On June 30, 2021, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued, for the first time, a list of priorities for anti-money-laundering and countering the financing of terrorism (“AML/CFT Priorities”). The list highlights the most significant AML/CFT threats facing the United States and provides notice to covered institutions of certain upcoming AML compliance requirements with respect to such threats.  In addition to the publication of the AML/CFT Priorities, on July 6, 2021, FinCEN also appointed Michelle Korver as its first-ever Chief Digital Currency Advisor. 

The AML/CFT Priorities, the first ever issued by FinCEN, come pursuant to a significant overhaul of US anti-money-laundering laws under the Anti-Money Laundering Act of 2020 (the “AML Act”), passed by Congress in January.  Among other important changes, this new legislation required FinCEN to establish a strategy to counter money-laundering and terrorism financing and publish a list of enforcement priorities once every four years.  This list is intended to outline the key threats facing covered institutions,¹ help such institutions prioritize use of their compliance resources, and outline informational resources to assist them in managing their risks.

The list published on June 30 identifies the following AML/CFT Priorities:

• Corruption;
• Cybercrime;
• Foreign and domestic terrorist financing;
• Fraud;
• Transnational criminal organization activity;
• Drug trafficking organization activity;
• Human trafficking and human smuggling; and
• Proliferation financing.

In conjunction with the AML/CFT Priorities, FinCEN also issued two statements, clarifying the impact of the new publication on nonbanking financial institutions (“NBFI”) and banks.  As outlined therein, the issuance of these AML/CFT Priorities does not result in immediate changes to existing requirements or supervisory expectations under the Bank Secrecy Act.  Instead, FinCEN stated it will issue revised regulations to address the incorporation of the AML/CFT Priorities in the coming months. 

As a result, covered institutions are not required to incorporate the AML/CFT Priorities into their compliance programs until the effective date of the revised regulations.  Covered institutions will also not be subject to examination or supervision with respect to such incorporation, as required under the AML Act, until that time. 

Nevertheless, FinCEN’s guidance recommends that institutions start considering how to incorporate the AML/CFT Priorities into their compliance programs prior to the effective date of such regulations by assessing the risks arising from the products and services they offer, the customers they serve, and the geographies in which they operate. 

Perhaps highlighting FinCEN’s increased focus on cryptocurrency, on July 6, 2021, the agency also appointed Michelle Korver as its first-ever Chief Digital Currency Advisor.  Ms. Korver formerly served as Digital Currency Counsel at the Criminal Division of the US Department of Justice.  In her new role, Ms. Korver will lead FinCEN’s work with internal and external partners in developing and implementing strategies to prevent and mitigate illicit financial practices involving digital currency.

Dentons will continue to monitor FinCEN developments, including regulatory guidance at both the state and federal levels, and provide updates as regulations implementing the AML/CFT Priorities are issued.

1. Covered institutions include all financial institutions required by the Banking Secrecy Act to maintain an AML program.  This includes banks, banks without a federal functional regulator, casinos and card clubs, money services businesses, brokers or dealers in securities, mutual funds, insurance companies, futures commission merchants and introducing brokers in commodities, dealers in precious metals, precious stones, or jewels, operators of credit card systems, loan or finance companies, and housing government sponsored enterprises. ↩