Insights

On February 28, 2025, we reported that the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) paused enforcement actions for entities required to report under the CTA’s BOI Rule (Reporting Companies) for failure to file or update beneficial ownership information (BOI) reports by a previously-announced March 21, 2025, deadline. FinCEN had explained that the pause would last until it issued an interim final rule further updating reporting deadlines and providing new guidance around the BOI Rule’s requirements.

On January 23, 2025, the U.S. Supreme Court granted the Government’s application for a stay of an injunction issued by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop. The injunction had blocked enforcement of the CTA and implementation of the related BOI Rule, which required certain entities formed or registered to do business in the U.S. (Reporting Companies) to report information about themselves and their natural-person beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department. The Supreme Court stayed the Texas Top Cop Shop injunction “pending the disposition of the [Government’s] appeal in the United States Court of Appeals for the Fifth Circuit and disposition of a petition for a writ of certiorari.” For more information on the events leading up to the Supreme Court’s review and decision to stay the injunction, please see our prior alerts here, here, and here.

As we discussed in our recent client alert, the U.S. District Court for the Eastern District of Texas issued an opinion and order on December 3, 2024, ("the Order") enjoining the federal government from enforcing the CTA and a rule implementing it. The rule requires certain entities formed or registered to do business in the U.S. ("reporting companies") to report information about themselves and their beneficial owners to the Financial Crimes Enforcement Network ("FinCEN"), a bureau of the U.S. Department of the Treasury.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an opinion and order (the Order) enjoining the federal government, including the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), from enforcing the Corporate Transparency Act (CTA) and a FinCEN rule implementing the CTA, codified at 31 C.F.R. § 1010.380) (i.e., the Reporting Rule).  The Reporting Rule requires certain entities formed or registered to do business in the U.S. (reporting companies) to report information about themselves, including personal identifiers for their natural-person “beneficial owners.”  For background on the CTA and the Reporting Rule, please see our previous client alert discussing a separate district court’s decision (National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala. Mar. 1, 2024) (NSBU) ruling the CTA unconstitutional.) 

On March 29, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), issued a “notice and request for information and comment” (“RFI”) seeking comments on the Bank Secrecy Act’s (“BSA”) customer identification program (“CIP”) rule.  The CIP rule requires U.S. banks to collect a taxpayer identification number (“TIN”) from a U.S. person before opening a new account for that person.  For individuals, this TIN will be a Social Security number (“SSN”).

On July 26, 2023, the U.S. Department of Justice (“DOJ”), the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a Tri-Seal Compliance Note outlining their respective voluntary self-disclosure (“VSD”) procedures for potential violations of U.S. export controls and sanctions.  This announcement highlights the agencies’ focus on compliance with export controls, sanctions, and other U.S. national security laws, and reminds industry of the incentives for voluntarily disclosing potential violations, including mitigation of civil and criminal penalties. 

On March 24, 2023, the Financial Crimes Enforcement Network (“FinCEN”) released much-anticipated public guidance materials regarding its new beneficial ownership information reporting requirements, which will take effect January 1, 2024, pursuant to a final rule promulgated by FinCEN on September 30, 2022 (the “BOI Final Rule”).  87 Fed. Reg. 59,498. The BOI Final Rule requires certain U.S. companies and foreign companies registered to do business in the U.S. to file reports with FinCEN that identify the entity’s beneficial owners and the persons who applied to create or register the entity. The BOI Final Rule implements the beneficial ownership information (“BOI”) reporting provisions of the Corporate Transparency Act (“CTA”), enacted by Congress as part of the Anti-Money Laundering Act of 2020 in the National Defense Authorization Act for Fiscal Year 2021. 

On September 15, 2020, the Financial Crimes Enforcement Network (FinCEN) issued a final rule establishing anti-money laundering (AML) program requirements for “banks lacking a federal functional regulator,” a category that includes private banks, non-federally insured credit unions, and certain trust companies. Until now, such institutions had been covered by an exemption from the AML program requirements in the Bank Secrecy Act (BSA), though they were subject to a number of other BSA requirements, including to file currency transaction reports (CTRs) and suspicious activity reports (SARs). The new rule subjects these institutions to the same customer due diligence obligations, including the obligation to identify the beneficial owners of legal entity customers, that FinCEN imposed on federally-regulated banks in its 2016 “Customer Due Diligence” or CDD Rule. It also requires all non-federally regulated banks to implement customer identification programs (CIPs), which before were required only of certain non-federally-regulated banks.

In this issue:

On May 23, 2017, the United States Court of Appeals for the District of Columbia affirmed the dismissal of a challenge to the U.S. Treasury’s  use of Section 311 of the USA PATRIOT Act against Andorran bank Banca Privada d’Andorra (BPA) by the bank’s majority shareholders. 

On April 14, 2017, the U.S. District Court for the District of Columbia upheld the Treasury Department’s use of Section 311 of the USA PATRIOT Act to impose “special measures” with respect to Tanzanian Bank FBME, Ltd. 

MoneyGram’s ex-Chief Compliance Officer, Thomas Haider, on May 3 settled alleged anti-money laundering (AML) compliance violations with the U.S. Department of the Treasury's Financial Crimes Enforcement Network for $250,000, according to announcements by FinCEN and U.S. Attorney’s Office for the Southern District of New York. It appears to be the largest penalty FinCEN ever has imposed on an individual. The settlement resolves an action that FinCEN brought in federal district court to enforce its penalty against Haider, and also Haider’s counter-claim that the Government violated the Privacy Act by leaking details of its investigation to the media. This appears to be the first time that FinCEN has sought penalties against an individual for mismanagement of an AML compliance program, and only the second time FinCEN has sued to enforce a civil penalty. Haider also agreed to be enjoined from performing compliance functions for a money transmitter for a period of three years.

The months of November and December saw major steps by both the U.S. and the United Nations targeting the Democratic People’s Republic of Korea’s (DPRK) nuclear and ballistic missile programs. First, on November 9, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published a final rule imposing correspondent banking restrictions on U.S. financial institutions in an effort to wall off North Korean banks from the U.S. financial system. Citing ongoing concerns over the DPRK’s ability “to access the international financial system to support its WMD and conventional weapons programs,” the rule exercises FinCEN’s authority under Section 311 of the USA PATRIOT Act to impose so-called “special measures,” requiring covered financial institutions to both prevent North Korean banks from opening correspondent accounts and to take steps to ensure that North Korean banks do not indirectly make use of their correspondent relationships with other foreign financial institutions.

On October 25, 2016, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a new Advisory to Financial Institutions on Cyber-Events and Cyber-Enabled Crime as well as a related list of Frequently Asked Questions (FAQs).

On August 25, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published a Notice of Proposed Rulemaking that would require banks that lack a federal functional regulator to establish and implement anti-money laundering (AML) programs and extend customer identification program (CIP) requirements to certain financial institutions not already subject to these obligations under the Bank Secrecy Act (BSA).

On September 20, 2016, the U.S. District Court for the District of Columbia again delayed implementation of a rule by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) branding FBME Bank Ltd. as a “primary money laundering concern” and effectively severing the foreign bank from the U.S. financial system. The rule, which would prohibit U.S. financial institutions from maintaining correspondent bank accounts on FBME’s behalf, imposes the harshest measure available under Section 311 of the USA PATRIOT Act of 2001, one characterized by the court as “a potentially existential threat to any international bank.”

On June 30, 2016, the New York State Department of Financial Services (NYDFS) adopted a final rule imposing new anti-money laundering (AML) and economic sanctions requirements on banks and other financial institutions regulated by the agency.

On May 18, the U.S. District Court for the District of Columbia granted the U.S. Treasury Department’s Financial Crimes Enforcement Network’s (FinCEN’s) motion to dismiss a civil action brought by shareholders of an Andorran privately-held bank, Banca Privada d’Andorra (BPA), challenging FinCEN’s issuance of a Notice of Finding (NOF) identifying BPA as a “primary money laundering concern” and Notice of Proposed Rulemaking (NPRM) to impose special measures against BPA pursuant to Section 311 of the USA PATRIOT Act that would prohibit U.S. banks from maintaining correspondent accounts for BPA. The court ruled that FinCEN’s withdrawal of the notices, following the seizure of the bank by the Andorran financial regulator, rendered the shareholders’ claims moot. This dismissal provides important support for FinCEN’s use of the Section 311 tool, particularly when foreign regulators choose to take action under their own law following the issuance by FinCEN of a finding of primary money laundering concern against a foreign financial institution.

In this issue:

On January 8, the United States District Court for the District of Minnesota denied a motion by Thomas Haider, MoneyGram’s former chief compliance officer, to dismiss a government complaint seeking to hold him personally liable for a $1 million civil penalty for MoneyGram’s violations of the Bank Secrecy Act (BSA).