Preet Bharara, Criminal Accountability and Culture, Remarks at the Federal Reserve Bank of New York’s  Conference: Reforming Culture and Behavior in the Financial Services Industry: Expanding the Dialogue, Oct. 20, 2016 (criticizing a “culture of minimalism,” in which firms “do the least amount possible to be in some kind of compliance with rules”). 8 Virtual Markets Integrity Initiative Report, Sept. 18, 2018. 9 2018 National Money Laundering Risk Assessment 6. 10 U.S. Immigration and Customs Enforcement, a division of the Department of Homeland Security, created its  Trade Transparency Unit in 2004. 11 FinCEN Advisory: Update on U.S. Currency Restrictions in Mexico: Funnel Accounts and TBML, May 28, 2014. 12 Office of Foreign Assets Control, Advisory on the Use of Exchange Houses and Trading Companies to Evade  U.S. Economic Sanctions Against Iran, Jan. 10, 2013. 13 United Nations Office on Drugs and Crime, Money Laundering and Globalization. 14 Debra Cassens Weiss, Group goes undercover at 13 law firms to show how US laws facilitate anonymous  investment, ABA Journal, Feb. 1, 2016. 15 Federal Financial Institutions Examination Council, Bank Secrecy Act Anti-Money Laundering Examination  Manual, App’x F (“Money Laundering and Terrorist Financing ‘Red Flags’”). 16 Section 314(b) of the USA PATRIOT Act is not codified in the United States Code, but is available as a historical  note to 31 U.S.C. § 5311. The operative rule appears in Department of Treasury regulations. See 31 C.F.R. § 1010.540 (“Voluntary information sharing among financial institutions”).
Rather than take you through the legislative history of this evolution, I want to refer you to the Financial Crimes Enforcement Network—or “FinCEN,” for short. Its website contains short and accessible histories of major anti-money laundering laws.3 These summaries highlight the important public goals of the Bank Secrecy Act and other anti-money laundering statutes—why they are more than just a compliance cost. One theme that emerges is the increasing reliance on banks and other financial institutions to safeguard the payment system. Our laws and regulations increasingly bring the industry into partnership with the government on combatting national security risks to the United States and financial crime. Anti-money laundering is not just a matter of historical record. Our rules continue to evolve. For example, in 2016 the Treasury Department updated its regulations to require that banks and other financial institutions verify the identity of the natural persons—that is, the “beneficial owners”—who own or control companies that hold accounts.4 The beneficial owner rule, like other “know your customer” rules, is a regulatory floor, not a ceiling. Covered firms can take the initiative to implement more stringent internal rules based on their risk. Indeed, in December 2018, the federal banking agencies published guidance that encouraged innovation in anti-money laundering compliance—pilot programs that exceed the legal minima, or at least make compliance more efficient.5 Experiments in ratcheting up internal thresholds are welcome.