The latest survey of attitudes among anti-money-laundering practitioners has uncovered some interesting data. The US Financial Crimes Enforcement Network wants to introduce three 'definitions' of an 'effective and reasonably designed' compliance programme, but compliance officers are wary of the concept.
The survey was conducted by the American Association of Certified Anti-Money Laundering Specialists. About nine-tenths of survey respondents thought that a hike in the use of IT that improves compliance controls was important in the creation of an “effective and reasonably designed” compliance programme. The phrase that ACAMS used was "increased adoption of technological tools that can improve compliance controls and/or free up resources;" 88% of people thought that this was important; 8% thought that it was somewhat important; and 4% thought it not important.
A hefty 85% thought that "more specific feedback from governmental authorities on how to improve compliance reporting" was important, with 12% thinking it somewhat important and 3% thinking it unimportant. For the availability of additional compliance funding and resources, the figures were 81%, 14% and 5%. For "regulatory amendments and supervisory reforms that give institutions more discretion to focus on their biggest crime risks, even if it means directing fewer resources toward addressing lesser risks," the figures were 79%, 16% and 5%. For further guidance and examples from regulatory bodies on activities not required by law or regulation or that make limited contributions to meeting risk-management objectives, the figures were 76%, 18% and 8%.
Respondents were also keen to elicit more guidance from governmental authorities about how best to deploy compliance resources to address the priorities of law enforcement and regulatory officials, with 73% thinking this very important, 19% thinking it somewhat important and 8% thinking it unimportant.
An enormous 79% thought that the periodic publicising of national AML priorities by government bodies - done in the UK through national risk assessments - would be helpful to them while they were shaping their compliance policies. It is worth noting, however, that 12% were not sure about this and 9% were not interested in reading 'NRAs.'
Feedback from FinCEN
The US Financial Crimes Enforcement Network featured heavily in the questions of the survey, despite 50% of respondents coming from outside the United States.
Respondents were not particularly convinced that the revelations of the FinCEN Files would have a net positive effect on global efforts to fight financial crime. Only 43% thought that the effect would be positive; 27% thought that it would be negative; 18% thought neither; and 11% were unsure.
FinCEN believes that there are three elements to an effective AML programme - (1) the assessment and management of risk; (2) compliance with the Bank Secrecy Act 1970; and (3) the reporting of information with a high degree of usefulness to the government. Of the 342 AML people who responded to this, 61% called for more guidance from FinCEN about the meaning of its statement, 29% thought that FinCEN's statement was adequate and 9% did not know whether it was adequate.
FinCEN is proposing to impose this three-pronged definition of a good AML programme on firms but has not done so yet. Only 58% of people were sure that their AML efforts detected "institution-specific risk," in line with FinCEN's wishes, while 23% said that they detected it partially and 17% did not know.
Predictions about the effect of implementing an “effective and reasonably designed” AML programme, as defined by FinCEN's three elements, varied among respondents; over a third said that it would increase their burdens slightly, with a further fifth saying that it would require significant resources.
The regulator is also thinking of issuing "strategic AML priorities" every two years, which sounds burdensome. It has stated this in a notice of proposed rulemaking.