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U.S. Addresses Long-Standing Gap in its AML Compliance Regime

Jill Smiley, Director Risk and Compliance

On January 1, 2021, the U.S. Senate voted to override President Donald Trump’s veto of the National Defense Authorization Act for Fiscal Year 2021, a legislative package that includes the Anti-Money Laundering Act of 2020.

The passage of the AML Act closes one of the biggest gaps in the U.S. anti-money laundering regime and moves the United States toward compliance with international AML and countering the financing of terrorism (CFT) standards related to beneficial ownership.

Under the new beneficial ownership law, U.S. corporations and other entities will have to register the identity of their beneficial owners – an individual who exercises significant control over an entity or owns a 25% or more equity interest in the entity – in a database managed by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) upon formation or registration of the entity and within one year of any change in beneficial ownership.

Protiviti has published a Flash Report that explains the significance of the law, details the requirements for corporations and other entities, and highlights some of the open questions about how it will be implemented. Read it here.

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