‘Money Services Businesses’ Regulations: Lessons from Brink’s Compliance Failures
Money services businesses (MSBs) face substantial regulatory requirements under the Bank Secrecy Act (BSA). Brink’s Global Services USA, Inc. recently found itself in hot water when FinCEN revealed that the company ignored critical rules for money transmitters. This case study offers a window into the challenges that MSBs encounter—and the steep consequences of noncompliance.
Brink’s violations of Money Services Businesses regs
Brink’s operated as a money transmitter, engaging in domestic and cross-border currency shipments without registering as an Money Services Business (MSB). The company exceeded the narrow exemptions available to armored car services. Instead of adjusting its practices when law enforcement flagged potential risks, Brink’s continued to move bulk currency—totaling nearly $800 million—without taking the steps required to verify the source of funds or confirm transaction legitimacy.
Skipping the AML Essentials for MSBs
In today’s regulatory climate, an effective anti-money laundering (AML) program isn’t optional. Brink’s neglected to develop and maintain a robust AML program that could identify suspicious activities and prevent potential money laundering. According to FinCEN, the company missed critical opportunities to conduct proper Know Your Customer (KYC) checks and to file suspicious activity reports (SARs), even when employees raised red flags about questionable shipments and fake flight numbers.
High stakes and heavier consequences
FinCEN’s investigation unearthed a series of violations. The agency calculated a civil money penalty of $37 million, with Brink’s ultimately agreeing to pay $17 million after credits to the Department of Justice. The order emphasizes that Brink’s not only broke the registration rules but also jeopardized the U.S. financial system by enabling unchecked flows of bulk currency from high-risk sources.
A Wake-Up Call for Money Services Businesses
This enforcement action underscores the complexities of MSB regulations and the importance of proactive compliance. The Brink’s case reminds financial service providers that diligent registration, rigorous AML controls, and robust reporting mechanisms form the backbone of a secure and compliant operation. Companies must continuously assess and adapt their practices to safeguard against risks, protect the financial system, and avoid costly penalties.
Brink’s missteps highlight that strong internal controls and a commitment to regulatory best practices not only protect the company’s bottom line but also reinforce the integrity of the broader financial system.
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