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On Wednesday, April 28, 2022, at 10:00 a.m. (ET) full Committee Chairwoman Waters and Ranking Member McHenry will host a hybrid hearing entitled, “Oversight of the Financial Crimes Enforcement Network.”
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Witness for this one-panel hearing will be:
• Mr. Himamauli “Him” Das, Acting Director, Financial Crimes Enforcement Network (FinCEN)
Overview of the Financial Crimes Enforcement Network
Established in 1990, FinCEN is a bureau within the U.S. Department of the Treasury that is responsible for “safeguard[ing] the financial system from illicit use, combat[ing] money laundering and its related crimes including terrorism, and promot[ing] national security through the strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.”
FinCEN serves as one of the primary agencies responsible for implementing, administering, and enforcing compliance with the Bank Secrecy Act (BSA) and other statutes collectively encompassing the U.S. legal regime for anti-money laundering and countering the financing of terrorism (AML/CFT). This includes developing regulations and policies that require banks and other financial institutions (FIs) to safeguard the U.S. financial system from illicit activity. In addition to its BSA oversight and rulemakings, FinCEN engages with the private sector, federal regulators, law enforcement, and the international community on AML/CFT matters. FinCEN also serves as the U.S. Financial Intelligence Unit (FIU), one of more than 167 such entities worldwide that are connected through the Egmont Group to share financial information and expertise with foreign counterparts.
As part of its mission, FinCEN collects and maintains a central repository of financial intelligence (e.g., financial transaction data, including suspicious activity reports [SARs] and currency transactionreports [CTRs]) from FIs. FinCEN analyzes and disseminates such information to FIs, law enforcement agencies, and other authorized recipients in support of investigations pursuing perpetrators of white-collarcrime; drug trafficking and other transnational criminal activity; sanctions evaders; and terrorism and other matters of national security concern. The “follow the money” approach to federal criminal investigations, built in part on the basis of financial intelligence collected by FinCEN and accessed by various law enforcement agencies, contributes to a substantial number of money laundering-related convictions each year. In FY2021, FinCEN received approximately 23 million BSA-mandated financial transaction reports, including approximately 3.5 million SARs.
The Anti-Money Laundering Act of 2020
On January 1, 2021, when Congress overrode a presidential veto to pass the FY2021 National Defense Authorization Act (NDAA), it achieved the most sweeping anti-money laundering reforms in decades, the Anti-Money Laundering Act of 2020 (AMLA2020). AMLA2020 also contains the landmark Corporate Transparency Act (CTA) which, for the first time, imposes a federal requirement for identifying beneficial owners of certain corporate entities. Implementation of AMLA2020’s improvements to theexisting AML/CFT framework under the BSA are a FinCEN priority, with several dozen reports, rulemaking processes, and other actions required.8 This testimony, the first of five AMLA2020-mandated annual hearings, is designed to review progress and recommendations of the AMLA2020 implementation. (See Annex II for a AMLA2020 deliverables table developed by the Congressional Research Service.)
AMLA2020 included authorization of appropriations for FinCEN and Special Hiring Authority for Treasury’s Office of Terrorism and Financial Intelligence (which includes FinCEN) to execute the AMLA2020 mandates. Congress appropriated $161 million for FinCEN for FY 22, $29.5 million below the total funding request for the agency. At this finding level the agency will be able to hire about four new full-time employees (FTE), rather than the 80 FTE planned for AMLA2020 implementation. The President has requested an increase of $49.3 million over FY 22 enacted levels to provide funding to fully implement AMLA2020 and CTA implementation.
Reports Required by AMLA2020
AML/CFT priorities. Among those required by AMLA2020 is Section 6101(b)(2)(C), which requires the Secretary of the Treasury to “establish and make public priorities” for AML/CFT policy, to be updated at least once every four years.9 Designed to assist FIs in determining where to focus theirAML/CFT resources, pursuant to this mandate, FinCEN issued its first list of AML/CFT….
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