Death to Tick the Box, Long Live Catch the Bad Guys

Over the almost 15 years that I have been with ACAMS, the phrases “tick the box” and “catch the bad guys” have been constants.

The first is spoken disparagingly referring to an approach to compliance that anti-financial crime (AFC) professionals say has been forced upon them to satisfy regulators and, specifically, examiners. The second asserts that the focus of AFC compliance teams at financial institutions (FIs) should be first and foremost on the ultimate good of stopping financial crime.

While ticking the box represents the tedium and meaningless expense anti-money laundering and counter-terrorist financing (AML/CTF) pros feel can characterize their work, catching the bad guys gives their work existential meaning. Case studies that illustrate how financial intelligence helps law enforcement catch human traffickers and other criminals are the best-attended sessions at ACAMS conferences and webinars as well as our most-read editorial content.

Not surprisingly, AFC professionals are generally embracing a global legal and regulatory trend that evaluates countries on their actual prosecutorial efforts and FIs on the help they give law enforcement.

The move toward focusing on the effectiveness of AML/CTF measures and practices got an initial push in 2013 when the Financial Action Task Force added 11 immediate outcomes to its Recommendations as criteria for the mutual evaluation reports.1 The addition of the outcomes, which among other things track a country’s AML/CTF prosecutions and asset seizures, addresses the fact that while many countries adopt the prescribed legal and regulatory frameworks, they are not catching bad guys.

The focus on effectiveness is manifest in the European Union’s plan of action, passed by the European Commission in May. It is also the thrust behind the growing number of public-private partnerships ACAMS Today has written about, among them the Joint Money Laundering Intelligence Taskforce in the United Kingdom, Project Protect in Canada, and Australia’s Fintel Alliance.

In the U.S., passage of the Anti-Money Laundering Act (AMLA) of 2020, amending the decades-old Bank Secrecy Act, is a leap forward in the global embrace of effectiveness standards for fighting financial crime.

Under the AMLA, regulated entities will be evaluated in part on the usefulness of the suspicious activity reports they create based on feedback solicited by the Financial Crimes Enforcement Network (FinCEN) from end users: that is, law enforcement. There are also provisions to encourage the adoption of technology for streamlining suspicious activity reporting to make it less costly and more effective, along with the creation by the Treasury and others of national anti-money laundering (AML) risk priorities that must inform FIs’ AML efforts. The act does a whole lot of other things too (see AMLA: The Gamechanger).

Almost 90% of the AFC professionals participating in the just released “ACAMS Compliance Effectiveness and Risks Survey” embraced the idea that the use of technology and greater guidance from regulators envisioned in the AMLA are essential to creating an effective AML/CTF program. Almost 80% said the issuance of national risk priorities would be helpful in shaping effective programs within their institutions. Feedback from FinCEN about the quality of their suspicious activity reports as mandated by the AMLA was also seen as an important priority in the survey.2

If life sometimes seems like two steps forward, one step back, the AMLA represents an overdue jump forward. As always, the devil is in the details. We know that, once legislation and regulations are adopted, countries, criminals and even FIs will try to game the effort. But the growing consensus that catching the bad guys is what it is all about is an unmitigated good.

Kieran Beer, CAMS
Chief Analyst, Director of Editorial Content
Follow me on Twitter: @KieranBeer
“Financial Crime Matters with Kieran Beer”

  1. “FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems,” Financial Action Task Force, February 2013, https://www.fatf-gafi.org/publications/mutualevaluations/documents/fatf-methodology.html
  2. “ACAMS Compliance Effectiveness and Risks Survey,” ACAMS, February 2021, https://www.acams.org/en/media/document/acams-compliance-effectiveness-and-risks-survey

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