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FinCEN renewing info collections without changes

FinCEN has published two notices and requests for comment to extend its authority to require the collection of information.

On Friday, February 23, FinCEN published [89 FR 13802] a notice on the proposed renewal, without change, of an existing information collection requirement for geographic targeting orders (GTOs). This will allow FinCEN to continue renewing its GTOs while its proposal for requiring nationwide Real Estate Reports of non-financed transfers of residential real estate remains under consideration. Comments are due by April 23, 2024.

On Monday, February 26, FinCEN published [89 FR 14148] a notice on the proposed renewal, without change, of its existing information collection requirement in 31 CFR 1010.230 related to beneficial ownership requirements for legal entity customers. The current requirement for banks to obtain certifications of beneficial ownership from entity customers will continue until FinCEN proposes and issues and makes effective a final rule to change the requirements in section 1010.230, which is not expected until at least the end of 2024. Comments on FinCEN's notice are due by April 26, 2024.


Treasury reports on FATF plenary

The Treasury Department has reported that the Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering and countering the financing of terrorism (AML/CFT), concluded its fifth Plenary under the Singaporean presidency on February 23. The FATF made several key advances, including kicking off a public consultation on potential changes to the FATF Recommendation on wire transfer information and the adoption of new guidance on trusts. The FATF also noted its concern on Russian Federation’s growing financial connectivity with North Korea and Iran.


President announces more sanctions against Russia

The White House has released a statement in which President Biden announced “more than 500 new sanctions against Russia for its ongoing war of conquest on Ukraine and for the death of Aleksey Navalny, who was a courageous anti-corruption activist and Putin’s fiercest opposition leader. These sanctions will target individuals connected to Navalny’s imprisonment as well as Russia’s financial sector, defense industrial base, procurement networks and sanctions evaders across multiple continents. They will ensure Putin pays an even steeper price for his aggression abroad and repression at home.”

The U.S. is also “imposing new export restrictions on nearly 100 entities for providing backdoor support for Russia’s war machine [and] taking action to further reduce Russia’s energy revenues.”

Specifics of the sanctions will be announced by the Treasury Department's Office of Foreign Assets Control.


Hsu discusses consolidated supervision of crypto-asset intermediaries

The OCC reports that Acting Comptroller of the Currency Michael J. Hsu yesterday offered remarks to the Financial Stability Board’s Crypto Working Group.

In his remarks, Mr. Hsu shared his perspective on the importance of coordination and collaboration on the supervision of global institutions, particularly with regard to crypto-asset activities. He also discussed the relationship between crypto and tokenization.


FinCEN issues Small Entity Compliance Guide for BOI access

FinCEN has issued a Small Entity Compliance Guide for Beneficial Ownership Information Access and Safeguards Requirements to provide an overview of the Beneficial Ownership Information Access and Safeguards Rule (Access Rule) requirements for small entities (including financial institutions) that obtain beneficial ownership information (BOI) from FinCEN.

The preface of the Guide indicates it is explanatory only, does not supplement or modify any obligations imposed by statute or regulation, and does not supersede more recent guidance documents issued by FinCEN.

The Guide and other resource materials about the Beneficial Ownership Information Reporting rules can be found on FinCEN's BOI Reference Materials webpage.


U.S. sanctions two affiliates of Russian ransomware group

The Treasury Department on Tuesday reported that OFAC has designated two individuals who are affiliates of the Russia-based ransomware group LockBit. This action is the first in an ongoing collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation, and international partners targeting LockBit.

For identification information on the two individuals, see BankersOnline's February 20, 2024, OFAC Update.


OCC enforcement actions for February 2024

The OCC has released its February 2024 list of enforcement actions taken against national banks and federal savings associations and related individuals.

  • The previously announced cease and desist order, order for civil money penalty, and Gramm-Leach-Bliley agreement issued to City National Bank, Los Angeles, California.
  • A cease and desist order against Blue Ridge Bank, N.A., Martinsville, Virginia, for unsafe or unsound practices, including those related to BSA/AML, capital ratios, capital and strategic planning, liquidity risk management, and information technology controls. The deficiencies in the BSA/AML compliance program resulted in violations of law, rule, or regulation, and the bank also failed to correct previously reported BSA problems.
  • A formal agreement with The First National Bank of St. Ignace, St. Ignace, Michigan, for unsafe or unsound practices, including those related to capital planning, capital stress testing, and strategic planning, and a violation of law, rule, or regulation related to payment of dividends.
  • An order of prohibition and for payment of a $50,000 civil money penalty against Stephen Adams, former senior vice president and managing director of residential lending, Sterling Bank and Trust, FSB, Southfield Michigan, for his role in failing to appropriately supervise, investigate, and discipline employees originating residential mortgage loans.
  • Orders of prohibition issued to—
    • Cole R. Mann, former branch manager, PNC Bank, National Association, Wilmington, Delaware, for stealing, embezzling, or otherwise misappropriating funds from the bank and a bank customer
    • Chimere Shanta Mitchell, former fraud and claims operations specialist at Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for misappropriating confidential information of bank customers, including more than 20 elderly customers, and selling the information to a third party, resulting in fraudulent transactions
    • Aaron Parsons, relationship banker and Webster Bank N.A., Stamford, Connecticut, for unauthorized withdrawals from accounts of bank customers, four of whom are elderly, and depositing the funds in his own bank account
    • Nyema'sha Taylor, former teller at Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for knowingly processing unauthorized cash withdrawals from a customer’s account
    • Francis Andujar Velazquez, former senior customer service representative, Santander Bank, Wilmington, Delaware, for misappropriating funds from customers’ accounts by making purchases using confidential bank customer information and selling confidential information of bank customers to a third party and facilitating fraudulent transactions
    • Mirsha Yamili Wilson, former associate Banker, JPMorgan Chase Bank, N.A., Columbus, Ohio, for taking cash used to supply a bank branch’s ATMs and concealing the shortage
  • Personal cease and desist orders against—
    • Colleen Kimmel, former general counsel, Sterling Bank and Trust, FSB, Southfield, Michigan, for her role in not ensuring the bank conducted or suggesting to the Board that the bank conduct an investigation into concerns related to a residential mortgage loan product, not ensuring the bank’s BSA program had an adequate system of internal controls, and not timely reporting suspicious activity related to certain residential mortgage loans
    • Jonathan Kolk, former residential underwriting manager, Sterling Bank and Trust, FSB, Southfield, Michigan, for capitulating to pressure to quickly underwrite certain residential mortgage loans and his role in underwriting, and supervising the underwriting of, loans that had false or fraudulent loan applications


OFAC amends North Korea Sanctions Regulations

The Treasury Department's Office of Foreign Assets Control has published [89 FR 12233] in today's Federal Register a final rule amending its North Korea Sanctions Regulations [31 C.F.R. 510] to modify a general license that authorizes certain transactions in support of specified humanitarian activities of nongovernmental organizations. Additionally, OFAC is adding general licenses to authorize the following: transactions related to the exportation and reexportation of items authorized by the U.S. Department of Commerce; the provision of certain agricultural commodities, medicine, and medical devices; and certain journalistic activities in North Korea.

The rule is effective today. OFAC also issued several new North Korea-related FAQs and amended three FAQs.


Treasury fact sheet on recent actions

Yesterday, the Treasury Department issued a Fact Sheet on recent actions taken to enhance financial transparency and combat illicit finance. These initiatives include major steps towards implementing the Anti-Money Laundering Act, including the Corporate Transparency Act, and supporting the Administration’s Strategy to Counter Corruption. Major initiatives include:

  • Increasing corporate transparency through beneficial ownership reporting as FinCEN implements the Corporate Transparency Act
  • Strengthening transparency in the residential real estate market with its February 2024 Notice of Proposed Rulemaking to require certain professionals involved in real estate closings and settlements to report information to FinCEN about non-financed transfers of residential real estate to legal entities or trusts.
  • Protecting the investment adviser sector from abuse with its recent Notice of Proposed Rulemaking to require certain investment advisers to apply AML/CFT requirements pursuant to the Bank Secrecy Act, including implementing risk-based AML/CFT programs, reporting suspicious activity to FinCEN, and fulfilling relevant recordkeeping requirements. Related to this effort, Treasury also published a detailed risk assessment of the investment adviser sector that identified several illicit finance and national security risks.
  • Publication of the 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing.


OFAC sanctions network smuggling U.S. tech to Central Bank of Iran

The U.S. Department of the Treasury yesterday announced that OFAC has a procurement network responsible for facilitating the illegal export of goods and technology from over two dozen U.S. companies to end-users in Iran, including the Central Bank of Iran (CBI), which is designated for its role in providing financial support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah. These designations target three individuals and four entities tied to the procurement of sophisticated U.S. technology for use by CBI in violation of U.S. export restrictions and sanctions.

Among the goods and technology acquired by CBI were items classified as information security items subject to national security and anti-terrorism controls by the U.S. Department of Commerce’s Bureau of Industry and Security.

For the names and identification information of the designated entities and individuals, see BankersOnline's February 14, 2024, OFAC Update.


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