Saturday, December 16, 2023



This week's news from the Financial Crimes Enforcement Network (FinCEN) includes the promotion f two senior officials there, who have been in acting roles, to the status of permanent positions. Both are attorneys with prior experience in that agency, or elsewhere in government, or both. Neither individual, nor the current FinCEN Director, have apparently ever served as Director of Compliance, at a major US bank, or anywhere else in a frontline role in the private sector as compliance officer; Check their resumes.

This, in my humble opinion, is a major  mistake in policy. Choosing lawyers who go from working in the US Attorney's Office somewhere, or from Treasury, to fill the most important slots at FinCEN means that there's nobody in command who has actual first-hand experience dealing with OFAC sanctions, enhanced due diligence, clients onboarding amd transaction monitoring, at any level.

FinCEN needs leaders who have been on the frontlines of AML/CFT, to offer a practical viewpoint, drawn from work experience, as a necessary perspective on enforcement, regulation, and simply understanding what it's like to work in the commercial sector with the obligations and responsibilities of regulatory compliance, under deadline pressures and within a business environment. While I always believe that only lawyers have the necessary educational background to fully understand the complexities of sanctions applications, those same lawyers need to have been in the real, financial, world to appreciate how such sanctions operate in the reality of banking compliance.

I am not advocating that everyone at FinCEN be a former director of compliance at a financial institution, only that some of the positions be filled with individuals with diverse experience, which includes private sector compliance. Remember also that people who fulfill the role of compliance director as a major US bank got there due to their own prior experience, whether it be as a former military intelligence officer, former law enforcement, or simply came up through the ranks over several years of hard and successful compliance work in a variety of positions. All this can only help FinCEN in its primary AML/CFT and sanctions control role in our financial structure. Diversify, please, FinCEN, drawing from the private financial sector, in addition to your current sources of leaders.


NOTE: I have always felt that FinCEN also needs former, reformed, financial criminals, especially ex-money launderers, on its staff, for a dose of reality from the other side, but that will, unfortunately, never happen. Only in the private financial sector do wise executives see the need for individuals who were formerly their adversaries to complement traditional AML/CFT compliance. US Govt is simply not that flexible, not since the Vietnam War, anyway.

  America's use of former Viet Cong who rallied over to the government side to use their experience against the North Vietnamese Army.

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