Rep. Ed Royce (R-CA) proposed legislation last week to strengthen the anti-money laundering (AML) and countering terrorism financing (CTF) system in the United States.
The draft legislation, the Anti-Money Laundering Modernization Act, seeks to modernize the system and update the regulatory infrastructure.
“Our nation’s anti-money laundering and countering terrorism financing regime has been a 40-year work in progress and there is increasing recognition that it needs to be modernized,” Royce said. “The guiding principle of our anti-money laundering regime must be to protect the national security of the United States and our allies, as well as the integrity of the international financial system.”
The bill suggests several reforms to the U.S. AML regime, including adjusting for inflation the thresholds for filing suspicious activity reports (SARs) and currency transaction reports (CTRs). These haven’t been updated since 1996 and 1972, respectively. Doing so would reduce the number of filings which now total over 55,000 per day and allow the Financial Crimes Enforcement Network (FinCEN) to prioritize those of the highest law enforcement and national security consequence.
Further, the draft bill would expand the ability of financial institutions to share suspicious activity reports within their organization to improve risk management. It would also require the Treasury Department to improve qualitative feedback for financial institutions and Federal financial regulators on their AML/CTF efforts.
Lastly, the legislation would improve FinCEN’s administrative rulings process and require Treasury to explore the potential for artificial intelligence, machine learning, and other technologies to help detect and prevent money laundering and terrorist financing.
“Criminal syndicates, rogue nations and terrorist networks are not sitting idly by, and neither can we,” Royce said.