Provided by Dow Jones
By Mengqi Sun Companies need to be aware of likely changes to the U.K. s sanctions regime as the end of the Brexit transition period approaches, sanctions compliance attorneys said. During the transition period, which is set to end on Dec. 31, individuals and companies in the U.K. have been required to comply with the European Union s sanctions regimes. After the transition, the U.K. would have the freedom to implement its own sanctions regimes. The U.K. and EU on Thursday announced a post-Brexit agreement over their future relations, covering issues such as trade sharing information in security databases and law enforcement.
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FinCEN and the Fed proposed keeping the threshold at $3,000 for domestic transactions. The so-called travel rule regulations are intended to help law enforcement and regulators later investigate and prosecute illicit activities by preserving an information trail.
“Criminals are using smaller-value transfers and convertible virtual currencies to facilitate terrorist financing, narcotics trafficking and other illicit activities,” Kenneth Blanco, director of FinCEN, said this month at a financial crimes enforcement conference, noting that regulators had received about 2,900 comments regarding the proposed rule.
FinCEN and the Fed will review the comments and then decide whether to approve the final rule.
The American Bankers Association, in a comment letter in November, urged FinCEN and the Fed to withdraw the proposed rule. The association asked the regulators to consider the costs the reduced threshold would impose on entities offering wire tra
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“We get a lot of companies asking questions,” Dan Zitting, chief product and strategy officer at Galvanize, a Vancouver-based compliance technology company. Among the concerns is that individuals who run compliance programs would have a financial incentive to report problems to the government rather than through internal channels, Mr. Zitting said.
If enacted, the program would offer financial awards to tipsters who voluntarily provide original information on possible violations of the Bank Secrecy Act to the Treasury or Justice departments. Monetary awards could be granted when tips lead to successful enforcement actions and monetary sanctions exceeding $1 million. A tipster could receive up to 30% of the penalties recovered.
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Many companies aren’t currently under any federal obligation to identify the true beneficiary of their operations. And many states’ rules enable owners to obscure their identities through shell companies or through agents who register companies on their behalf.
Proponents of more transparency have long said stronger beneficial-ownership disclosure rules will prevent terror groups, drug cartels and arms dealers from using shell companies to move money to support their operations. But some business advocacy groups have opposed the rules, saying they are too burdensome for small, legitimate companies.
What happens next?
The bill now awaits President Trump’s signature. Mr. Trump has said he would veto the bill over language that was unrelated to the anti-money-laundering rules.