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September 20, 2020

Washington, D.C.—Today the Institute of International Finance (IIF) released the following statement after the publication of Buzzfeed News and the ICIJ’s FinCEN Files report:

“The findings of today’s reports once again emphasize the need to pursue intelligence-led changes for financial crime risk management - driven by meaningful improvements to public-private sector cooperation and cross-border information sharing, coupled with the use of technology - to enhance the global anti-financial crime framework,” said Tim Adams, IIF President and CEO. “I hope these findings spur urgent action from policymakers to enact needed reforms. As noted in today’s reports, the impacts of financial crime are felt beyond just the financial sector – it poses grave threats to society as a whole.”

With respect to public-private cooperation, it is critical to strengthen the feedback channel from law enforcement to the private sector with regard to suspicious activity reports (SARs) that are filed, in order to target risk management in a more effective way.

SARs provide a valuable source of intelligence, however, leveraging the combined powers of the public and private sector is the only way to curtail illicit flows and bring those responsible for these crimes to justice.

There is a balance to be struck between managing financial crime risk and ensuring access to the financial system for legitimate customers. Globally, the SARs Regime is one part of maintaining that balance and should be coupled with operational and tactical intelligence sharing.

Of similar importance is identifying the true owner or individual exercising control in a business relationship in a reliable and transparent fashion through beneficial ownership information reform.

We encourage policymakers to revisit the IIF white paper, “The Global Framework for Fighting Financial Crime,” which provides the following common-sense recommendations to improving the legal, regulatory framework, and risk management toolkit:

  1. Systemic architectural improvements for financial crime risk management
  2. Advancing public/private sector cooperation
  3. Improving cross-border and domestic information sharing
  4. Improving the use and quality of data
  5. Reforming Suspicious Activity Reporting regimes
  6. Mitigating the inconsistent or incoherent implementation of financial crime compliance standards/guidance and providing regulatory clarity
  7. Increasing and improving the use of technology to combat illicit finance

The complete white paper is available here.

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The Institute of International Finance is the global association of the financial industry, with close to 450 members from more than 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.