FinCEN: A compliance plan for the sake of having a compliance plan does not cut it

Posted by

FinCEN or Financial Crimes Enforcement Network is charged with the task of implementing and regulating Anti-Money Laundering (AML) and Counter-terrorist financing (CTF) laws. FinCEN has made it clear that simply having a compliance plan in place is insufficient without an accompanying “culture of compliance.” In a recent speech delivered by FinCen Director Jennifer Shasky Calvery at the Mid-atlantic Anti-Money Laundering (AML) Conference, Director Calvery stated: “I can say without a doubt that a strong culture of compliance could have made all the difference” for the targets of FinCen investigations.

Director Calvery’s speech provides incredible insight into what a regulator is looking for today. It is no longer sufficient to allocate resources to developing a compliance plan in response to a regulatory order or to establish good faith in the event a regulator comes knocking i.e. it is no longer sufficient to simply have a sign in your food establishment that tells employees they “must wash their hands.” Rather there must be a culture of compliance ingrained in the company from leadership to personnel. According to the advisory put out by FinCEN, financial institutions need to prioritize compliance even over their own revenue interest.

One particular principal that the advisory set forth that I agree with wholeheartedly is the principle that a compliance program be tested by an “independent competent party.” There is no better way to safe guard a company from any potential compliance shortfalls than having an independent expert in the particular field evaluate and assist in implementing the plan all under the supervision and watchful eye of an experienced attorney. While having an internal compliance department or personnel is a sound policy, conflicts may arise where the individuals responsible for making the tough decisions between strict compliance and increasing revenue have an interest in the company. On the other hand if a company invest in having independent and unbiased consultants and counsel to develop or evaluate a compliance program, a regulator may have one less thing to inquire about.

FinCEN: A compliance plan for the sake of having a compliance plan does not cut it

Posted by

FinCEN or Financial Crimes Enforcement Network is charged with the task of implementing and regulating Anti-Money Laundering (AML) and Counter-terrorist financing (CTF) laws. FinCEN has made it clear that simply having a compliance plan in place is insufficient without an accompanying “culture of compliance.” In a recent speech delivered by FinCen Director Jennifer Shasky Calvery at the Mid-atlantic Anti-Money Laundering (AML) Conference, Director Calvery stated: “I can say without a doubt that a strong culture of compliance could have made all the difference” for the targets of FinCen investigations.

Director Calvery’s speech provides incredible insight into what a regulator is looking for today. It is no longer sufficient to allocate resources to developing a compliance plan in response to a regulatory order or to establish good faith in the event a regulator comes knocking i.e. it is no longer sufficient to simply have a sign in your food establishment that tells employees they “must wash their hands.” Rather there must be a culture of compliance ingrained in the company from leadership to personnel. According to the advisory put out by FinCEN, financial institutions need to prioritize compliance even over their own revenue interest.

One particular principal that the advisory set forth that I agree with wholeheartedly is the principle that a compliance program be tested by an “independent competent party.” There is no better way to safe guard a company from any potential compliance shortfalls than having an independent expert in the particular field evaluate and assist in implementing the plan all under the supervision and watchful eye of an experienced attorney. While having an internal compliance department or personnel is a sound policy, conflicts may arise where the individuals responsible for making the tough decisions between strict compliance and increasing revenue have an interest in the company. On the other hand if a company invest in having independent and unbiased consultants and counsel to develop or evaluate a compliance program, a regulator may have one less thing to inquire about.

FinCEN: A compliance plan for the sake of having a compliance plan does not cut it

Posted by

FinCEN or Financial Crimes Enforcement Network is charged with the task of implementing and regulating Anti-Money Laundering (AML) and Counter-terrorist financing (CTF) laws. FinCEN has made it clear that simply having a compliance plan in place is insufficient without an accompanying “culture of compliance.” In a recent speech delivered by FinCen Director Jennifer Shasky Calvery at the Mid-atlantic Anti-Money Laundering (AML) Conference, Director Calvery stated: “I can say without a doubt that a strong culture of compliance could have made all the difference” for the targets of FinCen investigations.

Director Calvery’s speech provides incredible insight into what a regulator is looking for today. It is no longer sufficient to allocate resources to developing a compliance plan in response to a regulatory order or to establish good faith in the event a regulator comes knocking i.e. it is no longer sufficient to simply have a sign in your food establishment that tells employees they “must wash their hands.” Rather there must be a culture of compliance ingrained in the company from leadership to personnel. According to the advisory put out by FinCEN, financial institutions need to prioritize compliance even over their own revenue interest.

One particular principal that the advisory set forth that I agree with wholeheartedly is the principle that a compliance program be tested by an “independent competent party.” There is no better way to safe guard a company from any potential compliance shortfalls than having an independent expert in the particular field evaluate and assist in implementing the plan all under the supervision and watchful eye of an experienced attorney. While having an internal compliance department or personnel is a sound policy, conflicts may arise where the individuals responsible for making the tough decisions between strict compliance and increasing revenue have an interest in the company. On the other hand if a company invest in having independent and unbiased consultants and counsel to develop or evaluate a compliance program, a regulator may have one less thing to inquire about.