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Yesterday, the Treasury Department reported that OFAC has sanctioned 26 companies, individuals, and vessels associated with the Al-Qatirji Company, a Syrian conglomerate responsible for generating hundreds of millions of dollars in revenue for Iran’s Islamic Revolutionary Guard Corps-Qods Force and the Houthis through the sale of Iranian oil to Syria and the People’s Republic of China.

For the names and identification information of the designated persons and vessels, see yesterday's BankersOnline OFAC Update.

OFAC has announced a $178,421 settlement with American Life Insurance Company (ALICO), a subsidiary of MetLife, Inc. ALICO agreed to settle its potential civil liability for 2,331 apparent violations of OFAC sanctions on Iran. The apparent violations related to insurance policies provided to entities in the United Arab Emirates that were owned or controlled by the Government of Iran. The settlement amount reflects OFAC's determination that the apparent violations were voluntarily self-disclosed and were not egregious.

FRBServices has announced the expansion of FedDetect Duplicate Notification for Check Services to include commercial checks, alongside its existing Treasury check notification service. Financial institutions can now see deposit information and images of potential duplicate items for commercial checks, supplementing their existing check fraud mitigation tools.

“Commercial checks remain a critically important form of payment, but they’re also vulnerable to fraud,” said Shonda Clay, FRFS executive vice president and chief of product and relationship management. “With the expansion of our FedDetect service, we are providing financial institutions of all sizes another powerful tool in their risk mitigation toolkit. Even better, we are now offering this service at no cost as part of our commitment to supporting depository institutions in the collective, industry-wide mission to combat fraud.”

The FedDetect service helps financial institutions mitigate loss of funds due to fraud or deposit capture errors by sending notices of potential duplicate Treasury or commercial checks across multiple payment channels and financial institutions.

The Financial Stability Board, an international organization that coordinates the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability, has issued a report, "The Financial Stability Implications of Artificial Intelligence," which outlines recent developments in the adoption of artificial intelligence (AI) in finance and their potential implications for financial stability.

The FSB stated that widespread adoption and more diverse use cases of AI have prompted the FSB to revisit its 2017 report on AI and machine learning in financial services. Financial firms currently use AI mainly to enhance internal operations and improve regulatory compliance, but generative AI (GenAI) and large language models have given rise to new use cases, such as document summation, information retrieval, and code generation. While many financial institutions appear to be taking a cautious approach to using GenAI, interest remains high and the technology’s accessibility could facilitate more rapid integration in financial services.

The report notes that—

• The rapid adoption of AI offers several benefits but may also amplify certain financial sector vulnerabilities, such as third-party dependencies, market correlations, cyber risk and model risk, potentially increasing systemic risk.
• While existing financial policy frameworks address many of the vulnerabilities associated with use of AI by financial institutions, more work may be needed to ensure that these frameworks are sufficiently comprehensive.
• Financial authorities should enhance monitoring of AI developments, assess whether financial policy frameworks are adequate, and enhance their regulatory and supervisory capabilities including by using AI-powered tools.

FinCEN has issued FIN-2024-Alert004 to help financial institutions identify fraud schemes associated with the use of deepfake media created with generative artificial intelligence (GenAI) tools. The alert explains typologies associated with these schemes, provides red flag indicators to assist with identifying and reporting related suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA). This alert is also part of the U.S. Department of the Treasury’s broader effort to provide financial institutions with information on the opportunities and challenges that may arise from the use of AI.

The CFPB has released a report, "State Consumer Privacy Laws and the Monetization of Consumer Financial Data," summarizing state laws that give consumers more control over their data, how these rights complement the protections under federal law, and the gaps in protection that result from state law exemptions for financial institutions subject to the Gramm-Leach-Bliley Act (GLBA) or the Fair Credit Reporting Act (FCRA).

The CFPB suggests that state policymakers should assess gaps in their state data privacy laws, and consider the importance of ensuring that their citizens are protected in instances where federal law currently has gaps or may be ineffective.

The Treasury Department yesterday announced that OFAC has sanctioned Abdel Rahman Joma’a Barakallah for his leadership role in the Rapid Support Forces (RSF), a primary party responsible for the ongoing violence against civilians in Sudan since April 2023.

For identification information on Barakallah and a notice on amendments to OFAC's Sudan Sanctions Regulations, see yesterday's BankersOnline OFAC Update.

FinCEN has reported its September 2024 outreach efforts on its Beneficial Ownership Reporting Rule requirements.

The report also included a list of upcoming events at which FinCEN representatives are scheduled to further disseminate BOI reporting information through the end of the year.

OFAC is asking for user opinions of their website. They are asking site users to take about ten minutes to complete a survey to help them improve their services, enhance users' experience, and create new features.

The survey can be found HERE.

Yesterday, the Treasury Department reported that OFAC has designated one individual and one entity who support a corrupt patronage network in Bosnia and Herzegovina (BiH) that is attempting to evade U.S. sanctions.

For the names and identification information of the designated individual and entity, see yesterday's BankersOnline OFAC Update.