Are current anti–money laundering rules helping or harming the U.S. financial system?
Payments
Asked by Question Bot04/Apr/20131 answer
1 Answer
F
Faisal Khan
Answered 04/Apr/2013
Marie S. and User-9918985937555143421 have answered well, I would just like to add certain points on what they have cited.
Improved and/or revised AML laws & regulations do not necessarily harm the American financial system. What these laws are doing, to a larger extent, is that they are closing (read: mitigating) certain loopholes and/or innovative banking practises that aid money laundering.
The costs in most cases are not passed on to the end consumers or businesses. They are part and parcel of doing business for banks and/or other regulated financial institutions. So, there is natural resistance within the banks in incorporating and implementing new rulesets as it is more work, compliance and audit checks, but no one has lost business because of it.
There are definite measures and benchmarks that can very accurately gauge how much money is mitigated, etc. but this is protected under the Banking Secrecy Act and is reported only to FinCEN, etc. and not made public knowledge.
What they cannot measure are money-laundering practices that are exist within the system, but no traps have been defined to catch and identify them.
With regulations passed in the last couple of years, and amongst them Dodd-Frank Act (Section 1073 for Remittances) and other related circulars as published by FinCEN and other regulatory bodies, the US banking and financial system requires that both domestic transactions and international transactions be subject to the same scrutiny and checks. This means overseas financial institutions are now also required to be registered with FinCEN and obey US AML checks (in case of Remittances and overseas payments).
They do burden financial institutions as you can very well imagine, implementing rule sets into the core banking and/or its BI systems is not always an easy task. But the financial burden is rarely passed on to the consumers (I cannot recall a single case-study or report that I have read, which such financial burden was passed onto consumers).
Overall, these checks and balances are improving the banking and finance eco-system to be more accountable, granular and transparent to the financial regulators and/or oversight organisations.
Improved and/or revised AML laws & regulations do not necessarily harm the American financial system. What these laws are doing, to a larger extent, is that they are closing (read: mitigating) certain loopholes and/or innovative banking practises that aid money laundering.
The costs in most cases are not passed on to the end consumers or businesses. They are part and parcel of doing business for banks and/or other regulated financial institutions. So, there is natural resistance within the banks in incorporating and implementing new rulesets as it is more work, compliance and audit checks, but no one has lost business because of it.
There are definite measures and benchmarks that can very accurately gauge how much money is mitigated, etc. but this is protected under the Banking Secrecy Act and is reported only to FinCEN, etc. and not made public knowledge.
What they cannot measure are money-laundering practices that are exist within the system, but no traps have been defined to catch and identify them.
With regulations passed in the last couple of years, and amongst them Dodd-Frank Act (Section 1073 for Remittances) and other related circulars as published by FinCEN and other regulatory bodies, the US banking and financial system requires that both domestic transactions and international transactions be subject to the same scrutiny and checks. This means overseas financial institutions are now also required to be registered with FinCEN and obey US AML checks (in case of Remittances and overseas payments).
They do burden financial institutions as you can very well imagine, implementing rule sets into the core banking and/or its BI systems is not always an easy task. But the financial burden is rarely passed on to the consumers (I cannot recall a single case-study or report that I have read, which such financial burden was passed onto consumers).
Overall, these checks and balances are improving the banking and finance eco-system to be more accountable, granular and transparent to the financial regulators and/or oversight organisations.