Under Secretary of the U.S. Treasury for Terrorism and Financial Intelligence Sigal Mandelker highlighted the Department's efforts to ensure that the Anti-Money Laundering/Combating the Financing of Terrorism ("AML/CFT") framework is aligned to match the constantly-evolving nature of financial crime.

In remarks at the ABA/ABA Financial Crimes Enforcement Conference, Ms. Mandelker focused on three broad Treasury efforts: (i) working with key stakeholders to bolster its AML/CFT regime (including by fostering private sector innovation), (ii) alleviating vulnerabilities associated with advancing technologies, such as virtual currencies, and (iii) improving its enforcement program by providing clarity as to compliance expectations.

Ms. Mandelker highlighted the increasing importance of maintaining robust AML/CFT safeguards, citing the Treasury's Iran-related designations. Ms. Mandelker noted that FinCEN has ramped up its issuance of advisories to deal with various illicit financial threats, including illicit financial risks dealing with North Korea, Venezuela and Nicaragua, political corruption in South Sudan, and real estate transactions.

Ms. Mandelker urged the private sector to pursue innovative approaches, referring to a recent joint statement issued by several federal banking agencies as "one product of our broader efforts to work with its regulatory counterparts to modernize and strengthen the AML/CFT framework."

Ms. Mandelker added that to aid the compliance community in strengthening defenses against sanctions violations, the U.S. Treasury's Office of Foreign Assets Control ("OFAC") will be outlining "the hallmarks of an effective sanctions compliance program." According to Ms. Mandelker, these include:

  • ensuring senior management commitment to compliance;
  • conducting risk assessments to identify and mitigate sanctions-specific risks within an institution and its products, services and customers;
  • developing internal controls, including policies to identify, report and maintain records related to activity prohibited by OFAC's regulators;
  • engaging in testing and auditing to identify and fix weaknesses; and
  • providing all relevant personnel with tailored training on OFAC obligations and authorities more broadly.

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