FinCEN Exchange Questions and Answers

1. What is FinCEN Exchange?

The FinCEN Exchange is FinCEN’s voluntary public-private information sharing partnership among law enforcement, financial institutions, and FinCEN aimed at effectively and efficiently combating money laundering, terrorism financing, organized crime, and other financial crimes; protecting the financial system from illicit use; and promoting national security. FinCEN believes that financial information sharing is most effective when information flows in both directions between the public and private sectors in specific authorized ways. Operating under FinCEN’s legal authority under 31 U.S.C. § 310(b)(2)(E), as well as other authorities (“FinCEN authorities”), FinCEN created the FinCEN Exchange to provide financial institutions with additional information about priority issues on a more regularized and frequent basis. Providing financial institutions with key government-provided information allows financial institutions to focus on specific illicit finance and national security threats under their existing Bank Secrecy Act (BSA) compliance obligations and, when appropriate, file Suspicious Activity Reports (SARs). In turn, this increased reporting assists FinCEN and law enforcement in detecting, preventing, and prosecuting terrorism, organized crime, money laundering, and other financial crimes.

Pursuant to its FinCEN authorities, FinCEN is authorized to furnish research, analytical, and informational services to financial institutions in the interest of detection, prevention, and prosecution of terrorism, organized crime, weapons proliferation, money laundering, and other financial crimes. Pursuant to this goal, FinCEN intends to leverage the private sector’s existing anti-money laundering/combating the financing of terrorism (AML/CFT) compliance programs by: 1) providing a program for sharing specific law enforcement-approved information and FinCEN information to financial institution participants; 2) receiving better quality and more useful information via SARs from financial institution participants that are equipped with government-provided information, feedback, and analysis; and 3) providing new typology information to the broader financial sector gained through FinCEN Exchange, as appropriate.

FinCEN will continue to work with law enforcement, financial institutions, and other regulatory agencies to develop, grow, and refine FinCEN Exchange so that the program and FinCEN continue to provide effective and innovative public-private information sharing on priority illicit finance and national security challenges.

For additional information about FinCEN Exchange, please see Treasury’s press release and Under Secretary Sigal Mandelker’s December 4, 2017 speech in which she publicly announced the launch of FinCEN Exchange.

2. How Does FinCEN Exchange Work?

FinCEN Exchange is a voluntary program built on partnering with law enforcement and financial institutions to effectively and efficiently detect and prevent terrorism financing, organized crime, money laundering, and other financial crimes. FinCEN works closely with law enforcement to identify investigations that would benefit from contextual information sharing with certain financial institutions pursuant to FinCEN’s authority found at 31 U.S.C. § 310(b)(2)(E), as well as other authorities (“FinCEN authorities”).

FinCEN Exchange’s initial program is convening regularly scheduled, and as-needed, operational briefings with law enforcement, FinCEN, and financial institutions to provide specific information on priority illicit finance and national security threats.

To convene a briefing, FinCEN, in consultation with law enforcement, as appropriate, will invite financial institutions to voluntarily participate when FinCEN has reason to believe that the financial institution may have, or be capable of providing, information relevant to (or have an ability to support) a particular FinCEN Exchange briefing. An invitation to participate in a specific matter is not an invitation to participate in all briefings. As part of a particular invitation, FinCEN will request, as appropriate, that the invited financial institution register, if it has not previously registered, under USA PATRIOT Act Section 314(b) before the financial institution participates in the FinCEN Exchange briefing. FinCEN oversees the registration of the 314(b) program, which is voluntary and authorizes particular information sharing among participating financial institutions. Registration under 314(b) or participation in a FinCEN Exchange briefing does not obligate the financial institution to participate in 314(b) private-to-private information sharing.

One of the anticipated outcomes of the FinCEN Exchange briefings is that those financial institutions that voluntarily participate will take back the information received from briefings and, in a manner that the financial institution considers reasonable and proportionate pursuant to the financial institution’s existing BSA reporting procedures, report any suspicious activity relevant to the information shared. In turn, this increased reporting assists FinCEN and law enforcement in detecting, preventing and prosecuting terrorism, organized crime, money laundering and other financial crimes. FinCEN will continue to work collaboratively with other regulators regarding FinCEN Exchange, including providing such regulators with priority topics and with a list of financial institutions that voluntarily partnered with law enforcement and/or FinCEN to participate in a FinCEN Exchange briefing to provide favorable acknowledgement of participation.

3. Is the FinCEN Exchange an enhancement to the 314(a) program?

FinCEN views FinCEN Exchange as a significant enhancement to its support of law enforcement and a further enhancement to its advisory role with financial institutions, but there are no changes to the 314(a) program. FinCEN’s authority found at 31 U.S.C. § 310(b)(2)(E), as well as other authorities provide FinCEN with the authorization to furnish information to financial institutions in the interest of detection, prevention, and prosecution of terrorism, organized crime, weapons proliferation, money laundering, and other financial crimes. The overall FinCEN Exchange program may use 314(a) requests; however, there are no changes to the 314(a) program.

4. How can a financial institution voluntarily participate in FinCEN Exchange?

FinCEN Exchange will bring together law enforcement, FinCEN, and different types of financial institutions from across the country to share information that can help identify vulnerabilities and disrupt terrorist financing, proliferation financing and other financial crimes. Currently, FinCEN Exchange is an invitation-based program and is not a registration-based program. FinCEN encourages all types of financial institutions to reach out to FinCEN with ideas on how particular sectors can work collectively and together with other financial sectors and law enforcement through FinCEN Exchange to tackle particular types of illicit activity that the private sector has identified. FinCEN intends to develop additional mechanisms to continue to receive input from all types of financial institutions and FinCEN encourages financial institutions to correspond with FinCEN regarding innovative ways on which a financial institution can support the priorities of FinCEN, such as information sharing.

Upon vetting feedback that FinCEN receives and in consultation with law enforcement, as appropriate, FinCEN will invite financial institutions to voluntarily participate when FinCEN believes that the financial institution may have information relevant to a particular FinCEN Exchange briefing or other ability to support the priorities within the scope of the particular engagement. An invitation to participate in a specific matter is not an invitation to participate in all FinCEN Exchange briefings.

As part of an extension of an invitation to a financial institution to participate in a particular FinCEN Exchange briefing, FinCEN will request that the invited financial institution register, if it has not previously registered, under USA PATRIOT Act Section 314(b) before the financial institution participates in the FinCEN Exchange briefing. FinCEN oversees the registration of the 314(b) program, which is voluntary and authorizes certain information sharing among participating financial institutions. However, registration under 314(b) or participation in a FinCEN Exchange briefing does not obligate the financial institution to participate in 314(b) private-to-private information sharing. Additionally, while FinCEN will request that a financial institution invited to participate in a particular FinCEN Exchange briefing respond to the invitation, such a response is voluntary.

For additional information about FinCEN Exchange, please see Treasury’s press release and Under Secretary Sigal Mandelker’s December 4, 2017 speech in which she publicly announced the launch of FinCEN Exchange.

5. How can law enforcement participate in FinCEN Exchange?

FinCEN Exchange will expand FinCEN’s cooperation with law enforcement components across the country to address priority issues. FinCEN Exchange is available for use by Federal, state, local, and foreign law enforcement on priority illicit finance and national security matters.

FinCEN encourages law enforcement components to reach out to their liaison at FinCEN to discuss collaboration through FinCEN Exchange.

If they do not have a FinCEN liaison, law enforcement components should send a request through the FinCEN Resource Center by emailing an inquiry to FRC@fincen.gov.

6. What are FinCEN’s regulatory expectations for financial institutions that voluntarily participate in FinCEN Exchange?

Participation in FinCEN Exchange is voluntary for financial institutions that receive an invitation from FinCEN. Although participation in FinCEN Exchange does not alter a financial institution’s regulatory obligations, FinCEN expects that financial institutions that voluntarily participate in a particular FinCEN Exchange briefing take back the information received from that briefing and, in a manner that the financial institution considers reasonable and proportionate pursuant to the financial institution’s existing BSA reporting procedures, report any suspicious activity relevant to the information shared.

As part of an extension of an invitation to a financial institution to participate in a particular FinCEN Exchange briefing, FinCEN will request that the invited financial institution register, if it has not previously registered, under USA PATRIOT Act Section 314(b) before the financial institution participates in the FinCEN Exchange briefing. FinCEN oversees the registration of the 314(b) program which is voluntary and that authorizes certain information sharing among participating financial institutions. However, registration under 314(b) or participation in a FinCEN Exchange briefing does not obligate the financial institution to participate in 314(b) private-to-private information sharing. Additionally, while FinCEN will request that a financial institution invited to participate in a particular FinCEN Exchange briefing respond to the invitation, such a response is voluntary.

FinCEN will continue to work collaboratively with other regulators regarding FinCEN Exchange, including providing such regulators with priority topics and a list of financial institutions that voluntarily partnered with law enforcement and/or FinCEN to participate in a FinCEN Exchange briefing.

Please also note that participation in a FinCEN Exchange briefing does not alter a bank’s obligations under the Right to Financial Privacy Act (12 U.S.C. § 3401, et seq.) Banks, under the protection of a safe harbor from liability, may notify the Federal government of information which may be relevant to a possible violation of law (12 U.S.C. § 3403(c)). In addition, as financial institutions have a safe harbor from liability when reporting suspicious transactions to FinCEN, financial institutions should continue to file a SAR or other appropriate response as a safe harbor mechanism (31 U.S.C. § 5318(g)(3)).

7. How should financial institutions handle the information they receive from a FinCEN Exchange briefing and does a FinCEN Exchange briefing require specific recordkeeping requirements?

A financial institution’s voluntary participation in FinCEN Exchange does not alter its regulatory obligations. FinCEN expects that financial institutions that voluntarily participate in a particular FinCEN Exchange briefing take back the information received from that briefing and, in a manner that the financial institution considers reasonable and proportionate pursuant to the financial institution’s existing BSA reporting procedures, report any suspicious activity relevant to the information shared. Participation in FinCEN Exchange does not create additional recordkeeping requirements beyond those already required for financial institutions under the BSA.

Financial institutions that voluntarily participate in a FinCEN Exchange briefing must adhere to any terms noted in FinCEN’s invitation, including any requirement of confidentiality given the sensitivity of information provided in the briefing. Failure to adhere to these conditions may result in the removal from, or declination to invite the financial institution from participating in, future FinCEN Exchange briefings.