The U.S. financial institutions that are subject to the Financial Crimes Enforcement Network’s (FinCEN’s) new customer due diligence (CDD) Rule were required to comply with revised risk-based procedures and beneficial ownership obligations from 11 May 2018. Similarly, by 15 April 2018, New York State-licensed financial institutions were required to file their first annual certifications attesting to the sufficiency of their transaction monitoring and filtering systems as required by the New York Department of Financial Services’ (NYDFS) regulation.
Federal regulators published guidance on the application of customer identification program (CIP) requirements to holders of prepaid cards and other types of prepaid -instruments. Five federal agencies—the Federal Reserve, FDIC, OCC, National Credit Union Administration (NCUA), and FinCEN—issued the guidance to clarify when a bank should apply its CIP procedures for prepaid cardholders. The guidance also covers how the CIP rules apply to payroll, government benefit, and health benefit cards. The NYDFS finalized AML regulations effective from 1 January 2017, in a risk-based act that requires institutions to monitor transactions for Bank Secrecy Act (BSA) and AML violations, and prevent transactions with sanctioned bodies. A number of international banks, such as Habib Bank, have been sanctioned for non-compliance, with fines totaling $225 million. The second new step in compliance is that a bank’s chief compliance officer, board of directors or other senior-ranking executives must provide the NYDFS an annual certification of compliance with the new rules starting from April 2018. Further, the Commodity Futures Trading Commission’s (CFTC’s) Division of Enforcement has recently created a Virtual Currency Task Force.