Nikhil Gore is quoted in Law360 regarding FinCEN’s recently announced priorities for anti-money laundering rules to combat the financing of terrorism. Nikhil says the priorities seemed too broad for firms to take meaningful action. “It may be hard for banks to use them to identify the pieces of their AML program that should receive focused resources and attention,” he adds.
He notes that FinCEN was under a tight deadline, as the bureau was required to furnish the priorities within 180 days of the AML Act's Jan. 1 enactment. He also says that, despite the broad strokes, there were still some notable takeaways in the priorities that companies may want to start taking a closer look at.
“One takeaway for financial institutions is to assess their exposure to corruption risk across a range of businesses, whether that be private banking [or] investment banking transactions for state entities,” he adds.
He also pointed to the section on virtual currency, nestled along with cybercrime and cybersecurity, as particularly topical. Regulators have grappled with the regulation of cryptocurrency as it's been thrust into the mainstream, embraced even by financial giants. “Banks are facing a lot of demand for virtual currency services.”
“It's a question of having the right process and governance around new product approval processes,” he says. “I think one thing that regulators will look for is what kind of governance and process documentation you have around the new product offering to demonstrate that you took a thoughtful approach.”
“This is another reminder that countering the financing of terrorism no longer means targeting foreign-based terrorists, but to an almost equal extent you should [be aware of] domestic terrorists,” Nikhil says.
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