2016 BSA Coalition Anti-Money Laundering Conference

Panama Papers – Nothing New says John Byrne of ACAMS

“What the Panama Papers are showing us is nothing new,” commented John Byrne, Executive Vice President of the Association of Certified Anti-Money Laundering Specialists, during this year’s BSA Coalition Anti-Money Laundering Conference. As Keynote speaker of the event, John covered various important topics on anti-money laundering but perhaps the most recognized was the Panama Papers, which represent the release of thousands of documents evidencing the formation of shell companies for celebrities and others around the world by a Panamanian law firm. John pointed out that using shell companies to evade taxes has been occurring for years. He suggested that until tax evasion becomes a predicate offense for money laundering and stronger controls are required for corporate formation in our country, shell companies will continue to be used for illicit purposes. John also offered some unique solutions for financial institutions that are cutting ties to companies with perceived risk – also known as “de-risking” – such as money services businesses. For example, the Government could offer incentives and/or safe harbors for financial institutions to retain certain accounts. Also, John suggested that the Government or another body could implement a third party validation or certification process for the perceived high-risk entities.

The Richmond Fed’s Chris Noack led a group of panelists, which included a bank lender, through a discussion about the importance and benefits of communication between the BSA/AML function and other business lines, particularly the loan business line. The panelists recommended that BSA/AML officers should:

  • understand their customers from a holistic perspective and know what products, across all business lines, the customers have engaged in;
  • communicate with lenders using their language not yours; and
  • be open to receiving information from loan officers on their customers in different forms. So, if you require loan officers to use a form to provide you with information, be open to accepting a phone call occasionally or an email that might work better for them.

Brad Rustin, attorney with Nelson Mullins Riley & Scarborough, LLP, and other speakers offered best practices for achieving a successful merger between institutions from an AML perspective. Brad emphasized the importance to the Federal Reserve Board of a clean BSA record in garnering regulatory approval for a merger. Director of AML Compliance at South State Bank Rebecca Robertson stated that getting the BSA function involved at the front end was key to a successful merger. She commented, “Make sure you get a seat at the table at the beginning of the merger process.” Debra Eshbaugh of BankersToolbox offered helpful tips for making good decisions about how to handle automated systems during a merger.

Law enforcement officers from the FBI, DOJ, FinCEN as well as OFAC talked about their agencies’ missions and current priorities as well as a host of other topics. Speakers highlighted the use of technology to be more efficient in carrying out their objectives. Patrick Fallon, Section Chief of Financial Crimes at the FBI, discussed the significant efficiencies his agency had gained by being able to mine SAR data electronically. John de la Garza, AUSA from the Department of Justice, agreed commenting that this had also benefitted SAR review groups from around the country. Andrea Gacki, Acting Deputy Director at OFAC, discussed an improved and integrated search engine on its website to perform OFAC searches.

The regulators spent some time discussing customer due diligence, commenting on its importance in creating and maintaining a successful BSA/AML compliance program. The speakers provided a high-level overview of the recently passed FinCEN customer due diligence rule including beneficial ownership. The rule requires financial institutions to ascertain and document the true owners behind the companies that are their customers. The idea is that this intelligence may help U.S. law enforcement understand the sometimes opaque ownership structures of shell companies that can be used to disguise illicit financial dealings. The regulators also gave their perspective on de-risking, emphasizing that the decision to bank or not to bank a customer was that of the financial institution.

The Richmond Fed annually hosts the BSA Coalition Anti-Money Laundering Conference to help industry experts, law enforcement and regulators stay on top of new trends, laws and regulations. Ally Financial and Union Bank and Trust sponsor the day-long event.

Elaine Rudolph Yancey, CAMS, MBA, is a Managing Examiner in the Supervision, Regulation and Credit Department of the Richmond Fed. She is also the Regulatory Advisor to the BSA Coalition.

Download materials

2016 Conference Agenda (1.2mb pdf)

Keynote: AML Mid-Year Review (536k pdf)
John J. Byrne

BSA/AML, Fraud and Loans: What Should You Be Doing to Make the Connection? (133k pdf)
Moderator: Chris Noack

BSA and OFAC Enforcement: How Law Enforcement Is Integrating Its Approach to Meet Current Threats (55k pdf)
Moderator: Laura Columbell Marshall

How to Survive a Merger: The AML Perspective (341k pdf)
Moderator: Rebecca Schauer Robertson

Regulatory Town Hall (136k pdf)
Moderator: Elaine Yancey