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The Anti-Money Laundering Act of 2020: Two Years Removed With More Questions Than Answers

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The Anti-Money Laundering Act of 2020: Two Years Removed With More Questions Than Answers

The Anti-Money Laundering Act of 2020 (“AMLA”), passed by the United States Congress over a Presidential Veto, and as a part of the National Defense Authorization Act of FY 2020, is the first significant Anti-Money Laundering (“AML”) legislation passed since the PATRIOT Act in 2001. Several provisions from AMLA have far-reaching consequences for businesses. Foremost among them is the Corporate Transparency Act, which will require most small and medium businesses in the United States to submit information to the Financial Crimes Enforcement Network (“FinCEN”), which FinCEN will maintain in a database and will make available to certain law enforcement agencies and financial institutions. Although the applicable regulations are not yet finalized, law firms and their clients should be aware of (and planning for) these new requirements. Separately, AMLA also contains a provision regarding subpoenas served by the U.S. Department of Justice (“DOJ”) on U.S. financial institutions that that have foreign correspondent account relationships. Under AMLA, DOJ can request information relating to the foreign correspondent account, going far beyond activities in and through the United States. Possible consequences for failing to comply are significant fines on the U.S. financial institution and the foreign financial institution. Finally, FinCEN, in conjunction with other federal and state law enforcement authorities, issues an annual Priorities release, identifying particular AML areas of interest to law enforcement and regulators. Lawyers and their clients should be mindful of these items in the Priorities release, and build compliance and supervisory structures around them.

Transcript

- Good morning, or good afternoon, wherever you may be listening to this presentation. This is this the Anti-Money Laundering Act of 2020. To your postscript, my name is Jeff Ziesman. I'm a partner with the law firm Bryan Cave Leighton Paisner in the Kansas City, Missouri office. My practice, which spans over 30 years at this point, covers financial institution regulation. Including, but not limited to, issues relating to the Bank Secrecy Act, and anti-money laundering issues at those financial institutions. In today's presentation we're going to cover the background of the Anti-Money Laundering Act of 2020, AMLA for short. And also, several provisions in AMLA that practitioners and compliance personnel should be familiar with and thinking about, as we proceed into the second half of 2022, and into 2023. The background of AMLA is, on January 1, 2021, the United States Congress enacted AMLA as part of the National Defense Authorization Act. Which included aspects that were significant reforms to the United States anti-money laundering structuring regime. The Defense Authorization Act in 2020 within it, were the product of many years of discussions amongst financial institution regulators as well as law enforcement personnel at the state and federal levels. There was, amongst law enforcement and financial institution regulators, which include bank regulators as well as those that regulate broker dealers and neutral funds. Financial institutions within the meaning of FinCEN, and we'll discuss FinCEN in a little bit more detail as we go into this presentation. Financial institutions within the meaning of FinCEN's regulations. There had been no major anti-money laundering bank secrecy act legislation prior to AMLA, since the US Patriot Act in October of 2001. So we were nearing 20 years since there had been any significant statutory structural changes to anti-money laundering statutes in legislation. There was, as I mentioned a moment ago, there was a recognized need among regulators and law enforcement to modernize and strengthen the AML rules and regulations. The Patriot Act, the predecessor to AMLA, the Patriot Act dealt largely with terrorism financing as an outgrowth of 9/11. And there was a recognized need for sort of a broader AML recalibration, and additional measures, elastic measures that could reach certain activities and conduct flowing in and through financial institutions. Among the issues that federal law enforcement and regulators, financial institution regulators had been dealing with concern issues relating to obtaining information from off shore financial institutions. As well as the ability to look through, and look through is in air quotes, entities to ascertain who the beneficial owners were with respect to those particular entities. So this had been a frustration of law enforcement and financial regulators for many years. As we'll discuss the US financial system has very favorable legal structures regarding the formation of business entities. And there had been a recognition, frankly, at the international level, as well as the national level, that bad actors could avail themselves of protections within the US corporate and business law structures, to disguise their actual identities and the activities that were being conducted through those entities. In fact, the United States has recently been recognized with the dubious distinction of being identified as one of the world's best places to hide money laundering types of activities. And AMLA is a product of that recognition and some of the issues surrounding it. The National Defense Authorization Act was enacted over presidential veto. Legislation had been passed by the House in October of 2020 in the middle of the election year. The legislation reached the president's desk after the election, and after the presidential veto both Houses of the United States Congress overrode that veto. In particular, the AMLA legislation requires FinCEN, the Financial Crimes Enforcement Network, or FinCEN for short, to work closely with its regulatory national security and other law enforcement partners. To identify national risks within the United States, and create a list of priorities for that particular year. FinCEN is a bureau within the United States Department of Treasury. And it is the principle regulator at the federal level of anti-money laundering regulations. And it is responsible for the implementation of those rules and regulations, and works very closely with other regulators. Banking regulators such as the Federal Reserve and FDIC, as well as securities regulators like the FIN, or the Financial Industry Regulatory Authority, and the Securities Exchange Commission to implement and enforce those rules through entities under FinCEN's jurisdiction. Which include, as I said, the banks, bank holding companies, broker dealers, and mutual funds, among others. Returning to AMLA, many provisions of AMLA require rule making, or periodic reporting to Congress on implementation efforts and FinCEN agency findings. Rules and reporting to Congress are gonna be conducted over a period of time, in particular, the rule making must be phased in over time. One significant aspect of AMLA is the Corporate Transparency Act, or CTA. The CTA established beneficial ownership reporting requirements for business entities formed, or registered to do business within the United States. And, as I mentioned earlier in this presentation, that had been a frustration of law enforcement and financial regulators for many years, as the ability to look through corporate and business structures to ascertain who the real parties and interests, who the beneficial owners were in those entities. The CTA authorizes FinCEN to collect information and share it with authorized government authorities and financial institutions. And this is, from my vantage point, the most significant aspect of AMLA, is this Corporate Transparency Act. And we're gonna talk about the state of things right now, and an anticipated timeline for implementation of different aspects of the CTA. The titles of AMLA, real quickly, strengthening treasury financial intelligence AML, and counter terrorism financing programs. This requires that regulators establish and periodically update national exam, and supervision priorities. It also expands the definition of financial institutions to cover entities that deal in virtual currency. And that's Title 61. Also under that title it expands the Bank Secrecy Act to antiquities dealers and potentially to art dealers as well. There was a recognition that certain art was... Transactions are being conducted in ways in such sums that there were questionable actors and transactions. The exchange of currency or other forms of money in exchange for art could be used in such a way to launder illicit proceeds. AMLA requires strengthening at an international level. We talked about the need to strengthen cooperation nationally. It also gave a nod to strengthening international cooperation, as well as public/private communications amongst the regulated financial institutions, and FinCEN, other federal regulators. AMLA also includes measures to enhance the BMA, BSA, AML knowledge amongst federal functional regulators, as well. Again, those regulators that deal with entities that fall within the meaning of a financial institution. AMLA requires establishment of a rule specifying standards for the testing of compliance technology. And requires that suspicious activity reports, or SARs for short, processed at financial institutions be governed by a risk assessment process. And this all falls within Title 52, or 62 of AMLA, modernizing AML and CTF reporting system. Permits financial institutions to share compliance resources and also establishes mechanisms that promote the sharing of information. And other sort of technological uses relating to money laundering, anti-money laundering. Also in Title 62 modernizing the AML and CTF reporting systems, seeks to streamline reporting requirements and commissions regulatory reports and studies relating to the effectiveness and efficiency of the reporting requirements. Allows law enforcement to share information of financial institutions relating to the value of the suspicious activity reports that are filed. And also to issue rules to create a pilot program for sharing SAR information with foreign affiliates of those entities. Title 63, improving AML and CTF communication oversight and processes. This is designed to increase collaboration and communication between various agencies. Commissions a study regarding the implementation of a no action letter process, which we'll discuss in a little bit. Permits the issuance of subpoenas to foreign banks, maintaining US correspondent accounts. And also increases the penalties for AML and ESA violations. Title 64, establish a beneficial ownership information reporting requirements. We've touched on this already. This implements the legislation. Implements legislation addressing the concealment of beneficial ownership to both facilitate illicit activities, and also establishes beneficial ownership information reporting requirements. And also, establishes a secure, non-public beneficial ownership database. Title 65 of AMLA requires the US Government Accountability Office, GAO, and treasury to collaborate and perform various studies on such subjects as the new beneficial ownership reporting requirements. Currency transaction reports, CTRs, those are the types of reports filed when $10,000 in currency is deposited at a financial institution. Trafficking, various forms of trafficking are to be studied as well as obtain government feedback, and assess the trade based money laundering aspects at the international level. I mentioned a moment ago, FinCEN's a bureau within the Department of Treasury, and its the primary AML regulator. As I said, I works closely with other federal regulators with respect to AML enforcement and implementation of rules and regulations. FinCEN will be the government entity that's responsible for, under AMLA, maintaining the database relating to the beneficial ownership rule, and related issues under the Corporate Transparency Act. Pivoting to the CTA. The background of the CTA. For many years, law enforcement and regulators had struggled to understand who the real actors were behind business conducted with, through, and around various business structures. Who the parties, the real beneficial owners, who are the real parties controlling the entity and the activities conducted through that entity. The CTA, as I said, was a congressional response to that challenge that had been confronting regulators for many years. It requires certain business entities among them, corporations, LLCs, and similar entities to report certain information about their beneficial owners, and the person who filed the documents at the state level that allowed the business to conduct its business. And that's typically gonna be articles of incorporation, or similar types of documents filed with the relevant secretary of state office. FinCEN is to create a database where that information will be filed, and where that information will be stored. That information will be available to certain other federal regulators, and also to certain financial institutions as a part of conducting the due diligence on entities doing business through those financial institutions. The timeline of implementation for the CTA. And before I commenced this program on Monday, July 18, 2022 I checked the FinCEN website. And there had not been anything posted on the CTA, since February 8, 2022. And on February 8, 2022, FinCEN issued a statement regarding its beneficial ownership reporting requirements and next steps in the process. What had occurred was FinCEN had initiated a notice and comment period on December 7, 2021. That period, 60-day period closed on February 8, 2022. FinCEN, at that time, announced that the comment period had closed. But also indicated in the press release that as they continue to work through issues creating the database, and there's also going to be some modifications and enhancements of the customer due diligence obligations in light of the CTA and AMLA. That they may well reopen the notice and comment period that closed on February 2022. In light of any sort of newly developed information to solicit any additional particular abuse. FinCEN, not only are they responsible for creating rules regarding the database itself, they'll create rules relating to who can access the database. And information regarding the database we anticipate is going to be issued sometime in the latter half of 2022. That's been the indications from FinCEN with no firm commitment on that. But that appears, at this point in time, in July of 2022, there will some type of release before the end of the year. It's anticipated that the CTA would likely be fully implemented after any sort of notice and comment period regarding the creation of the database. As well as aspects regarding which entities are required to report. It's likely that the CTA would be fully implemented someone in the latter part of 2023, or in the first part of 2024. However, as you will see, the type of information that will be required to be disclosed to FinCEN, and maintaining the database is comprehensive. And so practitioners should begin discussing with their clients as soon as reasonably possible whether the client would be one of the entities required to file with FinCEN, and have its information maintained there. As we'll see, some of the items are going to require a fair amount of digging, and perhaps connecting a number of dots as to who the people are to be identified. And so, in fairness, the conversations with clients cannot start soon enough on this topic. Who has to file? So any legal entity that is formed through a filing in a state secretary of state's office is potential what's called, quote, a reporting company, end of quote. This will include, but it's not limited to corporations, LLCs, most types of partnerships, certain types of trusts. And really sort of the waterfront in terms of business entities. Thinking of it in terms of conceptually, it's going to be many smaller types of businesses, as we'll talk about in a moment, and there are a number of exemptions. But smaller types of businesses in whatever corporate form may well be candidates to be a reporting company. And reporting company is defined to include domestic and foreign entities alike. There are 23 exemptions from the definition reporting company. And again, this is generally reserved for larger entities, or those entities that are likely subject to significant state or federal regulation already. Think in terms of those entities that are required, for instance, to file as public companies, 10-Ks, and 10-Qs, and other periodic types of reports with the Securities Exchange Commission. Those types of entities that are heavily regulated as banks. Those types of entities fall within these 23 types of exemptions. At least that's the state of things at the moment in the notice of proposed rule making, and the proposed rule. It's estimated just to demonstrate the vastness, the scope, the breadth of this rule that over 25 million existing business entities will be required to report, will be what's called reporting companies with FinCEN. And that somewhere in the neighborhood of three to four million new entities created every year will be impacted and be required to report under this provision of the CTA. Again, examples of exempt companies, those that are supervised by federal agencies such as SCC, CFTC, insurance companies and charities, federal and state credit unions, banks, and savings and loans. And companies, this is sort of the larger company aspect of the CTA, companies with revenues over five million, and 20 employees with offices in the United States will be exempt types of companies. In terms of how those criteria are satisfied goes the five million and 20 employees with offices in the United States, goes behind the scope of this presentation. But that is likely to be one of the areas in which there may be some potential modification by FinCEN in any final type of rule. The reporting entities must provide information about themselves, the entity itself, its beneficial owners and its applicants. That is again, the persons who made the filings for the business. Reporting companies, the entities, must report their full legal names, also any DBA names, their business street address, the jurisdiction where they were formed to register, and their tax ID number. Beneficial owners, who also must file, are those who have a substantial control over the reporting business, the reporting company. Or they own or control at least 25% of that reporting company. The beneficial owners must provide to onto the database that FinCEN maintains, their full legal name, date of birth, residential street address. Remember, the business files its business street address, the beneficial owner/owners file a residential street address, and the ID number from a state issued photo ID, which could be, for instance, a driver's license. Applicants, this is the third category. We had the reporting entities, the reporting companies, the beneficial owners, and the applicants. Applicants are the third type of, third type of category that must be reported. And they are the individuals who make the decision to form a registry reporting company with the secretary of state. As well as those who actually perform the filing. So think in terms of there could be two separate people who are deemed applicants. It could the person who makes the decision to register the reporting company with the secretary of state, as well as the one who conducts the administrative task of actually performing the filing. And this is an area in which attorneys and law firms, as well as other third types of, third party service providers, have been engaged with businesses over the years to do these filings. And they will be considered to be applicants if they do the filing. Each applicant must provide their full legal name, date of birth, business street address, and the ID number from a state issued ID again, such as a driver's license. When are these filings going to be due? Again, we don't have any firm date yet, in July of 2022, because there is no final rule which will be effective. After the regulations become effective, though. The existing reporting companies, those that are in existence, after the regulation become effective, those entities will have one year to make their initial report to FinCEN. Entities formed on or after, on or after the regulation's effective date, will only have 30 days to make their first reports to FinCEN. Again, assuming that FinCEN does not alter the timelines in its draft regulations. The one year does permit a fair amount of time to get in the information for these filings. But for those entities formed on or after, at least as the rule sits right now in its proposed state, those entities will have 30 days after the regulation becomes effective to make their first reports. And that is a very quick timeline. And that was the subject of a fair amount of commentary, a fair amount of feedback provided to FinCEN on the regulations. So stay tuned as to whether those will be modified or not. In the same vain of when are filings due, any changes to the reports filed to update information, for instance, must be provided within 30 days of the change. So for instance if there's additional beneficial owners that need to be identified in a previous filing, they'll have 30 days after the beneficial owners obtain their beneficial interest to make such a filing. If there are errors in data that previously been reported, those must be reported in an updated filing within 14 days of the day of discovery of the error. What are the consequences of failing to file, making a false filing? They are significant. Willful failure to report at all a report that's required to be filed, or willful providing false beneficial ownership information or a fake document, such as a fake driver's license, quote, shall, end of quote, be punished with a civil penalty of up to $500 a day. Plus a possible criminal fine of $10,000, and in the criminal realm, up to two years in prison. So the potential consequences of a willful failure to report or a willful filing, are significant. In that same regard, also significant, knowingly disclosing or using beneficial ownership data for an unauthorized purpose. So this is an instance of someone taking this data, and obtaining this data and using it for a purpose not permitted under the CTA, that person quote, shall, end of quote, be punished with a civil penalty of up to $500 a day. Just like the willful failure to report. But a mandatory criminal fine of up $250,000, or up to five years in prison, or both. So using the information for an improper purpose has even steeper consequences in a willful failure to report or willfully filing false information. Who may access the data that goes into the FinCEN database? Federal law enforcement, think IRS, FBI, DEA, any of the number of federal law enforcement agencies, also, intelligence agencies and, as I mentioned, financial institutions regulators. All those agencies will be able to access the data that FinCEN maintains in its beneficial owner database, without any court order. State law enforcement officials, and financial regulators at the state level will need a court order. I think we can look forward to additional details on that being sorted out as this moves forward. This creation of this database was also for the purpose of financial institutions having access to it. And the financial institutions may obtain consent from reporting entities to obtain information from FinCEN for their due diligence purposes. So in the process of conducting due diligence with respect to a new customer relationship, or a continuing customer relationship, financial institutions may obtain consent from the reporting entities to get that information that had previously been filed with FinCEN. What's the attorney impact? And we've touched on some of these concepts already. Applicants, the term applicants is defined extremely broadly. FinCEN explicitly notes in the notice of proposed rule making that law firms frequently, quote, are responsible for the decision to form a reporting company, end of quote. Making the law firm employees, quote, applicants, end of quote. So FinCEN had thought about this very issue, and has identified that law firms are those that, because they frequently are intertwined with decisions to form a reporting company, they could be, law firm employees could be deemed applicants based on their particular role in the process. Law firms may consider adopting a policy which would bar firm personnel, or bar some firm personnel from handling the reporting of clients beneficial ownership data. Given the significant criminal and civil penalties we discussed earlier. Law firm employees who are deemed applicants will need to make the appropriate reporting, even if that work was done long ago. So we touched on for those entities that are not exempt, in other words they are reporting companies, if they're reporting companies on the effective date of the final regulations, the final rules, those law firm employees who assisted in the filing will have to consider whether they need to make appropriate reports to the FinCEN database. By extension, law firms may consider not serving as a permanent agent for service process, because of some of these CTA types of issues. And you're gonna have find replacements agents for clients that the law firms are still serving in that capacity. Another thing to think about at the law firm level is what is the engagement letter process look like? You may want to specify an engagement letter whether the firm will provide advice regarding CTA issues, or will perform any issues, any functions that could leave the law firm's employees to be applicants under the CTA. Taking an abundance of caution approach, law firms may want to consider, whether they have disclaiming language included in the engagement letters at the outset of the client relationship. As well as periodic reminders in the form of some type of written supplemental release reminding clients that the law firms are not performing specified functions under the CTA, such as filing. That, in a nutshell, is the CTA. And that's one of two areas coming out of the, coming out of AMLA that is extremely significant. And had potentially far reaching types of consequences, given the breadth of the net that's being cast for reporting companies. As well as the significant criminal and potential civil sanctions imposed for failing to file reports or filing false reports. The other significant area under the, under AMLA, involves the subpoena of foreign banks with US correspondent accounts. And this is a by product of some litigation that was conducted between the United States Department of Justice, and several Chinese, entities or domicile in China, the entities being financial institutions. In particular section 6308 of AMLA is the relevant provision for this particular subject. And it has expands the government's authority to subpoena documents held by foreign banks, where those documents are held overseas. The rule, as I mentioned a moment ago, covers correspondent accounts. A correspondent account is an account at a bank. It's often called a nostro or vostro account, established by a banking institution to handle a variety of transactions for another financial institution. These are conducted typically through bilateral types of agreements between the two banks. So a foreign bank establishes US correspondent accounts, which permitted to transact in the United States, in United States dollars, even though that foreign bank, that foreign financial institution does not have a branch location in the United States. On the other hand, if a foreign bank has a US branch, that jurisdictional analysis is really straight forward. The government issues what's called a Bank of Nova Scotia subpoena. It's a Grand Jury subpoena to a foreign bank with US branches. And jurisdictionally, the analysis is straight forward. The foreign bank has consented to doing business in the United States by virtue of having a branch here. And entering into some type of consensual business relationship with the US banking regulators. As I said a moment ago, the corespondent account, on the other hand, doesn't have a branch here. Rather, it has a bilateral agreement with another bank, a US bank, were it's allowed, the foreign bank is allowed to conduct transactions In the US within the United States, customers in United States dollars. That's what makes the correspondent account different from the situation where the bank has a US branch. The Patriot Act, remember the Patriot Act created in the aftermath of 9/11 in October of 2001. The Patriot Act authorize subpoenas to foreign banks for records related to correspondent accounts, quote, including records maintained outside of the United States relating to the deposit of funds into the foreign bank, end of quote. By its very language, this limited that subpoena authority to records relating to a correspondent account. That's what parties would focus on is whether the records being sought related to those correspondent accounts, including those records maintained outside of the United States. Which could relate to transaction activities such as depositing of funds into the foreign bank. The scope of that provision was far narrower than it is at present. Section 6308 of AMLA amended the Patriot Act, amended these provisions to allow DOJ and treasury departments to issue subpoenas to any foreign bank that maintains a US correspondent account for records relating to the correspondent account. So quite similar to what was permitted under the Patriot Act, or any account at the foreign bank. So all of a sudden we've expanded significantly the scope of power, the scope of authority permitted to DOJ and the Department of Treasury. And this includes records maintained outside of the United States. So we go from records relating to the correspondent account at issue under the Patriot Act to records relating to the correspondent account, or any account at the foreign bank. So read literally, the DOJ could ask about any transaction, or transactional activity at any of the foreign banks covered under 6308 of AMLA. And this really doesn't take much imagination to envision how potentially wide ranging a subpoena and government discovery could go with this type of language in place. A subpoena issued by DOJ, or a treasury could relate to a broad range of subject matters at a foreign bank. It could relate to an investigation of a violation of US federal criminal laws, an investigation of a violation of the Bank Secrecy Act, a civil forfeiture action or a whole range of other topics, potentially as well. And what's challenging, given the current language is a foreign bank cannot just argue that complying with the subpoena would violate the laws of its domicile. And the predecessor case before this particular provision came into effect, the prior litigation with DOJ, and the Chinese financial institutions, led to China creating several statutory types of provisions which prohibited under a straight forward reading of those statutes. Providing information in response to a subpoena to US regulators. And under AMLA the foreign bank has the Hobson's choice now, of defying its own country's laws, or violating US law if it doesn't fully comply with the subpoena. And the consequences of a failure to comply can be draconian. A foreign bank, the foreign financial institution, can be fined $50,000 per day for non-compliance. Let me say that again. Potentially fined $50,000 per day for non-compliance. And recall that in the correspondent bank account scenario the correspondent bank has a banking relationship with a US bank, under a bilateral type of agreement. So the US bank has an agreement with the correspondent bank. Well, the US Government can terminate that correspondent banking relationship after the government issues a written notice of non-compliance. So not only can the foreign bank be fined, the correspondent banking relationship with the US bank can be terminated. It's what has been referred to in literature as quote, the financial death penalty, end of quote. The good news about this is the statute gives federal authorities significant discretion on whether to issue a written notice of non-compliance. And there likely are a wide range of international and national considerations that would come into play. Particularly, depending on the size and scale of the operation of the correspondent financial institution. Those that are deeply embedded in the United States financial system. One can imagine, you can have serious, serious consequences if a correspondent banking relationship, or relationships are terminated. To pay the financial penalties the Treasury Department, or DOJ, can seize foreign bank funds in the US, in US financial institutions to pay those penalties. And then the counterparty to the correspondent bilateral agreement, the US bank can itself be fined $25,000 per day if a termination order is entered until that termination order is satisfied. Again, the government has a lot of discretion in this area. To my knowledge there have not been any instances, at least that received broad publicity of a termination order being issued. As I said the government may use such a tool as a last resort in litigation given international relations and the potential disruption to the US financial system the entity is deeply embedded. The last particular provision of AMLA, and there were a number of provisions. But the three that are the focus of this presentation the CTA, the subpoena of foreign bank accounts with US correspondent accounts. And then the third thing I'll mention is AMLA required FinCEN in coordination with other federal law enforcement agencies to issues AML national priorities within six months of the legislation's passage. And on June 3, 2021, FinCEN issued its first ever AML national priorities release. There has not been one issued in 2022. But the one that was issued in 2021 was wide ranging. And I think we can anticipate that federal regulators including, but not limited to FinCEN would consider each of these items I'm going to mention from the 2021 release to be equally applicable and of a concern at the federal level, as they were in June of 2021. The first are is corruption. That type of conduct that undermines democratic institutions. It's been identified as abuses by senior officials in certain other countries. That's priority number one. Priority number two, cyber crimes and cybersecurity, not surprising, it's been in the news for over a decade. This was defined as any illegal that involves a computer, an incredibly broad definition. The regulators are particularly concerned about cyber financial crime and ransomware attacks. We've seen a fair amount of press surrounding this type of issue with respect to the war between Russia and Ukraine. Third national priority identified in the June 2021 release, terrorist financing. This is an outgrowth of the Patriot Act of 9/11. Identifies several specific foreign and domestic groups that fence in and federal regulators are most concerned with. Terrorists require financing to recruit and support members, so disrupting that ongoing finance, that ongoing flow of money is one of the keys to successfully countering terrorism. Number four, fraud, this category is the largest share of illicit proceeds of the United States. Fraud, again, is wide ranging, incredibly expansive, and it include proceeds from fraudulent activities that may be laundered through offshore accounts or entities, accounts controlled by cyber criminals, or money mules. Transnational criminal organization activity, this is item number five, involves drug trafficking, human smuggling or trafficking, and weapons trafficking, among other crimes. There have been identified a number of organizations from Mexico and Russia operating within the US system that remain significant concerns to FinCEN and law enforcement officials. Number six, drug trafficking organizational activity, a close relative to the item I just mentioned. This is illicit drug proceeds that may be laundered within or through the US financial system. FinCEN identified a number of complex schemes to launder drug proceeds that have substantially increased in complexity in recent years. This includes, but is not limited to use of front companies or couriers to deposit cash, all of which is derived from the sale of narcotics into the US financial system. Number seven, human trafficking and smuggling. Human trafficking networks use a variety of mechanisms to move illicit proceeds, including through sophisticated professional money laundering networks. The proceeds can come from a range of activities, including revenue from logistics, transportation of the victims. Along with funds relating to the exploitation of those victims. And then the last category identified in the national priorities letter in June of 2021, proliferation financing. This involves exploiting the US financial system to move funds for state sponsored terrorist programs, or acquiring weapons of mass destruction. And this is related to several of the prior categories. The global correspondent banking system which is the correspondent banking system we mentioned a moment ago, does raise proliferation financing concerns, because this allows the flow of significant funds within and through the US. Which creates a significant risk within our borders. The provisions of AMLA, can all be found on the fincen.gov, that's F-I-N-C-E-N dot gov website. And there is an AMLA link that will take you to particular releases. It also identifies the date of those releases. I ran off a copy off the FinCEN website. And there's, approximately eight different categories, breaking it down by subject matter under AMLA. But you can see, when there's been a news release, when there's been either an advance notice, proposed rule making notice, proposed rule making. As well as, as we discussed earlier with respect to CTA, anyway, when the notice of comment period closed February 8, 2022. That concludes this presentation. I anticipate in the latter half of 2022, there to be a significant amount of releases under AMLA by FinCEN in an effort to move in particular the CTA regulations forward. And to get the database functional and operating certainly by 2024. That is obviously no small endeavor given the 25 plus million entities that likely will have to register with FinCEN. But I think we can anticipate a certain level of activity in the latter half of 2022, and in 2023 in the ramp up to full implementation of the CTA. I think we can expect a flurry of activity. Again, my name is Jeff Ziesman. Thank you for attending this presentation. If you have any questions for me, I'm happy to answer them. My office phone number's 816-374-3225, 816-374-3225. And my email address is J-E-F-F dot Ziesman, Z-I-E-S-M-A-N, at bclplaw.com. That's Bryan Cave Leighton Paisner, L-A-W, dot com. Thank you for attending. And please let me know if you have any questions, thank you.

Presenter(s)

JZ
Jeffrey Ziesman
Partner
Bryan Cave Leighton Paisner LLP

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                Not Offered
                Louisiana
                  Not Offered
                  Maine
                  • 1.0 general
                  December 31, 2026 at 11:59PM HST Self Apply
                  Minnesota
                    Not Offered
                    Mississippi
                      Not Offered
                      Missouri
                      • 1.0 general
                      September 21, 2024 at 11:59PM HST Available
                      Montana
                        Not Offered
                        Nebraska
                          Not Offered
                          Nevada
                          • 1.0 general
                          December 31, 2025 at 11:59PM HST Approved
                          New Hampshire
                          • 1.0 general
                          September 21, 2024 at 11:59PM HST Available
                          New Jersey
                          • 1.2 general
                          January 16, 2025 at 11:59PM HST Approved
                          New Mexico
                            Not Offered
                            New York
                            • 1.0 areas of professional practice
                            September 21, 2024 at 11:59PM HST Available
                            North Carolina
                            • 1.0 general
                            Unavailable
                            North Dakota
                            • 1.0 general
                            September 21, 2024 at 11:59PM HST Available
                            Ohio
                            • 1.0 general
                            Unavailable
                            Oklahoma
                              Not Offered
                              Oregon
                              • 1.0 general
                              September 21, 2025 at 11:59PM HST Approved
                              Pennsylvania
                              • 1.0 general
                              Pending
                              Puerto Rico
                                Not Offered
                                Rhode Island
                                  Not Offered
                                  South Carolina
                                    Not Offered
                                    Tennessee
                                    • 1.0 general
                                    Pending
                                    Texas
                                    • 1.0 general
                                    Pending
                                    Utah
                                      Not Offered
                                      Vermont
                                      • 1.0 general
                                      September 21, 2024 at 11:59PM HST Approved
                                      Virginia
                                        Not Offered
                                        Virgin Islands
                                        • 1.0 general
                                        September 21, 2024 at 11:59PM HST Available
                                        Washington
                                          Not Offered
                                          West Virginia
                                            Not Offered
                                            Wisconsin
                                              Not Offered
                                              Wyoming
                                                Not Offered
                                                Credits
                                                  Available until
                                                  Status
                                                  Not Offered
                                                  Credits
                                                  • 1.0 voluntary
                                                  Available until

                                                  September 21, 2024 at 11:59PM HST

                                                  Status
                                                  Available
                                                  Credits
                                                  • 1.0 general
                                                  Available until

                                                  September 21, 2024 at 11:59PM HST

                                                  Status
                                                  Available
                                                  Credits
                                                  • 1.0 general
                                                  Available until

                                                  September 21, 2024 at 11:59PM HST

                                                  Status
                                                  Approved
                                                  Credits
                                                  • 1.0 general
                                                  Available until

                                                  September 21, 2024 at 11:59PM HST

                                                  Status
                                                  Approved
                                                  Credits
                                                  • 1.0 general
                                                  Available until
                                                  Status
                                                  Unavailable
                                                  Credits
                                                  • 1.0 general
                                                  Available until

                                                  September 21, 2024 at 11:59PM HST

                                                  Status
                                                  Available
                                                  Credits
                                                    Available until
                                                    Status
                                                    Pending
                                                    Credits
                                                    • 1.0 general
                                                    Available until

                                                    April 30, 2024 at 11:59PM HST

                                                    Status
                                                    Approved
                                                    Credits
                                                    • 1.0 general
                                                    Available until
                                                    Status
                                                    Pending
                                                    Credits
                                                    • 1.0 general
                                                    Available until

                                                    September 21, 2024 at 11:59PM HST

                                                    Status
                                                    Available
                                                    Credits
                                                    • 1.0 general
                                                    Available until

                                                    September 21, 2024 at 11:59PM HST

                                                    Status
                                                    Approved
                                                    Credits
                                                      Available until
                                                      Status
                                                      Not Offered
                                                      Credits
                                                      • 1.0 general
                                                      Available until

                                                      September 25, 2024 at 11:59PM HST

                                                      Status
                                                      Approved
                                                      Credits
                                                        Available until
                                                        Status
                                                        Not Offered
                                                        Credits
                                                          Available until
                                                          Status
                                                          Not Offered
                                                          Credits
                                                            Available until
                                                            Status
                                                            Not Offered
                                                            Credits
                                                              Available until
                                                              Status
                                                              Not Offered
                                                              Credits
                                                                Available until
                                                                Status
                                                                Not Offered
                                                                Credits
                                                                • 1.0 general
                                                                Available until

                                                                December 31, 2026 at 11:59PM HST

                                                                Status
                                                                Self Apply
                                                                Credits
                                                                  Available until
                                                                  Status
                                                                  Not Offered
                                                                  Credits
                                                                    Available until
                                                                    Status
                                                                    Not Offered
                                                                    Credits
                                                                    • 1.0 general
                                                                    Available until

                                                                    September 21, 2024 at 11:59PM HST

                                                                    Status
                                                                    Available
                                                                    Credits
                                                                      Available until
                                                                      Status
                                                                      Not Offered
                                                                      Credits
                                                                        Available until
                                                                        Status
                                                                        Not Offered
                                                                        Credits
                                                                        • 1.0 general
                                                                        Available until

                                                                        December 31, 2025 at 11:59PM HST

                                                                        Status
                                                                        Approved
                                                                        Credits
                                                                        • 1.0 general
                                                                        Available until

                                                                        September 21, 2024 at 11:59PM HST

                                                                        Status
                                                                        Available
                                                                        Credits
                                                                        • 1.2 general
                                                                        Available until

                                                                        January 16, 2025 at 11:59PM HST

                                                                        Status
                                                                        Approved
                                                                        Credits
                                                                          Available until
                                                                          Status
                                                                          Not Offered
                                                                          Credits
                                                                          • 1.0 areas of professional practice
                                                                          Available until

                                                                          September 21, 2024 at 11:59PM HST

                                                                          Status
                                                                          Available
                                                                          Credits
                                                                          • 1.0 general
                                                                          Available until
                                                                          Status
                                                                          Unavailable
                                                                          Credits
                                                                          • 1.0 general
                                                                          Available until

                                                                          September 21, 2024 at 11:59PM HST

                                                                          Status
                                                                          Available
                                                                          Credits
                                                                          • 1.0 general
                                                                          Available until
                                                                          Status
                                                                          Unavailable
                                                                          Credits
                                                                            Available until
                                                                            Status
                                                                            Not Offered
                                                                            Credits
                                                                            • 1.0 general
                                                                            Available until

                                                                            September 21, 2025 at 11:59PM HST

                                                                            Status
                                                                            Approved
                                                                            Credits
                                                                            • 1.0 general
                                                                            Available until
                                                                            Status
                                                                            Pending
                                                                            Credits
                                                                              Available until
                                                                              Status
                                                                              Not Offered
                                                                              Credits
                                                                                Available until
                                                                                Status
                                                                                Not Offered
                                                                                Credits
                                                                                  Available until
                                                                                  Status
                                                                                  Not Offered
                                                                                  Credits
                                                                                  • 1.0 general
                                                                                  Available until
                                                                                  Status
                                                                                  Pending
                                                                                  Credits
                                                                                  • 1.0 general
                                                                                  Available until
                                                                                  Status
                                                                                  Pending
                                                                                  Credits
                                                                                    Available until
                                                                                    Status
                                                                                    Not Offered
                                                                                    Credits
                                                                                    • 1.0 general
                                                                                    Available until

                                                                                    September 21, 2024 at 11:59PM HST

                                                                                    Status
                                                                                    Approved
                                                                                    Credits
                                                                                      Available until
                                                                                      Status
                                                                                      Not Offered
                                                                                      Credits
                                                                                      • 1.0 general
                                                                                      Available until

                                                                                      September 21, 2024 at 11:59PM HST

                                                                                      Status
                                                                                      Available
                                                                                      Credits
                                                                                        Available until
                                                                                        Status
                                                                                        Not Offered
                                                                                        Credits
                                                                                          Available until
                                                                                          Status
                                                                                          Not Offered
                                                                                          Credits
                                                                                            Available until
                                                                                            Status
                                                                                            Not Offered
                                                                                            Credits
                                                                                              Available until
                                                                                              Status
                                                                                              Not Offered

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