The Software & Information Industry Association (SIIA) provided comments on FinCEN’s proposed Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) rule, emphasizing the importance of beneficial ownership information (BOI) and privacy-enhancing technologies (PETs). SIIA raised concerns that the Corporate Transparency Act (CTA), as currently interpreted, may hinder the effectiveness of AML/CFT programs by limiting access to BOI for third-party service providers. This restriction could particularly impact smaller financial institutions that rely on these providers for compliance with AML/CFT regulations. SIIA urged FinCEN to reconsider its stance on BOI access and explore regulatory reforms that would enhance the use of PETs in detecting suspicious financial activities while safeguarding data confidentiality.
Furthermore, SIIA highlighted the potential of PETs to improve AML/CFT compliance and suggested that FinCEN incentivize their adoption. Despite advances in PET technology, their widespread use has been hampered by existing legal and regulatory frameworks. SIIA recommended that FinCEN update its regulations to encourage the integration of PETs into data-sharing practices, thereby enhancing the detection and reporting of suspicious activities. By promoting the adoption of PETs, SIIA believes FinCEN can better align financial institutions’ risk management programs with government AML/CFT priorities while ensuring the privacy and security of financial data.
