On December 2, 2020, the ‘‘William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021’’ was passed by the U.S. House of Representatives. The Act includes DIVISION F (ANTI-MONEY LAUNDERING). This Division is cited as the ‘‘Anti-Money Laundering Act of 2020’’.
Of significance is the legislative requirement that Corporations and Limited Liability Companies disclose to law enforcement, financial institutions, and the U.S Treasury, the ultimate beneficial owner (UBO) that owns and controls an entity.
The purpose of the AML Act of 2020 is:
- to improve coordination and information sharing among the agencies tasked with administering anti-money laundering and countering the financing of terrorism requirements, the agencies that examine financial institutions for compliance with those requirements, Federal law enforcement agencies, national security agencies, the intelligence community, and financial institutions;
- to modernize anti-money laundering and countering the financing of terrorism laws to adapt the government and private sector response to new and emerging threats;
- to encourage technological innovation and the adoption of new technology by financial institutions to more effectively counter money laundering and the financing of terrorism;
- to reinforce that the anti-money laundering and countering the financing of terrorism policies, procedures, and controls of financial institutions shall be risk-based;
- to establish uniform beneficial ownership information reporting requirements to (A) improve transparency for national security, intelligence, and law enforcement agencies and financial institutions concerning corporate structures and insight into the flow of illicit funds through those structures; (B) discourage the use of shell corporations as a tool to disguise and move illicit funds; (C) assist national security, intelligence, and law enforcement agencies with the pursuit of crimes; and (D) protect the national security of the United States; and
- to establish a secure, nonpublic database at FinCEN for beneficial ownership information.
Financial Institutions ought to get ready to receive and process more information
Compliance Professionals have become a gate keeping source of regulatory information for Financial Institutions facing changing challenges from day to day. When implemented, the AML Act of 2020 should simplify the tasks of Compliance Professionals through automatic disclosure of UBO information to stakeholders.
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