The US Department of Justice (DOJ) has been given much more authority to combat money laundering due to the Anti-Money Laundering Act of 2020 (AMLA). It is consistent with recent statements made by the US administration about combating corruption as a key national security concern with an emphasis on limiting corrupt individuals’ ability to exploit US and global financial institutions to conceal assets or launder criminal proceeds.

The AMLA expands the DOJ’s authority to subpoena the documents of foreign banks having US-based correspondent accounts. Any records “relating to the correspondent account or any foreign account at the foreign bank” may now be requested by the DOJ. Losing access to US banking services is one of the consequences of non-compliance, along with heavy fines.

The Financial Crimes Enforcement Network, an anti-money laundering division of the US Treasury Department, is required to receive beneficial ownership information from certain businesses licensed to conduct business in the US under the AMLA.

What Is the US Anti-Money Laundering Act (AMLA)?

The most significant anti-money laundering law passed by Congress in many years is the Anti-Money Laundering Act of 2020 (AMLA). The National Defense Authorization Act, which took effect on January 1, 2021, includes AMLA, which in turn includes the Corporate Transparency Act (CTA). According to the CTA requirements of the AMLA, the Financial Crimes Enforcement Network (FinCEN) is permitted to gather data on beneficial ownership and disclose it to the proper parties, such as federal law enforcement.

What Does AMLA Provides?

The AMLA (which also includes the CTA) provides:

• Creation of a database for beneficial ownership registration,
• Increased power to summon foreign banks,
• Additional sanctions for falsifying information or withholding it,
• Simplified automated reporting of simple suspicious conduct,
• Increased protections and rewards for whistleblowers,
• Increased regulatory vigilance,
• Establishing AML authority at the national level,
• Exchange of information with international branches, subsidiaries and affiliations,
• Further government evaluations, research, reports, and regulations.

How Does AMLA Impact Compliance Programs and Reporting?

The AMLA demands that national priorities be set by the Treasury Department to improve anti-money laundering and counter-terrorism funding. Financial institutions are also required by the AMLA to include the highlighted priorities in their risk-based AML compliance strategies. Regulators will be urged to check whether an institution’s AML plans adhere to the stated national priorities doing so.