Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco today discussed how information sharing is critical to identifying, reporting, and preventing financial crime.
In his remarks to the annual American Bankers Association/American Bar Association Financial Crimes Enforcement Conference, Director Blanco provided important clarification on FinCEN’s information sharing program under Section 314(b) of the USA PATRIOT Act, and announced that FinCEN is issuing a new 314(b) Fact Sheet and rescinding previously issued guidance (FIN-2009-G002) as well as a former administrative ruling (FIN-2012-R006) (parts of which are incorporated into the guidance in the new 314(b) Fact Sheet).
Section 314(b) of the USA PATRIOT Act is an important tool for combatting financial crime. It provides financial institutions with the ability to share information with one another, under a safe harbor provision that offers protections from civil liability, in order to better identify and report potential money laundering or terrorist financing. After carefully considering feedback from the financial industry, FinCEN is providing three main clarifications:
A financial institution may share information relating to activities that it suspects may involve possible terrorist financing or money laundering. Although this may include circumstances in which a financial institution has information about activities it suspects involve the proceeds of a specified unlawful activity (SUA), financial institutions do not need to have specific information that these activities directly relate to proceeds of an SUA, or to have identified specific laundered proceeds of an SUA. Nor do financial institutions need to have made a conclusive determination that the activity is suspicious in order to benefit from the statutory safe harbor. Further, financial institutions may share information about activities as described, even if the activities do not constitute a “transaction.” This can include an attempted transaction, or an attempt to induce others to engage in such a transaction. This allows financial institutions to avail themselves of Section 314(b) information sharing to address incidents of fraud or cybercrime, and other predicate offenses, where appropriate. In addition, there is no limitation under Section 314(b) on the sharing of personally identifiable information, or the type or medium of information shared, to include sharing information verbally.
An entity that is not itself a financial institution under the Bank Secrecy Act may form and operate an association of financial institutions whose members share information under Section 314(b). Notably, this includes compliance service providers.
An unincorporated association governed by a contract among the group of financial institutions that constitutes its members may engage in information sharing under Section 314(b).
Financial institutions subject to an anti-money laundering program requirement under FinCEN regulations, and any qualifying association of such financial institutions, are eligible to share information under Section 314(b). Although sharing information pursuant to Section 314(b) is voluntary, FinCEN strongly encourages financial institutions to participate to enhance their compliance with anti-money laundering/counter-financing of terrorism requirements.