FinCEN Confronts “Unfair Surprise” and Provides Roadmap for Its Enforcement Investigations

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) recently published a list of factors it will use when deliberating an administrative cause of action against a financial institution for Bank Secrecy Act (“BSA”) violations.

Understanding these factors, and how they intersect with a financial institution’s operational realities, is crucial to anti-money laundering (“AML”) compliance and effectively navigating an AML enforcement investigation.

By publishing its enforcement factors, FinCEN joined the ranks of its larger regulatory partners, who also have publicly-available documents identifying their respective enforcement factors and investigative procedures.¹ Notably, the substance of FinCEN’s enforcement factors, found here, closely mirrors the Department of Justice’s “Filip Factors,” identified in the Justice Manual and used by the Department of Justice when determining whether to charge a corporation for wrongdoing.²

FinCEN identified ten specific factors, through which it will view a financial institutions’ conduct, when it believes the institution failed to comport with BSA/AML laws and regulations.

Nature and seriousness of the violations, including the extent of possible harm to the public and the amounts involved.
Impact or harm of the violations on FinCEN’s mission to safeguard the financial system from illicit use, combat money laundering, and promote national security.

Footnotes:

1: See e.g. Federal Reserve, FDIC, OCC, and NCUA “Joint Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements,” available at https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200813a1.pdf (August 13, 2020); U.S. Securities and Exchange Commission Division of Enforcement, Enforcement Manual, Sec 2.3 (November 28, 2017), available at https://www.sec.gov/divisions/enforce/enforcementmanual.pdf

2: U.S. Department of Justice, Justice Manual, Sec. 9-28.300 (updated November 2018), available at https://www.justice.gov/jm/jm-9-28000-principles-federal-prosecution-business-organizations#9-28.300