Anti-Money Laundering Act of 2020

On January 1, 2021, the U.S. federal Congress overrode then President Trump’s veto of the National Defense Authorization Act (the “NDAA”), effectively adopting the Anti-Money Laundering Act of 2020 and the Corporate Transparecy Act (together, the “Act”) incorporated within it. While the NDAA is very long, among many other things, the Act provides, largely by amending the Bank Secrecy Act (the “BSA”), that:

  •  The BSA applies to cryptocurrencies, by amending the BSA to apply to “value that substitutes for currency;”
  •  The BSA applies to “a person engaged in the trade of antiquities,” which will be regulated by the   Treasury and which has a year to issue regulations;
  •  Treasury must establish minimum anti-money laundering and counter-terrorist financing (“CFT”) standards, and revise entirely the customer due diligence rule;
  •  Financial institutions must establish a CFT program; and
  •  Financial insutitutions must report to the Financial Crimes Enforcement Network (“FinCEN”) beneficial ownership: if it is a “reporting company” (meaning most U.S. companies or U.S. registered foreign companies except certain already regulated companies and companies with an office in the United States, more than 20 employees and more than $5 million in gross receipts), it must report to FinCEN anyone owning or controlling 25% or more of its ownership interests or any individual having “substantial control” over it. FinCEN is to keep the register of such companies largely confidential except if requested by a valid federal or law enforcement agecy, or a federal regulator. FinCEN is to adopt a rule by January 1, 2022, and in April FinCEN sought comments on questions it had.