Trump Administration Delays Anti-Money Laundering Rules Amidst Intensified Enforcement

Strategic Insights -

The Trump Administration has caused a stir in the compliance community by delaying the implementation of anti-money laundering (AML) rules initiated by the Biden Administration. FinCEN announced that it will delay the effectiveness of the Investment Adviser AML Program Rule until January 1, 2028, and plans to revisit its scope through new rulemaking. This move comes as the Administration is intensifying AML and sanctions enforcement, with a clear emphasis on cross-border risks and non-U.S. actors.

Despite the delay in rule implementation, AML compliance obligations are expanding, and investment advisers remain subject to OFAC sanctions rules. Investment advisers will have an opportunity to comment on a revised Investment Adviser AML Rule and a revised CIP proposal during the upcoming rulemaking process and should consider participating to shape the revised rules. To maintain voluntary AML programs, investment advisers may wish to continue aligning their policies and procedures with sanctions obligations and broader risk-based compliance principles.

Key Takeaways:

  • The Trump Administration has delayed the effectiveness of the Investment Adviser AML Program Rule until January 1, 2028, and plans to revisit its scope through new rulemaking.
  • FinCEN also signaled its intent to revisit the proposed Customer Identification Program ("CIP") rule issued jointly with the SEC.
  • The delay in rule implementation does not affect the existing AML compliance obligations, and investment advisers remain subject to OFAC sanctions rules.
  • Investment advisers will have an opportunity to comment on a revised Investment Adviser AML Rule and a revised CIP proposal during the upcoming rulemaking process.
  • The Administration's focus on AML and sanctions enforcement is clear, with a particular emphasis on cross-border risks and non-U.S. actors.
  • Recent enforcement actions, including in the "financial gatekeeper" sector, demonstrate the Administration's priorities.
  • Self-disclosure, cooperation, and proactive remediation remain critical in enforcement outcomes.

Statistics:

  • The Investment Adviser AML Rule was originally scheduled to take effect on January 1, 2026.
  • FinCEN delayed the effective date of the Investment Adviser AML Rule by two years, until January 1, 2028.
  • The new effective date for the Investment Adviser AML Rule is January 1, 2028.
  • OFAC has issued multi-million-dollar settlements to financial institutions for violations involving sanctions evasion and lack of sufficient compliance controls.

Sources:

  • FinCEN
  • SEC
  • U.S. Department of the Treasury
  • Criminal Division of the U.S. Department of Justice
  • Securities Industry and Financial Markets Association (SIFMA)
  • Dechert LLP