Bass, Berry & Sims attorney Thad McBride provided insights for an article in Compliance Reporter discussing the Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017 and the heightened compliance measures financial institutions may face if the bill is passed in the Senate. The bill would put forth an increased ability for regulators to crack down on questionable activity occurring beyond U.S. borders by reviewing records of coordinating institutions stateside.
This would put a greater emphasis for businesses with overseas operations to "know your customer" and "know your customers' customers," especially banks. "There will be added due diligence requirements for financial services companies in terms of really knowing who they are dealing with," said Thad. "There will be added necessity to dig into who your customers are and who is involved in your transactions."
For compliance professionals, the bill's increased scrutiny may create situations that require review of their business counterparts. It's important for compliance professionals to ensure that they are viewed as a resource, rather than a barrier in doing business. "There likely will be scenarios where it will be necessary to dig into who a client is and, to the extent you can be friendly with business people, it will make it easier to meet those new burdens," Thad added.
The full article, "Senate AML Bill Would Raise KYC Burdens," was published on June 29, 2017, by Compliance Reporter and is available online (subscription required).