The US treasury department has issued the 2020 National Strategy for Combating Terrorist and Other Illicit Financing, to provide a roadmap to modernise the country’s anti-money laundering/countering the financing of terrorism (AML/CFT) regime to make it more effective and efficient.
The strategy identifies key threats, vulnerabilities, and priorities for disrupting and preventing illicit finance activities within and transiting the US financial system.
The most significant vulnerabilities in the US exploited by illicit actors include the lack of a requirement to collect beneficial ownership information at the time of company formation and after changes in ownership.
The significant volume of foreign funds and number of transactions that are intermediated through US correspondent banks and extensive use of US currency domestically and internationally are also seen as posing a threat.
Other dangers include the growing misuse of digital assets and failure of foreign jurisdictions to effectively supervise digital asset activity.
These vulnerabilities will be addressed as priorities and will be supported by a number of enabling actions, including legislative proposals on beneficial ownership.
Another action is aimed at expanding AML/CFT obligations to certain “uncovered” financial institutions currently not required to comply with those obligations.
Scope and purpose
The strategy was prepared by the Office of Terrorist Financing and Financial Crimes, in consultation with the many agencies, bureaus, and departments of the federal government that also have roles in combating illicit finance.
The strategy is aimed at financial institutions with documents to help them inform their own risk assessments and regulators so they can assess whether AML/CFT compliance is tailored to the risks faced by the entities they supervise.
The 2020 National Strategy for Combating Terrorist and Other Illicit Financing, can be found here.
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