‘Automation and Innovation’ to be Used by Treasury Department to Fight Illicit Finance

One of the key goals of the Treasury Department’s 2024 national illicit finance strategy will continue to be closing regulatory gaps that facilitate money laundering in the American banking system. It was released on May 16, 2024 states that the Treasury is still operationalizing the previously announced regulatory changes aimed at strengthening the country’s anti-money laundering/countering the funding of terrorism (AML/CFT) framework.

This is the main suggestion made by the strategy. The department shared its 2024 “National Strategy for Combatting Terrorist and Other Illicit Financing” strategy, with an aim to fight illicit money. Treasury underscored its continued efforts in the cryptocurrency space, which include the penalties it has imposed on certain exchanges and organizations such as Bitzlato and Lazarus, the agreement it reached with Binance, and the alerts it has issued concerning schemes involving the slaughtering of pigs. The yearly report outlines Treasury’s approach to investigating illicit financing as well as the potential impact of cryptocurrency laws on this problem.

‘Automation and Innovation’ To be Used by Treasury Department

The US government’s objectives and priorities for obstructing and stopping illicit financial activities that put risk on national security and economic prosperity are outlined in the US Department of the Treasury’s 2024 National Strategy for Combating Terrorist and Other Illicit Financing (2024 Strategy). The plan expands on the conclusions of the 2024 National Risk Assessments for Proliferation Financing, Terrorist Financing, and Money Laundering.

It outlines how the US will keep updating its counterterrorism and anti-money laundering (AML/CFT) framework, improve its efforts to combat criminal actors, and use technological advancements to reduce risks. As part of a larger plan to crack down on illegal funding, the U.S. Treasury Department intends to keep stepping up its efforts to combat money laundering and counter-terrorist financing involving digital assets.

US Treasury Department’s Strategy Overview

The 2024 strategy consists of 15 supporting actions that will help focus U.S. government efforts in the four core sectors. These actions include evaluating whether more action is required to close AML loopholes, updating frameworks for virtual asset activities, and improving risk-focused supervision and enforcement.

Four key priorities will guide the U.S. Department of Treasury’s strategy for the coming year: bridging legal and regulatory gaps, advancing a risk-based AML/CFT framework, improving law enforcement and international cooperation operational effectiveness, and using technology to combat illicit finance.

• Bringing the present AML/CFT framework’s legal and regulatory deficiencies under control is one of the most compelling goals. Specifically, the focus is on completing vulnerability assessments for other high-risk industries, operationalizing the beneficial ownership information register, and finalizing new regulations pertaining to the residential real estate and investment adviser sectors.
• Improving operational efficacy pertains to strengthening law enforcement’s and other government agencies’ capacities to combat illicit funding on a national and worldwide level.
• Using technology to combat illicit financing is one of the initiatives that may be the most innovative. This involve in creating fresh payment technologies, endorsing creative compliance protocols, and using automation to detect and avert problems before they arise.

Big Implications and Challenges

• It is possible to greatly enhance the entire national security environment by using technology and strengthening banking rules. Removing illicit actors’ ability to use the conventional financial system makes it more difficult for them to carry out their illegal operations.
• If there is any modification in strategy, it proves to be a big effect on the economy. By promoting more investment and economic stability, well-defined policies and efficient compliance controls help fortify the financial system as a whole. Financial institutions, however, must also adjust to these developments, which might initially result in financial difficulties.
• Some may contend that rights to privacy are violated by growing legislation and technology monitoring. Although this is a legitimate worry, in order to guarantee a practical and moral solution, security precautions must be balanced with privacy concerns.

Everything You Need to Know

In the battle against illicit money, the U.S. Department of Treasury’s 2024 strategy represents a major achievement. Advanced technology, well-defined laws, and strong international and local alliances may work together to improve both economic growth and national security.

Through emphasis on these crucial areas, the Treasury Department is establishing a thorough plan for next initiatives to reduce illegal financial activity. Lastly, acknowledging the advantages of responsible technology growth, the plan supports private sector compliance systems, innovates and automates the fight against illicit money, and fosters the creation of new payment technologies.

Peter Horadan is a finance graduate who has been active in the field since 2015. He enjoys writing about stimulus programs, social security, and other U.S. finance topics to help Americans better understand their finances.