Key Takeaways from AML 2022

Updates on the fight against money laundering and financial crime

An effective anti-money laundering program is a critical tool to fight financial crime and protect the integrity of the capital markets and global financial system.

At SIFMA’s 2022 Anti-Money Laundering & Financial Crimes Conference, we heard from 50+ industry experts and keynotes by the U.S. Department of Justice and U.S. Department of the Treasury.

Our discussions centered around:

  • Sanctions: The allied response to Russia’s invasion of Ukraine is unprecedented and the navigation of broad sanctions rolled out at a breakneck pace has consumed us all.
  • AML Act: The Anti-Money Laundering Act of 2020 is the most significant piece of legislation in the past 20 years since the Patriot Act. The industry has noted its appreciation of FinCEN’s efforts to revitalize and modernize existing AML regulations.
  • Cryptocurrency: Firms are discovering how to manage AML risks and regulatory expectations in this rapidly evolving and exciting space.

The view from the industry

Ira Hammerman, Executive Vice President and General Counsel for SIFMA, opened our Conference by noting this group has been gathering for more than two decades which is in itself a testament to the industry’s efforts to work together, share information and best practices, and learn from each other – all with the goal of protecting our markets from illicit financial activity and staying a step or two ahead of t bad actors.

The following excerpt from his remarks summarizes our industry’s efforts and SIFMA’s work on behalf of our members:

“Over the past two years, our industry has successfully navigated how to continue safeguarding our financial system under unprecedented conditions, including through working from home, market volatility, the efforts of fraudsters to capitalize on the COVID-19 pandemic, and now, Russia’s invasion of Ukraine, which has resulted in unprecedented sanctions by the U.S. and our allies.

In addition, the digital world of cryptocurrencies has continued to evolve and capture the attention of the financial crime community. This explosion of interest among institutional and retail investors, as well as other players in this rapidly changing space creates opportunities but also risks, which we are reviewing in the context of today’s global climate.

At the same time, we have seen actions from regulators and policymakers that we hope will result in meaningful changes to the way we operate and engage in the future. This includes the Anti-Money Laundering Act, which became law on January 1st of 2021 and resulted in the first National AML/CFT priorities. We remain committed to helping our members incorporate them into their risk-based programs, and we continue to engage with the Treasury and other policymakers on new and modified requirements focused on mitigating financial crime risks across the securities industry.

The AML Act addresses other important topics as well, including greater information sharing and interagency coordination, a review of regulations for continued effectiveness, innovation and the use of technology—and perhaps most significantly—enhanced corporate transparency and alignment of the customer due diligence requirements for financial institutions. I know everyone in this room eagerly awaits how the Beneficial Ownership Database and changes to the CDD Rule will shake out.

With the ongoing crisis in Ukraine, firms have grappled with implementation of unprecedented U.S. and allied sanctions against Russia, following on the heels of sanctions the China Military Companies Sanctions and the sanctions against the Maduro regime in Venezuela. This significant development in the sanctions space, along with the other challenges your firms have faced over the past year, shows that it remains as important as ever to continue to share information and work together. And once again, SIFMA has been at the forefront in assisting our members as they navigate this ever-changing and more complex landscape.

All of this speaks to the tremendous time, diligence, and resources you and your firms devote to protecting our financial system. Working together—with the public sector, regulators, and industry as a whole—to ensure regulatory requirements effectively mitigate risk and to stay ahead of those seeking to exploit our financial system is paramount.”

The view from Treasury

Brian Nelson, Under Secretary for Terrorism and Financial Intelligence at the U.S. Department of the Treasury addresses SIFMA AML 2022

In remarks to the audience, Brian Nelson, the Under Secretary for Terrorism and Financial Intelligence at the U.S. Department of the Treasury, acknowledged “the compliance community is an indispensable partner in our efforts to respond decisively to Russia’s unprovoked war against Ukraine.” He provided the latest updates on the extraordinary financial measures to impose severe economic costs on the Russian Federation and its leadership, noting the work of AML and financial crime professionals “is vital to our national security.” He then turned to what Treasury considers the biggest illicit finance risks facing the United States and provided an overview of the priorities laid out in Treasury’s recently released National Illicit Finance Strategy. He highlighted one of those priorities is the ongoing work to understand and address the anti-money laundering and countering the financing of terrorism, or AML/CFT, risks related to investment advisers.

The view from DOJ

SIFMA AML 2022 - DAG Lisa Monaco with SIFMA's Ken Bentsen

Deputy Attorney General Lisa O. Monaco in conversation with SIFMA President and CEO Kenneth E. Bentsen, Jr. at SIFMA AML 2022

In a fireside chat, Deputy Attorney General Lisa Monaco stressed the importance of self-reporting to the Department of Justice. “If you take nothing else away from this,” she said, “self-reporting matters.”

DAG Monaco and Mr. Bentsen discussed DOJ’s efforts to combat financial crime on multiple fronts, including the newly formed Russian Elites, Proxies, and Oligarchs (REPO) multilateral task force (not that repo). Detecting, reporting, and prosecuting money laundering, terrorist financing, and other illicit activity uniquely involves a partnership between the financial industry and law enforcement, and information sharing is a crucial tool. She noted the increase of criminal activity in digital assets, comparing it to “water trying to find a crack.” Those seeking to hide their activity will use every new “shiny tool” to do it and the Department is closely monitoring this space alongside the financial institutions who are framing AML risks and controls around them.

With thanks to our Task Force

SIFMA is a member-driven organization; this event was planned by our 2022 Conference Planning Task Force. Their collective expertise brought together in-depth discussions on SARs, market volatility, model risk and oversight, emerging risk management, data analytics and case studies, including a special presentation by Jarod Koopman, Acting Executive Director, Cyber and Forensic Services and Director, Cyber Crime for the IRS.

I’ve attended this event for years, but this was my first opportunity to serve as staff advisor and work alongside our Anti-Money Laundering and Financial Crimes Committee co-chairs, Justin Mendelson and Adrienne Kosta. With gratitude for their service to the industry and the financial system, I would like to recognize members of the Task Force:

  • Nicole De Bello, Executive Director, Morgan Stanley
  • Margaret Edmunds, Director of AML and Corporate Compliance, Baird
  • Jim Fiebelkorn, BSA/AML Program and Sanctions, Charles Schwab & Co and Charles Schwab Bank
  • Sarah Green, Global Head of Financial Crimes, Vanguard Group Inc.
  • Adrienne Kosta, Vice President, Anti-Money Laundering Officer, Fidelity Investments
  • Catherine LaFalce, Managing Director, Global AML Compliance, Citigroup Global Markets
  • Justin Mendelsohn, Head of AML and Sanctions, Fidelity Digital Asset Services, Fidelity Investments
  • Robert Molloy, Chief AML Officer, Raymond James Financial
  • Jeffrey Weiss, Head of Financial Crimes, Robinhood Financial LLC
  • Alan Williamson, Director, Business Oversight Compliance, Barclays Investment Bank Americas
  • Meg Zucker, Global Anti-Money Laundering Head, RBC Capital Markets LLC

Bernard Canepa is a Managing Director and Associate General Counsel in SIFMA’s Office of General Counsel, where he works on a variety of legal and policy issues. He monitors and keeps SIFMA members apprised of relevant developments, engages in ongoing dialogue with regulators, and advocates industry positions.