On 10/15/20, FinCEN released advisory FIN-2020-A008 - which is titled “Supplemental Advisory on Identifying and Reporting Human Trafficking and Related Activity” - to “help save lives, and to protect the most vulnerable in our society from predators and cowards who prey on the innocent and defenseless for money and greed.” This advisory provides new information relating to human trafficking and supplements FinCEN’s 2014 Guidance on Recognizing Activity that May be Associated with Human Smuggling and Human Trafficking - Financial Red Flags. The advisory provides an overview of human trafficking, new typologies of human trafficking, behavioral and financial red flag indicators of human trafficking, case studies, and guidance to U.S. financial institutions. When reporting suspicious activity related to this advisory, FinCEN requests that financial institutions include the key term “HUMAN TRAFFICKING FIN-2020-A008” in SAR field 2 (Filing Institution Note to FinCEN) to indicate a connection between the suspicious activity being reported and the activities highlighted in the advisory.

On 10/13/2020, the Financial Crimes Enforcement Network (FinCEN) issued an advisory (FIN-2020-A007) to alert financial institutions to unemployment insurance fraud observed during the pandemic. The advisory contains descriptions of the different fraud types, associated red flag indicators, and information on reporting suspicious activity.

On October 1, 2020, the US Department of the Treasury issued a pair of advisories regarding ransomware. The first advisory was issued by FinCEN and is titled Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments. This advisory provides information on the role of financial intermediaries in payments, ransomware trends and typologies, and related financial red flags.

The second advisory was issued by OFAC and is titled Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments. This advisory explains the sanctions risks associated with making ransomware payments. For example, some individuals or entities who install ransomware and demand payment are actually found on the OFAC list, making it illegal for businesses who get ransomware on their computers to pay these entities and regain access to their systems and data.

On 9/29/2020, FinCEN Director, Kenneth Blanco, presented a speech at the ACAMS Virtual AML Conference. After beginning the speech with a discussion on FinCEN’s response to the global health crisis, Director Blanco shared some fraud trends FinCEN is seeing related to COVID-19. Though much was a reiteration of applicable advisories issued by FinCEN, it was explained that the most common trend seen in COVID-19 related SARs involves fraudsters “targeting multiple COVID-19 related government stimulus programs, employing money mules and cyber techniques.”

On 9/16/20, the Financial Crimes Enforcement Network (FinCEN) issued an Advance Notice of Proposed Rulemaking (ANPRM) seeking public comment on a number of questions pertaining to potential regulatory amendments under the Bank Secrecy Act (BSA). Specifically, FinCEN explained in their advisory that they are seeking comment on creating a new AML program component, referred to as an “effective and reasonably designed” AML program component, so that financial institutions can be empowered to allocate resources more effectively. FinCEN also explained that this component would also seek to create an understanding between financial institutions and their regulators regarding which AML program elements are deemed necessary, while imposing minimal additional obligations under the existing supervisory framework.

On 9/14/2020, the Financial Action Task Force (FATF) issued a report called “Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing.” This 24-page report was designed to help government agencies detect whether virtual assets are being used for criminal activity. Specifically, the report highlights key red flag indicators - that were identified through more than 100 case studies - that could suggest criminal behavior. The red flag indicators included in the report could assist financial institutions in detecting and reporting suspicious activity related to virtual assets.

On 8/21/2020, the joint agencies (Federal Reserve, FDIC, FinCEN, NCUA, and OCC) issued a joint statement clarifying that Bank Secrecy Act (BSA) due diligence requirements for customers who may be considered “politically exposed persons” (PEPs) should be commensurate with the risks posed by the PEP relationship. Of particular note, the statement clarifies that PEPs refer to senior foreign individuals and that “the Agencies do not interpret the term “politically exposed persons” to include U.S. public officials.”