What You Need to Know About The AML/CFT National Priorities

Corruption

The first priority is domestic and international corruption. Corruption weakens democracies and economies by perpetuating conflict and threatening the national security of a nation. Bad actors may take advantage of vulnerabilities in a financial institution to launder funds obtained through illicit activities. Addressing the money laundering risks associated with both domestic and international corruption will help mitigate such actions.

Cybercrime

The second AML/CFT national priority posed by FinCEN is cybercrime. The most renowned forms of cybercrime are threats like phishing, social engineering, and network attacks. Cybercriminals pose a significant threat to financial institutions; they target financial systems to gain access to client and institution private information. FinCEN is interested in the misuse of virtual assets for illegal activities.

Terrorist Financing

Both domestic and international terrorist groups are a focus for FinCEN. Terrorists require funding through illicit activities to conduct operations and other activities, such as the recruitment of new members.

Fraud

The majority of money laundering comes from fraudulent activity, such as romance scams or healthcare scams, such as COVID-19 benefit-related schemes.

Transactional Criminal Organization Activity

Organizations involved in criminal activities, such as human trafficking or weapons smuggling, is of priority to FinCEN.

Drug Trafficking Organization Activity

Illegal drugs continue to generate significant illegal proceeds for drug trafficking organizations. The proceeds, as well as the drugs, may be laundered into the United States.

Human Trafficking & Human Smuggling

As FinCEN notes, financial activity through human trafficking can intersect with the financial system at any time through the process. Human trafficking groups launder funds in a variety of ways, from cash smuggling by a victim to the movement of large amounts of illegal proceeds through shell corporations.

Proliferation Financing

Funds used in connection with the purchase or sale of weapons of mass destruction is the final priority from FinCEN. Financial institutions are vulnerable to the transfer of illicit funds through shell companies.

In Closing

As stated above, FinCEN has stressed that until regulations have been finalized, institutions do not have to incorporate these AML/CFT priorities into their existing AML programs. However, once the regulations have been implemented, institutions should be prepared to demonstrate the processes they do to address these priorities.