As threats of financial crimes continue to grow, enforcement actions under the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) remain to have a significant impact and implication on future regulations. Recently, the Office of the Comptroller of the Currency (OCC) released its 2020 bank supervision operating plan that sets forth its supervisory strategies and objectives regarding BSA/AML compliance.
Staying compliant with the evolving regulatory landscape of Anti-Money Laundering (AML) and the Bank Secrecy Act (BSA) has always been challenging. With the passage of the National Defense Authorization Act (NDAA) for the fiscal year 2021, increased scrutiny and heightened penalties are expected. Amidst these changes, financial institutions also grapple with imminent credit and liquidity risks which, if not mitigated, could significantly affect operations and revenue.
The aggressive enforcement of the Foreign Corrupt Practices Act (FCPA) continues to be a priority for the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). Seven enforcement actions were made during the third quarter of 2019 with about $78.5 million in disgorgement and penalties. Top areas of enforcement include corporate compliance individual accountability, international cooperation, and multi-jurisdictional coordination.
Today's supply chain landscape is becoming inherently complex that traditional-based operations and transactions have slowly become disadvantageous for companies and may halt their growth. Fortunately, with the promising recent applications of blockchain technology and smart contracts, certain complexities in the supply chain can now be reduced and better managed. These technology-based methods of verifying and executing diverse business transactions can improve the transparency, traceability, and efficiency in the supply chain, making it more convenient for businesses while strengthening client relationships.
An internal investigation conducted properly is essential to any business. It nips issues in the bud, keeps companies running, and saves millions of dollars from potential litigation. Not only do internal investigations help in ensuring ongoing legal and regulatory enforcement, but they also provide businesses with an opportunity to correct mistakes and identify risk areas before they become actual liabilities.
New regulatory and legislative developments continue to reshape the Financial Industry Regulatory Authority (FINRA) arbitration landscape. One of the sweeping changes today is FINRA’s temporary shift to remote operations and virtual arbitrations in response to the ongoing COVID-19 pandemic. Proper planning and assessment of the "new normal" must be carefully considered by practitioners to avoid the pitfalls which virtual hearings may entail. Other significant updates include FINRA’s overhaul of its Membership Application Program (MAP) rules and the Securities and Exchange Commission’s (SEC’s) approval of FINRA rule setting a minimum fee for brokers’ expungement request.
The Qualified Opportunity Zones (QOZ) and Qualified Opportunity Funds (QOF) have been rapidly changing over the years. As a result, the Internal Revenue Service (IRS) has been stringently monitoring QOZ and QOF to ensure transparency among businesses and investors. More significantly, in October 2019, the IRS Treasury Department issued the proposed draft of the Opportunity Zone Accountability and Transparency Act which seeks to establish increased reporting framework, disclosure requirements, and penalty structure for QOFs.
For the past years, the tax incentives provided by qualified opportunity zone (QOZ) investments have greatly helped and benefited investors in qualified opportunity funds (QOFs). However, important regulatory changes have been continuously happening in this area of law. These changes, in addition to the several other developments brought by the COVID-19 pandemic, need to be carefully addressed and considered.
Significant advancements continue to reshape anti-money laundering and counter-terrorism financing (AML/CTF) efforts in 2020. In January, the U.S. Department of the Treasury released its National Strategy for Combatting Terrorist and Other Illicit Financing which details the key priorities in Bank Secrecy Act (BSA) enforcement. The Federal Financial Institutions Examination Council (FFIEC) also issued an updated BSA/AML Examination Manual, while the Financial Action Task Force (FATF) discussed the Travel Rule for digital assets.
As the world grapples with the unprecedented economic disruptions brought by the Coronavirus Disease 2019 (COVID-19) pandemic, multinational enterprises (MNEs) in the U.S. and Canada are confronted by the added challenge of maintaining transfer pricing compliance. Most businesses are now forced to adjust their transfer prices, analysis, and documentation and revisit their force majeure clauses to look for alternative means of fulfilling their contract obligations. Thus, creating a profound strain on the operations of MNEs.
In response to violations committed by U.S. persons as well as foreign organizations, the enforcement efforts of the Department of Treasury's Office of Foreign Assets Control (OFAC) have become more extensive. Some of the most significant OFAC enforcement actions this year include Eagle Shipping and Société Internationale de Télécommunications Aéronautiques (SITA) that were both assessed over $1 million civil penalties for their violations.
In May 2019, the US Treasury Department’s Office of Foreign Assets Control (OFAC) published a framework for OFAC compliance. The core elements of the guidance are aimed at creating a tailored risk-based strategy to ensure sanctions compliance across an organization. It also outlines five components of a compliance program and it includes an appendix identifying the root causes of compliance breakdowns and deficiencies. To mitigate risks, it is imperative for companies to assess the adequacy of their OFAC compliance programs and to tailor them to target risks relevant to the business.
Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations have evidently evolved with the onset of the pandemic. With several authorities reconsidering their existing laws in response to the increasing criminal activities and emerging risks, the AML/KYC regulatory landscape and its already intricate compliance environment have become more active and complex than ever.
Today’s businesses are significantly maximizing the potentials of cloud-based workforce mobility tools for improved productivity and more advanced workforce management. However, the increase of users, devices, and applications accessing outside the enterprise perimeter has resulted in a rise of cyberattacks and data breaches.
Manual processing of accounts payable (APs) is typically filled with time-consuming and tedious tasks, not to mention the risks of errors that can significantly impact production time, cost, and flow. To address these and other challenges within the AP workflow, companies have started to adopt automation technologies in recent years. With AP automation, organizations could optimize their AP performance through increased on-time payment rates, reduced cost-per-invoice, and early payment discounts.
