The Financial Crimes Enforcement Network (FINCEN) in the United States needs more funding and a ‘Manhattan Project’ to develop new technologies in order to be more effective against money laundering, a think tank has said.

The Washington-based Global Financial Integrity (GFI) published a report this week arguing for a new approach for the US Financial Intelligence Unit.

The report, said: “This overstretched organization faces enormous challenges as it seeks to keep up with an ever-increasing number of Suspicious Activity Reports and Bank Secrecy Act reports while at the same time trying to keep abreast of a wave of new payment platforms that create additional and evolving money laundering risks.”

“To accomplish its goals FinCEN will require significantly more funding, an expanded workforce and some outside-the-box thinking as the agency prepares for a new generation of threats.” The report said FinCEN’s budget has increased just three percent since 2015 “despite a consistently growing workload.”

GFI convened a group of 19 anti-money laundering experts to develop recommendations to improve FinCEN’s effectiveness (see box below)

These include a “Manhattan Project” to identify and develop new technologies, a new AML data centre, the establishment of a knowledge and education hub for staff and giving the FinCEN director a seat on the Deputies Committee of the National Security Council.

The report said: ”We hope that these proposals provide President Biden and his administration, Congress and policy experts with a starting point to begin charting a more strategic policy direction and serious discussions about implementing concrete steps which will bolster the government’s AML effort in safeguarding critical US national security interests.

“An innovative, technology-centric, nimble and forward-looking approach is needed to effectively protect the country from the array of harms resulting from the laundering of illicit financial flows.”

The publication of the FinCEN Files last September raised questions about a system in which authorities including FinCEN receive millions of reports of suspicious activity every year.

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 The GFI recommendations in full

  1. Give the FinCEN Director a seat on the Deputies Committee of the National Security Council (NSC) to raise the agency’s stature within the national security community.
  2. Create in FinCEN a National Anti-Money Laundering Data Center (NALDC) for advanced data collection, synthesis, analysis and distribution to law enforcement for AML activity.
  3. Establish a “Manhattan Project” to identify, develop and operationalize state of the art technologies needed to fulfill the technology needs of a NALDC.
  4. Launch within FinCEN the National Anti-Money Laundering Training Center (NALTC) which will be an anti-money laundering knowledge and education hub for FinCEN staff, financial institution regulators, law enforcement at the federal, state and local levels and for state and federal prosecutors.
  5. Create a Strategic Analysis Team to examine emerging and long-term trends in money laundering methods and computer technologies to counter those threats.