Welcome to the October 2024 edition of FinScan’s Regulatory Roundup. In this update, we cover key regulatory developments from September, including enforcement actions related to anti-money laundering (AML), sanctions updates from OFAC, HM Treasury and the G7, and important advancements in AI governance and risk management. Stay informed on the latest trends and compliance requirements to help navigate the evolving regulatory landscape.
ANTI-MONEY LAUNDERING
OCC issues enforcement action against Wells Fargo Bank
The Office of the Comptroller of the Currency (OCC) today entered into a Formal Agreement with Wells Fargo Bank, N.A. The agreement identifies deficiencies relating to the bank’s financial crimes risk management practices and anti-money laundering internal controls in several areas.
Federal Reserve Board issues enforcement actions with United Texas Bank
The Fed has issued a cease-and-desist order against United Texas Bank for significant deficiencies in the bank’s corporate governance and oversight by its board of directors and senior management, and other deficiencies related to foreign correspondent banking and virtual currency customers.
FinCEN publishes BOI reporting and education toolkit
FinCEN has issued another resource to help familiarize small business owners with beneficial ownership reporting requirements mandated by the Corporate Transparency Act. The toolkit contains templates and sample content that has been structured to allow private, public, and non-profit organizations to share and amplify this important information.
FINTRAC imposes monetary penalty on real estate broker
FINTRAC’s penalties on 1000085532 Ontario Inc., also operating as Right At Home Realty Inc. and Right at home Realty, were due to its failure to develop and implement policies and procedures for KYC requirements, assess and document money laundering or terrorist financing risks, and conduct required reviews of policies, risk assessments, and training programs.
UK taking a targeted and outcomes-based approach to tackling financial crime
This speech by Sarah Pritchard, the FCA’s executive director, markets and executive director, international at the Financial Crime Summit, London outlines the UK’s approach to fighting financial crime over the next three years as sharing data and intelligence become vital tools in staying one step ahead.
OPBAS: improvements needed amongst anti-money laundering supervisors
The FCA’s Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has found that while most Professional Body Supervisors (PBS) are complying with money laundering regulations, how they supervise is still not consistently effective. In fact, none of the PBSs assessed were fully effective in all areas.
SANCTIONS
OFAC issues an alert on Russian attempts to evade sanctions
OFAC has warned foreign jurisdictions and financial institutions about Russia’s attempts to evade sanctions by opening new overseas branches and subsidiaries of Russian financial institutions. Russia is increasingly using third countries to evade sanctions and continue procurement to support its military-industrial base.
OFAC adopts final rule clarifying process for issuing blocking orders
OFAC is adopting a final rule to clarify OFAC’s process for issuing certain orders that block or identify as blocked specific property or interests in property, or that impose other prohibitions less than full blocking with respect to specific property or interests in property.
HM Treasury’s OFSI fines property manager for Russia sanctions violations
The Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, fined a UK company, Integral Concierge Services Limited (ICSL), £15,000 for breaking rules under the Russia (Sanctions) Regulations 2019. This penalty was issued under the Policing and Crime Act 2017.
G7 updates guidance on preventing Russian export control and sanctions evasion
The G7 has updated its guidance to include a list of items which pose a heightened risk of being diverted to Russia, updated red flag indicators of potential export control and/or sanctions evasion, best practices for the industry to address these red flags, and screening tools and resources to assist with due diligence.
ARTIFICIAL INTELLIGENCE
NIST launches new program for managing risks in the age of AI
To ensure a sustained focus on cybersecurity—such as mitigating AI-enabled cyber threats, using AI to improve cybersecurity tools and capabilities, and ensuring AI systems are protected from traditional and emerging cybersecurity threats, and other important topics—NIST is establishing a program for the cybersecurity and privacy of AI and the use of AI for cybersecurity and privacy.
100+ companies sign EU AI Pact pledges to drive trustworthy and safe AI development
Over 100 companies have signed the EU AI Pact, agreeing to its voluntary pledges. These commitments include early adoption of the AI Act, focusing on three core actions: developing an AI governance strategy, mapping high-risk AI systems, and promoting AI literacy.
UK’s ICO releases AI toolkit
The ICO’s AI toolkit is designed to provide further practical support to organizations to reduce the risks to individuals’ rights and freedoms caused by their own AI systems. It covers governance and accountability in AI, transparency, contracts and third parties, data minimization, information security and integrity, data protection by design, statistical accuracy, discrimination and bias, human review, and a tracker template.
Get expert support
We’ll continue to monitor regulatory developments and provide updates in future editions of Regulatory Roundup. In the meantime, reach out to us if you need help navigating the evolving landscape of regulations and enforcement actions.
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