More Compliance Costs, Criminal Prosecutions Likely in 2011,
Say Industry Leaders

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BY BRIAN MONROE and COLBY ADAMS

The new year won't be any easier on compliance officials at banks and money services businesses, and could get much harder depending on how U.S. officials implement new and proposed regulations, according to industry leaders.

That's because the U.S. Treasury Department has yet to set out final plans of how it will monitor cross-border wire transfers and regulate prepaid access products. Department proposals have elicited concerns from financial institutions that could be addressed by the Financial Crimes Enforcement Network (FinCEN) within the year.

And prosecutions for financial crime, deferred or consummated, will continue to be a big focus for law enforcement in general and the U.S. Justice Department in particular in 2011, industry observers said. Before the end of the year, prosecutors could make a "test case" out of at least one financial institution by charging it with criminal negligence or complicity in an institutional compliance failure, said a former regulator.

These and other observations on sanctions compliance, tax evasion and money laundering trends were made by the industry figures from banks, consultancies, regulatory agencies and law enforcement organizations, who talked with Moneylaundering.com/Compliance Advantage.com reporters Brian Monroe and Colby Adams. What follows are their thoughts on what to expect in 2011.

PREPAID ACCESS PRODUCTS/MOBILE BANKING

Jeff Sklar, managing director, SHC Consulting Group: "In 2011, mobile banking and mobile transactions will be issues for financial institutions as well as how the industry adapts and adopts programs for the prepaid rules. MSBs may have to modify how they review transactions and staffing or enhance training documents."