Leading MSB Industry Associations Introduce Best Practices For Anti-Money Laundering

The introduction of the best practices for anti-money laundering by leading MSB industry associations marks a significant advancement in safeguarding the financial system and combating de-risking. 

Major leading associations constituting the Electronic Transactions Association (ETA), the Money Services Business Association (MSBA), and The Money Service Round Table (TMSRT) unveiled the release of the best practices for US Money Services Businesses regarding anti-money laundering and counter-financing of terrorism (AML/CFT) compliance programs on May 11. 

Instigated by the MSB industry members, this extensive set of the finest practices highlights the Money Services Businesses (MSB) industry’s efforts based on the completion of two comprehensive goals. The first is to refine AML/CFT compliance standards for providing a safe and compliant environment for non-bank financial services amid rapidly evolving menaces to the US monetary system while the second focuses on addressing the challenges associated with forced de-risking.

Agreeing to this, the President and CEO of The Conference of the State Bank Supervisors (CSBS) John W. Ryan, stated “The effort of the industry to identify and distribute the best practices for the US money services businesses: AML/CFT compliance programs holds a significant mark in combating de-risking”. He further encourages the trade associations to step up and continue discussions concerning this issue.

Positive feedback from regulators, law enforcement agencies, banks and policymakers were received to create a set of guidelines representing MSB’s industry’s views on mindful approaches to MSB’s AML/CFT compliance that they should be implied by recognizing the risk associated according to its respective size, geographic area, business model and products being offered. 

As per CSBS, state authorized MSBs operate more than $1.8 trillion in transactions annually which emphasises the dependence on access to banking services as they play an integral role in drafting these best practices. For addressing the issue of deterring forced de-risking, the authors believe that banks shall be encouraged more often to provide services to MSBs.

Discussion conducted among Bank Secrecy Act Advisory Group (BSAAG) members were helpful as ETA, MSBA and TMSRT acknowledged the industry-driven effort to improve compliance with AML-CFT regulations. The significance of the code of conduct and best practices were reported by the Government Accounting Office (GAO) that could lead to improve the risk management in areas of AML/CFT and sanction laws.

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