We can help you monitor your transactions
We can help you Know Your Customer (KYC)
Sometimes KYC is not enough
We can provide you with services to protect you and save you time and resources.
Hrbek Law assists clients navigating Anti Money Laundering (AML) regulations relevant to their industry—including real estate, fine art, insurance, accounting, legal, trust companies and other industries engaged financial transactions. At Hrbek Law we are experts in the existing legislation in the UK, the EU, and the US Bank Secrecy Act (BSA) and proposed legislation. Our team has a head start in this practice area thanks to team members with extensive experience in both bank investigations and Treasury regulations.
We help industries that experts have listed as easy targets for money laundering. When we began this service, we provided anti-money laundering services to the fine arts industry. Extensive international regulations exist for the art industry and fine art sales provide a very popular market for money launderers. Hrbek Law now serves all industries that need protection from money launderers.
DUE DILIGENCE & AML PROCEDURES
The BSA and international regulations require industries brought under the regulations to implement the following procedures:
We can help you conduct a self-risk assessment acknowledging and reflecting on what the main money laundering risks a company faces. These risks are based upon its size, nature of its customs base, average cost of service, geographic location of the company.
We can help you establish procedures based on applicable regulations and just plain due diligence by establishing procedures by which it verifies its customers identity, their political exposure, geographic affiliations, source of wealth, source of funds and other industry-specific risk factors, including those relevant to each specific transaction. These procedures shall guide the company’s Know Your Customer (KYC) Due Diligence for each individual transaction, including when Enhanced Due Diligence should be conducted.
We can help you keep complete and secure records for each step of the KYC process, including how, why and by whom decisions regarding whether to continue or halt a transaction are made. As the information collected during the KYC process includes personal identifying information, international and certain state (including New York, under the SHIELD Act and California, under the CCPA) required information to be maintained in a secure environment.
Regardless of whether or not your business is currently required to strictly adhere to the BSA or international regulations, many of these Due Diligence procedures make sense to implement as a type of insurance policy for your business. Transacting with an individual or country that is sanctioned or getting caught up in a transaction that involves fraud or money laundering is always illegal and enforcement agencies will impose fines or criminal penalties.
The growth of sanctions baring financial transactions with countries or individuals as a function of US and international policies has greatly increased against Russian oligarchs since the start of the war in the Ukraine. Transacting with a sanctioned individual or country and violating an embargo is a crime. KYC and other Due Diligence procedures protect businesses from being unwittingly caught up in such illicit transactions,
Moreover, US industries are likely subject to the money laundering prevention laws of the countries where they engage in transactions with international persons or entities, whether in person or online.
RECENT US LEGISLATION
In response to the Panama Papers, Congress attempted to pass two different bills, with little success. The purpose of both bills—the Anti-Money Laundering Act of 2020 (AMLA) and the ENABLERS Act of 2022—was to expand the number of industries required to follow the money laundering regulations under the BSA. Currently, the BSA rules are applied to what are defined as “financial institutions.” The two bills proposed designate additional industries, including real estate, fine art and antiquity sales—as well as the insurance, accounting, legal, trust companies, and other industries engaged in financial transactions—as “financial institutions.” Antiquities dealers were brought under the BSA through the AMLA and—should the ENABLERS Act have passed—other industries would be required to comply with the BSA AML prevention procedures. It is hoped that a new version of the ENABLERS Act will be proposed in 2023.
Other acts, passed at the Congressional and New York State levels, were designed to limit the ability of money launders to easily enter the financial market without consequence. For example, in 2024, the Corporate Transparency Act (CTA) will go into effect. The CTA requires the majority of incorporated companies to register with the applicable governing body and provide beneficial ownership information. Through registration, it is hoped that illegal transactions can be more easily investigated and there is less likelihood of shielding money laundering by complicated business structures, an in the Panama Papers scandal wherein thousands of secret entities were discovered to have purchased property or other valuables with money from illegal sources.
Another law that has had an effect on preventing money laundering through the purchase of real estate. The Geographic Targeting Orders, require title companies, active in specified geographic areas, to report cash real estate transactions over a specified sum.
And finally, the amended Whistleblowers Act under the BSA covers more potential errors that may result in money laundering, and guarantees rewards with ready funds.
Needless to say—if you are about to enter in a high cost or international transaction, it would be wise to engage in a serious due diligence. Even unknowing participants in money laundering face the following risks: seizure of accounts, loss of any profit gained from the illicit transaction, harm to your reputation and potential criminal charges. The act of carrying out appropriate due diligence and transaction monitoring will serve as insurance policy for any unknowing involvement in money laundering, fraudulent, or sanctioned transactions.
Hrbek Law can help you get the insurance you need by creating due diligence and compliance programs.