 2024 to the Treasury to provide technical assistance to foreign countries, promoting compliance with international standards and best practices for establishing effective AML and counter-terrorist financ - ing (CTF) programs. Additionally, the NDAA expands financial institutions’ ability to share SARs with for - eign branches, subsidiaries and affiliates, and requires the Treasury and FinCEN Secretary to create a pilot program to achieve this objective. Currently, financial institutions are only permitted to disclose SARs to foreign affiliates that are a “head office” or “controlling company.” This has posed as a roadblock for enterprise-wide compliance within global banks. It is important to note that the Act does prohibit participants in this pilot program from sharing SARs with branches, subsidiaries and affiliates in China, Russia, and other specific jurisdictions. Lastly, the NDAA significantly modifies the U.S. BSA/AML program in the follow - ing areas: • Introduces several studies relating to (i) artificial intelligence, blockchain and other emerging technologies; (ii) benefi - cial ownership reporting requirements; (iii) trade-based money laundering; and (iv) money laundering by the People’s Republic of China. • Modifies various definitions relative to virtual currencies and other nontradition- al cash substitutes; • Introduces antiquities dealers (but not art dealers) to BSA’s applicable scope; • Expands ability to subpoena foreign banks’ records that maintain correspon- dent accounts in the U.S.; • Creates a “FinCEN Exchange” to oversee voluntary public-private information sharing between law enforcement, national security agencies and financial institutions; and • Envisions a no-action letter process for FinCEN. Apart from these topics, the NDAA rein - cor porates an emphasis on r isk-based approaches to AML program requi re - ments and discusses pr ior proposed r ulemaking f rom FinCEN. It even includes discussions on the Treasury being required to periodically publish on national AML and CTF initiatives. There is no doubt that the NDAA’s initia - tives will be extended over several years and require continued efforts by public and private sectors. The cost of these initia - tives to the financial industry and small businesses has yet to be determined and remains a cry of protest from those against the reform. But this does appear to be the start of a more globally-centric effort to combat financial terrorism and money laundering crimes. w Elizabeth is the Vice Pres - ident of Compliance Oper - ations and Deputy General Counsel at Compliance Alliance. In the past, she served as both the Opera - tions Compliance Manager and Enterprise Risk Manag - er for Washington Federal Bank, a $16 billion dollar organization headquartered in Seattle, Washington. She has industry expertise and real-world solutions surrounding bank-enterprise ini - tiatives and knowledge of contract law and bank regulatory compliance. An attorney since 2010, Elizabeth was a Summa Cum Laude, Phi Beta Kappa, Delta Epsilon Sigma graduate of Saint Michael’s College in Burlington, Vermont, and a Juris Doctor from Valparaiso University School of Law in Indiana. As the Vice President of Compliance Oper - ations, Elizabeth oversees C/A’s day-to-day operations of the Hotline, as well as lead - ing our Education initiatives. Elizabeth plays an important part in all operational areas of C/A. continued from page 15