Responding to 311 special measures
Preparing for 311 designations begins with proactive risk management. Institutions should ensure their AML/CFT programs can adapt quickly when FinCEN issues new advisories. Consider the following actions:
- Update your customer due diligence (CDD) program to flag relationships that may intersect with jurisdictions or industries affected by relevant regulations.
- Review and revise transaction monitoring scenarios to include geographic risk indicators tied to new 311 designations, such as regions in Mexico with known cartel activity.
- Train AML and fraud teams on recent designations and the operational impact of the five levels of special measures.
- Document your institution’s response plan, including internal communication strategies and escalation procedures for potential exposure.
Institutions that demonstrate to regulators their preparedness to respond quickly and effectively to FinCEN’s use of 311 special measures reinforce their commitment to compliance and reduce reputational risk.
Beyond compliance
While 311 designations may seem punitive, they can also be used as a catalyst to evaluate your institution’s overall financial crime risk strategy. FinCEN’s action against the Mexican casinos highlights the need for robust internal controls, not only to comply with regulations, but to protect your institution from being an unwitting conduit for criminal activity.
These designations can also serve as a valuable training opportunity. Use real-world examples, like the Mexican casino case, to conduct tabletop exercises or scenario testing. What would happen if your institution discovered a customer sending wires to one of the named casinos? Would your staff recognize the risk? Would you file a SAR?
By aligning your AML efforts with FinCEN’s enforcement priorities, you build credibility with regulators and position your institution as a stronghold against illicit finance.
Stay vigilant
FinCEN may not use 311 designations often, but when they do, they matter. Financial institutions must closely monitor these actions because they often signal shifting regulatory priorities and geopolitical developments with direct consequences for risk assessments, due diligence, and monitoring programs.
FinCEN’s use of 311 special measures is a reminder that compliance is not static. Financial crime risks shift rapidly, and institutions must be equipped to adjust their policies, systems, and staff training in real-time. By understanding the implications of 311 actions, like those targeting Mexican casinos, and acting accordingly, financial institutions can strengthen their compliance posture and protect their customers and communities.
