The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) launched the “FinCEN Exchange” program today in order to enhance information sharing with financial institutions and to strengthen public-private partnerships to combat financial crime. As part of this program, FinCEN, in close coordination with law enforcement, will convene regular briefings with financial institutions to exchange information on priority illicit finance threats, including targeted information and broader typologies. This will enable financial institutions to better identify risks and focus on high priority issues, and will help FinCEN and law enforcement receive critical information in support of their efforts to disrupt money laundering and other financial crimes.
“Strong public-private partnerships and two-way information sharing is a crucial component of our efforts to combat the sophisticated money laundering methods and evolving threats we face today,” said Sigal P. Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence. “FinCEN Exchange will bring together law enforcement, FinCEN, and different types of financial institutions from across the country to share information that can help identify vulnerabilities and disrupt terrorist financing, proliferation financing and other financial crimes.”
Private sector participation in FinCEN Exchange is strictly voluntary, and the program does not introduce any new regulatory requirements. It also does not replace or otherwise affect existing mechanisms by which law enforcement engages directly with the financial industry. It is part of Treasury’s broader objective of strengthening the anti-money laundering framework by encouraging, enabling, and acknowledging more regular industry focus on high-value and high-impact activities. Operational briefings under the FinCEN Exchange program will begin in the coming weeks.
Law enforcement relies on the financial industry to report important data to fight financial crime through mechanisms such as Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs). The government, in turn, provides feedback to the private sector, including through FinCEN Advisories, SAR Statistics, briefings, and other forms of information to guide and encourage industry efforts.
Since 2015, FinCEN has convened over a dozen special briefings in five cities with over 40 financial institutions and multiple law enforcement agencies. In connection with these briefings, FinCEN, working closely with law enforcement, issues requests pursuant to Section 314(a) of the USA PATRIOT Act related to investigations and provides associated financial typologies. Information provided after the briefings by financial institutions through SARs has helped the public sector map out and target weapons proliferators, sophisticated global money laundering operations, human trafficking and smuggling rings, corruption and trade-based money laundering networks, among other illicit actors. The briefings also have proved useful to financial institutions, helping them focus on specific priorities and better identify risks.
FinCEN Exchange will build on the success of these efforts by convening more regularly scheduled and as-needed operational briefings across the nation with law enforcement, FinCEN, and financial institutions to exchange information on priority illicit finance and national security threats. In consultation with law enforcement, FinCEN will invite financial institutions to participate based on a variety of factors, including whether they may possess information relevant to a particular topic. While the contours of each briefing will vary, the information shared, whether through Section 314(a) of the USA PATRIOT Act or other authorities, will often include information intended to support specific lines of investigation or broader typologies related to a particular illicit finance threat. After receiving information at a FinCEN Exchange operational briefing, financial institutions will be better equipped to incorporate responsive information into SARs.
FinCEN’s regulations under Section 314 of the USA Patriot Act enable federal, state, local, and foreign (such as European Union) law enforcement agencies, through FinCEN, to reach out to more than 37,000 points of contact at more than 16,000 financial institutions to locate accounts and transactions of persons that may be involved in terrorism or money laundering. FinCEN receives requests from law enforcement and upon review, sends notifications to designated contacts within financial institutions across the country once every 2 weeks informing them new information has been made available via a secure Internet web site. The requests contain subject and business names, addresses, and as much identifying data as possible to assist the financial industry in searching their records. The financial institutions must query their records for data matches, including accounts maintained by the named subject during the preceding 12 months and transactions conducted within the last 6 months. Financial institutions have 2 weeks from the posting date of the request to respond with any positive matches. If the search does not uncover any matching of accounts or transactions, the financial institution is instructed not to reply to the 314(a) request.
FinCEN also encourages financial institutions to voluntarily share, as appropriate, information with other FinCEN Exchange participants as well as other financial institutions or associations of financial institutions pursuant to Section 314(b) of the USA PATRIOT Act. Section 314(b) provides financial institutions with the ability to share information with one another, under a safe harbor that offers protections from liability, in order to better identify and report potential money laundering or terrorist activities.
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