Bank Group Asks For More Leeway To Fight Money Laundering

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) should let banks share their reports of suspected money-laundering activity with their foreign branches and affiliates, payments association The Clearing House argued in a letter to FinCEN on Friday (March 13).

That’s not currently allowed under guidance that FinCEN issued in 2010 that was originally intended to preserve confidentiality of the Suspicious Activity Reports (SARs) by limiting their access to branches and affiliates in the U.S.

But five years later, the restrictions are making it harder for U.S. banks to meet anti-money laundering (AML) and anti-terrorist financing requirements, wrote Clearing House President Paul Saltzman.

“A less restricted flow of AML information within a banking enterprise would result in: (1) better transaction monitoring; (2) higher quality SARs; (3) better information for law enforcement investigations; (4) better knowledge of international money laundering and terrorist financing trends; (5) easier implementation of a risk-based, enterprise-wide approach to AML; and (6) efficiencies in the process of preparing SARs, greater uniformity in SARs filed by a banking enterprise, and minimization of duplicative SAR filings,” Saltzman said in the letter.

Saltzman suggested that banks could maintain necessary confidentiality by only sharing SARs with branches and affiliates that are located in a country that’s part of the Financial Action Task Force or has a written confidentiality agreement with the U.S. bank. He also asked for FinCEN confirmation that, even without the change, banks can share the underlying facts, transactions and documents that a SAR is based on, as long as they don’t reveal the existence of the SAR.

The Clearing House letter comes after a series of investigations and penalties against global banks for failing to spot suspicious activity, with Citibank’s Banamex subsidiary being the most recent U.S.-owned bank to capture FinCEN’s attention. New York banking regulators also fined Standard Chartered Bank $300 million in 2014, after the bank failed to correct problems that resulted in a $340 million fine in 2012.


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