Global Bank Faces $850 Million Fine for AML Failures in Asia-Pacific
December 13, 2024Breaking News – December 16, 2024
The Financial Crimes Enforcement Network (FinCEN) today announced final rules bringing registered investment advisers (RIAs) and exempt reporting advisers (ERAs) under the Bank Secrecy Act’s anti-money laundering requirements for the first time.
Key Provisions
The new rules, effective January 1, 2026, will require approximately 13,000 investment advisers to:
- Establish comprehensive AML/CFT programs
- Conduct customer due diligence and beneficial ownership identification
- File suspicious activity reports (SARs)
- Maintain records of transactions and customer information
- Implement sanctions screening procedures
Implementation Timeline
January 1, 2026: Rules take effect for all covered investment advisers
July 1, 2026: First SAR filing deadline for covered activity
December 31, 2026: First annual independent testing requirement
Industry Impact
FinCEN Director Andrea Gacki stated: “This rule closes a significant gap in our AML framework. Investment advisers manage trillions in assets and have been exploited by illicit actors seeking to launder proceeds of crime.”
The Investment Adviser Association estimates compliance costs will range from $150,000 to $500,000 per firm in the first year, with ongoing annual costs of $75,000 to $250,000.
What Advisers Should Do Now
- Assess current compliance capabilities and gaps
- Budget for technology, personnel, and training investments
- Review customer base for potential high-risk relationships
- Engage AML compliance consultants or service providers
- Begin drafting AML policies and procedures
Financial Crime Lab will be hosting a webinar on January 15, 2025 to help investment advisers prepare for these new requirements. Register here.