The anti-money laundering (AML) laws in the United States form a complex and evolving legal framework designed to prevent criminals from using the US financial system to launder illicit proceeds and finance terrorism. The US AML regime is primarily governed by the Bank Secrecy Act (BSA) and enforced by various agencies such as the Financial Crimes Enforcement Network (FinCEN), the Department of Treasury, and other regulatory bodies.
Recent developments in 2024 and 2025 have expanded AML obligations to new sectors such as investment advisers and the art market, reflecting the US government’s commitment to addressing emerging risks and closing regulatory gaps. The USA AML legal framework combines strict customer due diligence (CDD), suspicious activity reporting, governance requirements, and enforcement with heavy penalties.
Key AML Legislation and Regulatory Bodies
The Bank Secrecy Act (BSA)
The BSA, originally enacted in 1970, is the foundational statute for AML in the USA. It requires financial institutions to maintain records and file reports that are useful for detecting and preventing money laundering, tax evasion, and other financial crimes. This includes:
- Currency transaction reports (CTRs) for cash transactions over $10,000.
- Suspicious Activity Reports (SARs) whenever suspicious behavior or transactions are detected.
- Customer identification programs (CIP) as part of due diligence.
Financial Crimes Enforcement Network (FinCEN)
FinCEN, under the US Treasury, administers and enforces the BSA regulations, issues guidance, and coordinates with law enforcement agencies. It issues directives on compliance, risk assessment, and filing of SARs. FinCEN also implements updates designed to broaden the scope of regulated entities.
Recent Expansion to Investment Advisers
In September 2024, FinCEN finalized a significant rule extending AML/CFT obligations to Registered Investment Advisers (RIAs) and Exempt Reporting Advisers (ERAs), a sector previously unregulated under AML laws. This rule affects about 15,000 RIAs managing over $120 trillion in assets and over 6,000 ERAs managing over $5 trillion in assets. These advisers must now create AML programs, conduct risk assessments, implement CDD, file SARs, and appoint compliance officers.
Due to concerns about cost and implementation, FinCEN announced in July 2025 a postponement of the effective date of this new rule from January 1, 2026, to January 1, 2028.
The Art Market Integrity Act (Proposed)
A bipartisan group of US Senators in July 2025 proposed the Art Market Integrity Act, aiming to regulate the US art market to prevent it being exploited for money laundering and terrorist financing. This legislation would impose AML obligations on art dealers, galleries, and related businesses, aligning US law more closely with the stringent AML frameworks seen in the UK and EU.
Core AML Requirements in the USA
Customer Due Diligence and Know Your Customer (KYC)
Customer due diligence and KYC requirements are central to US AML obligations. Financial institutions and covered entities must:
- Verify the identity of customers and beneficial owners.
- Assess risks related to clients and transactions.
- Monitor ongoing business relationships for suspicious activity.
- Apply enhanced due diligence for high-risk customers, including politically exposed persons (PEPs) and those linked to high-risk jurisdictions.
Suspicious Activity Reporting (SAR)
Covered entities are mandated to file SARs with FinCEN upon detecting transactions or activities indicative of money laundering, fraud, or terrorist financing. SARs are a principal investigative tool used by US law enforcement, helping to detect and prevent illicit finance.
Record-Keeping and Transaction Monitoring
Entities must maintain all relevant customer and transaction records, enabling investigation and audit trails. Effective transaction monitoring systems are often supported by automated tools and artificial intelligence to detect unusual patterns.
Internal Controls and Compliance Programs
Entities subject to AML laws must establish dedicated compliance programs, which include:
- Appointment of compliance officers.
- Regular risk assessments.
- Staff training and awareness.
- Independent audits and program reviews.
Senior management is held accountable for ensuring that compliance measures are adequate and effective.
Sanctions and Penalties
AML violations may result in severe penalties such as:
- Substantial fines.
- Business license revocations.
- Criminal prosecutions, including imprisonment.
- Civil sanctions against institutions and individuals.
US enforcement is notable for its aggressiveness and high-profile prosecutions.
Emerging Trends and Challenges
Technology and Digitalization
The US AML framework is increasingly embracing technology, from AI-enhanced monitoring systems to digital onboarding and identity verification. These tools aim to improve detection of complex laundering schemes while managing compliance costs.
High-Risk Jurisdictions
The US regularly updates its list of high-risk countries and jurisdictions subject to enhanced due diligence. Transactions involving these regions require increased scrutiny and senior management approvals.
Cross-Border Cooperation
Given the global nature of financial crime, US authorities actively cooperate with international partners, sharing intelligence and harmonizing AML enforcement efforts.
The anti-money laundering laws in the USA represent a comprehensive and dynamic system with robust regulations spanning traditional financial sectors to emerging industries like investment advisers and art markets. It combines stringent due diligence, reporting, internal controls, and rigorous enforcement to protect the financial system from illicit use.
Ongoing expansions and reforms reflect the US commitment to adapting its AML framework to new risks and technological advances, while cooperation with global counterparts remains a critical component in the fight against money laundering and terrorist financing.