FinCEN Proposes Reform to AML/CFT Programme Requirements

Key developments include:

➡️ Shift to Effectiveness: Greater emphasis on how well AML/CFT programmes mitigate risk, rather than the volume of reporting or documentation;

➡️ Risk-Based Flexibility: Firms are empowered to allocate resources based on their own risk assessments;

➡️ Enhanced Role for FinCEN: Introduction of a formal notice and consultation framework between FinCEN and federal supervisors on significant AML/CFT actions;

➡️ Regulatory Modernisation: Updates align with the Anti-Money Laundering Act of 2020 and replace the previous 2024 proposed rule; and

➡️ Consultation Period: Stakeholders will have 60 days to submit comments following publication in the Federal Register.

✅ Firms should review AML/CFT programmes to ensure they are risk-based and outcome focus, with governance and effectiveness testing aligned to FinCEN’s shift in expectations.