9/11 Twenty-Five Years Later: Part 3: Alex Dill - Patriot Act: The AML Response to Terrorist Threats

Ed. Note-Five years ago, I looked back on 9/11 in a 20 year retrospective. This week is the 25th anniversary of that event. I am rerunning this award winning podcast so that we never forget. On the 20th anniversary of the 9/11 terrorist attack, Tom Fox and guests look back on the tragic event and what it meant for them personally, as well as how it impacted the world of compliance. Today Tom’s guest is Alex Dill. Alex is a scholar and professor specializing in financial regulation, risk management and compliance. He also has corporate experience in ​​the ethics of business practices in finance, bankruptcy, bond covenants, and debt markets. He joins Tom to talk about The Patriot Act’s impact on responding to terrorist threats. How 9/11 Changed AML Before 9/11, AML regulations were very lax and backward looking. The focus was on prosecuting crimes that were already committed, and prosecuting money laundering, more so than the financing of terrorism. Banks weren’t engaging in meaningful customer due diligence as they felt the process invasive. After 9/11, this all changed. Law enforcement agencies and financial institutions revamped their policies and procedures to take a more preventive approach to AML and financing of terrorism. This led to The Patriot Act. The Financial Response Tom asks Alex if he saw a similar regulatory response with non-financial institutions with respect to Patriot Act AML procedures post-9/11. “There was a huge amount of rulemaking that had to be done,” Alex responds. He adds that public companies adopted customer due diligence, and that it was applied more broadly to different sectors, but with a risk-based approach. Companies now had to file suspicious activity reports, not just banks. Customer identification was also introduced. “The Patriot Act sought to encourage cooperation among law enforcement agencies, and among the financial institutions themselves to share information and obtain information from foreign law enforcement authorities,” Alex tells Tom. The Challenge With The Patriot Act Alex explains to Tom that there are challenges with the Patriot Act. A major challenge is detecting the financing that goes into these attacks. Funds that finance these actions are sourced from both legal and illegal means, and that is a major issue. The transaction amount can be small, and this might pose a risk to some compliance officers. Technology in Anti-Terrorism Alex remarks that technology is very important moving forward in the fight against terrorism, as it has changed the way we function in our world. The downside of technology is that it has also helped create some of the compliance issues we have today. Social media platforms have helped to create polarization in the society, and programs like cryptocurrency have been used by criminals for money laundering, and financing terrorism. However, Alex ends with a positive note stating that the AML act of 2020 has been doing the work to help curb these issues. Resources Alex Dill | ⁠LinkedIn⁠ | ⁠Twitter Learn more about your ad choices. Visit megaphone.fm/adchoices