The Anti-Money Laundering Act (AMLA) is one of the most significant pieces of financial legislation introduced in recent years to combat illicit financial activity. Enacted as part of the U.S. National Defense Authorization Act for Fiscal Year 2021, and complemented by earlier UK legislation in 2018, AMLA aims to modernize and enhance the regulatory framework that governs anti-money laundering (AML) efforts. It reshapes how financial institutions and covered entities detect, report, and manage money laundering risks.
With expanded authority for the Financial Crimes Enforcement Network (FinCEN), greater emphasis on beneficial ownership transparency, and a push toward technological innovation in compliance, AMLA signals a firm shift toward proactive, intelligence-driven financial crime oversight.
What Does AMLA 2020 in the U.S. Include?
The 2020 U.S. AMLA marked a dramatic expansion of existing AML regulations. It is considered the most sweeping update to U.S. AML law since the USA PATRIOT Act.
Key Provisions of the 2020 AMLA
Beneficial ownership reporting: Corporations and LLCs must disclose beneficial owners to FinCEN, as outlined in FinCEN’s 2024 guidance.
Whistle-blower protections: Stronger incentives and protections are given to individuals who report AML violations.
Expanded FinCEN authority: FinCEN is empowered to establish a centralized database of beneficial ownership information and develop technological tools for enforcement.
Risk-based approach support: Encourages financial institutions to use innovative tools such as AI and machine learning to tailor AML efforts to specific risks.
Legal Basis in U.S. Code
The AMLA amends sections of Title 31 of the U.S. Code, which governs financial crimes and regulatory powers related to money laundering. These updates give U.S. agencies broader oversight over suspicious activities and complex international transactions.
What About the UK’s Anti-Money Laundering Act 2018?
The UK version of the Anti-Money Laundering Act, passed in 2018, plays a similar role but within the context of British law. It falls under the Sanctions and Anti-Money Laundering Act 2018, allowing the UK to impose sanctions and enforce AML rules post-Brexit.
Key UK Features
Post-Brexit independence: Enables the UK to enforce sanctions independently of EU legislation.
Focus on international compliance: Aims to meet evolving global standards, especially those outlined by the FATF.
Enhanced due diligence: Tightens expectations around customer due diligence, particularly for politically exposed persons and high-risk third countries.
How AMLA Affects Financial Institutions and Compliance Teams
Both versions of the AMLA have elevated the compliance stakes for banks, FinTech's, and other financial entities.
Operational Implications
Enhanced Know Your Customer (KYC) requirements
Stronger data governance and reporting timelines
Increased collaboration with regulators and law enforcement
Requirements for automated transaction monitoring and suspicious activity reporting (SARs)
Technology and AML Innovation
The AMLA’s provisions support the integration of advanced RegTech tools, particularly in areas like real-time screening, alert adjudication, and machine learning in AML. These tools help institutions reduce false positives, improve case resolution speed, and meet new regulatory expectations efficiently.
Why AMLA Matters More Than Ever
The global push for financial transparency continues to accelerate. AMLA represents a critical evolution in the fight against money laundering, tax evasion, and terrorist financing. As criminal networks become more sophisticated, legislation like AMLA ensures that institutions remain capable of identifying and preventing suspicious activities, with the right legal backing and technology to do so.
