The Financial Crimes Enforcement Network (FinCEN): What US Firms Need to Know

Published: 3 February 2025

Around $300 billion is laundered in the United States every year, a trend which undermines the integrity of both the US and global economies, and perpetuates ongoing criminal enterprises. To address that threat, the US government has passed strict financial regulations, and established the Financial Crimes Enforcement Network (FinCEN) as the country’s primary financial regulator. 

In this post, we’re going to explore the regulatory function of FinCEN, and some of the key regulations that it is responsible for enforcing. 

What is FinCEN?

FinCEN provides regulatory oversight for banks and financial institutions operating in the US. 

Established in 1990, FinCEN is a bureau of the US Department of the Treasury, and is headquartered in Virginia. FinCEN’s stated mission is to “safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, and promote national security through strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.”

FinCEN’s Role and Responsibilities

In order to fulfil its mission, FinCEN works to enforce US financial regulations by monitoring financial institutions, and collecting and analysing financial data for indications of criminal activity. It also works with other government departments, law enforcement authorities, and foreign counterparts to combat domestic and international financial crime. 

In its supervisory role, FinCEN’s day-to-day duties include:

  • Monitoring corporate compliance with US financial regulations, such as the Bank Secrecy Act. 
  • Collecting and analysing data and financial reports from US financial institutions. 
  • Analysing financial intelligence, including trends and patterns, that might indicate criminal activity. 
  • Enforcement of regulatory noncompliance penalties. 
  • Assisting law enforcement agencies with financial investigations. 
  • Providing compliance guidance and other educational materials to US banks and financial institutions.
  • Liaising with foreign counterparts and international regulators, such as the Financial Action Task Force (FATF), in the global fight against financial crime. 

Key US Financial Regulations 

FinCEN is responsible for supervising compliance with the US’ financial regulations, including the following key articles of legislation:

The Bank Secrecy Act

The Bank Secrecy Act (BSA) is the US’ primary article of anti-money laundering (AML) legislation. Introduced in 1970, the BSA imposes a range of AML compliance requirements on banks and financial institutions, including the implementation of customer screening, and financial reporting and record-keeping measures. 

The Patriot Act

Passed in 2001 in the wake of the September 11 terror attacks, the Patriot Act is a counter-financing of terrorism (CFT) regulation, and an amendment to the BSA. The Patriot Act gives US law enforcement agencies powers to investigate financial crimes, in addition to those conferred by the BSA. Notably, the Patriot Act imposes customer due diligence (CDD) and screening obligations on financial institutions, with an emphasis on cross-border payments and business relationships. 

The Anti-Money Laundering Act

When it came into effect in 2021, the Anti-Money Laundering Act (AMLA) represented the most significant reform of the US AML/CFT legislation since the Patriot Act. AMLA was introduced to address the risks posed by new technologies and criminal methodologies, but also set out increased penalties for money laundering, new protections for corporate whistleblowers, new beneficial ownership rules, and expanded international information sharing rules. 

Optimising FinCEN Compliance 

FinCEN applies the international AML/CFT compliance recommendations set out by the Financial Action Task Force. Following that standard, US firms must implement risk-based compliance solutions, performing risk assessments of their customers and deploying proportionate compliance responses to that risk.  

Risk-based compliance solutions should involve the following measures and controls: 

  • Customer identification: Firms must perform customer due diligence in order to identify their customers, and the beneficial owners of customer-entities.
  • Transaction screening: Firms should screen customer transactions for indications of criminal activity. Those indicators include unusual transaction patterns and transaction amounts, and transactions that involve high risk counterparties.
  • Adverse media screening: Since AML risk is often revealed in news media before it is officially confirmed, firms should implement global adverse media screening measures in order to capture changes in customer risk as soon as possible. 
  • Sanctions and watchlist screening: Firms must screen customers for a variety of AML risk characteristics, including politically exposed person (PEP) status, and designation on international sanctions lists

AML Screening Advantages

The US’ risk-based screening requirements, including the need to screen adverse media stories, mean that firms may have to collect and analyse vast amounts of financial data, from thousands of global data sources. To manage that burden, most firms need to lean into screening technology in order to automate as much of their screening process as possible, rather than relying on outdated manual search processes, fraught with the potential for human error.  

Beyond speed, efficiency and accuracy, automated screening platforms help firms take the pressure off compliance teams, and take advantage of emerging innovations and enablers, such as AI-powered analytics. In a fast-moving compliance environment like the US, automated screening solutions offer game-changing agility, enabling firms to react quickly to regulatory trends and emerging criminal methodologies, and, ultimately, make faster, stronger compliance decisions. 


Learn more about how Ripjar can help you comply with US AML regulations

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Last updated: 17 February 2025