Beyond banks: AML Compliance casts wide net


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AML Compliance issues and enforcement are starting to catch the attention of businesses beyond traditional banking, according to a new Wall Street Journal report.

Federal authorities are stepping up enforcement actions against commercial and retail banks and money-services businesses, and they are also starting to hint at possible extensions of AML enforcement into other business types, as well, particularly with regard to expectations for adequate internal controls.

Casinos, for example, are drawing more scrutiny as evidenced by a $47 million settlement last year involving the Las Vega Sands, and FinCEN also reported fining a casino vice president at a Northern Mariana Islands location for failure to comply with AML requirements, according to reporter Rachel Louise Ensign. Brokers and insurance companies are also drawing more AML scrutiny.

“Many people do not realize that whole-life policies are a pseudo bank account that you can deposit money into and get interest from,” according to AML Partners CEO Frank Cummings. “Offering this type of service to customers makes insurance companies subject to the BSA under the broad definition of a financial-services company. Also, like all businesses and individuals in the U.S., they are subject to OFAC regulations and sanctions compliance. These companies need to pay careful attention to CDD solutions and related AML Compliance.”

Another new area subject to the BSA is the virtual-payments services such as Bitcoin, Facebook Payments, MoneyGram, Amazon Payments, and so on. The development of virtual currencies and virtual-payment services has created new opportunities for money laundering and efforts to ramp up Compliance and enforcement efforts of these businesses.

The rise of legal marijuana shops in some states further complicates AML Compliance as these drug-related businesses seek access to banking services even though federal law still prohibits drug sales.