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BSA/AML Hot Topics: Combatting criminal activity with FinCEN’s 314a Program

COVID-19 Update

FinCEN recently released new guidance to financial institutions related to the pandemic. The first release consisted of a December 28, 2020, notice (FIN-2020-NTC4) intended to alert financial institutions about the potential for fraud, ransomware attacks, or similar types of criminal activity related to COVID-19 vaccines and their distribution. The second release consisted of a February 2, 2021 advisory (FIN-2021-A001) that focuses on health insurance and health care-related fraud. I would encourage your BSA staff to review this notice and advisory along with all others issued by FinCEN in response to the pandemic. They provide useful guidance to assist financial institutions in detecting, preventing, and reporting suspicious transactions related to COVID-19 related fraud.

Naomi Glass, AVP, BSA/AML Compliance Officer

In the war on terror, law enforcement’s ability to “follow the money” is key to counteracting ongoing criminal plots and thwarting future attacks against Americans both in the U.S. and abroad. In the wake of the September 11 terrorist attacks, Congress armed law enforcement with a go-to weapon to help track down the financials of those who are suspected of being involved in terrorism or money laundering. Hence, the Financial Crimes Enforcement Network’s (FinCEN’s) 314(a) Program was born, and it has been going strong ever since.

What is the 314(a) Program?

Section 314(a) of USA PATRIOT Act of 2001 provides a mechanism for law enforcement to be able to locate financial assets and recent transactions conducted by subjects who are suspected of engaging in terrorist acts or money-laundering activities. The 314(a) Program requires 14,000 financial institutions to search their records and identify the following:

  • Any current account maintained by a named subject;
  • Any account maintained by a named subject during the preceding 12 months; and,
  • Any transactions not linked to an account but conducted by a named subject during the preceding six months.

How the 314(a) Program works

Every other Tuesday, FinCEN will post two confidential lists of subjects for financial institutions to screen against when searching their records. One list is for individuals and the other list is for businesses. The number of subjects on these lists varies. For instance, one week there could be 40 subjects listed. Other weeks there could be over 400!

To access the lists, a designated point of contact for each financial institution must log into FinCEN’s Secure Information Sharing System (SISS) website. The point of contact then gets up to 14 days to search their financial intuition’s banking records and report any positive matches to FinCEN via the SISS website.

At that point, FinCEN will disseminate positive hit information to the law enforcement agency investigating the subject for criminal activity. Law enforcement can choose to subpoena the subject’s banking records now that it is known which financial institution to send the request to.

Urgent 314(a) requests in the aftermath of major events

On rare occasions, FinCEN will request that financial institutions conduct an off-cycle search of their records as soon as possible due to the request’s urgency. Such requests typically occur after a major event has taken place that has national security implications. In the past four years, FinCEN has only issued a handful of urgent 314(a) requests.

Most recently, FinCEN initiated two urgent 314(a) requests in the days and weeks following the riot at the U.S. Capitol on January 6. Prior to that, in early 2018, FinCEN submitted two urgent 314(a) requests after Robert Mueller indicted 13 Russians and three Russian entities on charges of conducting information warfare against the U.S. Finally, in 2017, FinCEN initiated an urgent 314(a) request four days after the "Unite the Right" rally was held in Charlottesville, Virginia.

Ultimately, FinCEN’s 314(a) Program has enabled financial institutions to assist law enforcement in tracking down the financial assets of suspected terrorists and money launderers. This can help thwart future attacks and criminal acts. I personally can’t think of any better way to spend a Tuesday!