Failure to adapt to the latest anti-money laundering (AML) requirements in the United States can expose international companies to account restrictions, regulatory penalties, and loss of correspondent banking relationships. The US federal AML regime has undergone significant tightening, and businesses operating through Delaware LLC structures or maintaining US bank accounts are directly in the crosshairs. This alert summarises what has changed, who is affected, and what your organisation must do now.
Expanded AML obligations under US banking and financial legislation now require a broader set of companies – including foreign-owned entities and intermediaries – to implement rigorous know your customer (KYC) and beneficial owner verification programmes. Entities that trigger the relevant thresholds must file updated ownership disclosures and maintain transaction monitoring systems aligned with federal standards. Non-compliant businesses risk account termination, SEC referral, and civil enforcement action before a US District Court.
This alert covers the core regulatory changes, the categories of business most immediately at risk, and five concrete actions your compliance team should take without delay.
What has changed: the regulatory development and effective date
US anti-money laundering regulation operates under federal banking and financial crime legislation, with oversight shared between the Financial Crimes Enforcement Network (FinCEN), federal banking regulators, and the SEC. Recent amendments to the AML and beneficial owner reporting rules represent the most substantial overhaul of this body of law in over two decades.
The pivotal change centres on the beneficial owner registry now administered by FinCEN. Under the updated rules, most corporations, limited liability companies – including the widely used Delaware LLC – and similar entities formed or registered in the United States must file beneficial ownership information (BOI) reports. Foreign companies registered to do business in any US state are equally subject to these requirements. The initial effective date for existing entities passed in early 2025. While newly formed entities face a shorter reporting window from the date of formation.
Simultaneously, federal banking legislation has imposed heightened customer due diligence (CDD) obligations on financial institutions. Banks are now required to collect, verify, and refresh KYC data at defined intervals. This directly affects bank account opening procedures. Institutions that identify gaps in their customer files are suspending or closing accounts without notice.
Correspondent banking relationships have also come under sharper scrutiny. Foreign banks and payment intermediaries with US dollar clearing arrangements face enhanced monitoring requirements. Where US institutions detect AML deficiencies in a correspondent's home jurisdiction, they are terminating those relationships. International companies that rely on US dollar correspondent banking for trade finance or credit facility access are particularly exposed.
For companies with securities registered or traded in the United States, the SEC has reinforced AML-adjacent disclosure obligations. Failures identified during examinations are being referred for enforcement, and US District Court proceedings have followed in a number of recent matters.
Who is affected: threshold criteria and business categories
The new obligations apply broadly, but certain categories face the most acute compliance burden. Your organisation is directly affected if it falls into one or more of the following groups.
- Foreign-owned US entities: Any company formed in the United States – particularly a Delaware LLC or other pass-through structure – with one or more foreign beneficial owners must file BOI disclosures. The definition of beneficial owner covers individuals exercising substantial control or holding a significant ownership interest.
- Companies with US bank accounts: All corporate account holders are subject to refreshed KYC requirements. Banks are contacting customers to request updated documentation. Failure to respond within the bank's deadline results in account restriction or closure.
- Businesses using correspondent banking: Companies whose transactions clear in US dollars through correspondent banking chains must ensure their own AML programmes meet US standards. Correspondent banks are now passing due diligence requests down to end clients.
- SEC-registered or SEC-reporting entities: Funds, broker-dealers, and issuers subject to SEC oversight face integrated AML and disclosure obligations. The SEC's examination programme specifically tests AML controls.
- High-value transaction counterparties: Entities involved in real estate transactions, trade finance, or credit facility arrangements above defined thresholds attract enhanced due diligence from US counterparties, regardless of whether the foreign entity itself is registered in the US.
Smaller companies often assume that the AML regime targets only financial institutions. This is a common and costly mistake. The beneficial owner reporting rules apply to a wide range of operating companies. Exemptions exist – for example, for large operating companies meeting specific employee and revenue thresholds – but those exemptions must be affirmatively assessed and documented. Assuming an exemption applies without legal verification has led to enforcement exposure in multiple cases reviewed by federal regulators.
To discuss how these obligations apply to your US operations or corporate structure, contact us at info@ferrazwhitmore.com.
What to do now: immediate actions and compliance timeline
International companies should treat the following five steps as urgent priorities. Each carries a distinct risk profile if left unaddressed.
1. Map your US entity footprint immediately. Identify every entity formed or registered in a US state. Determine which are subject to BOI reporting and which qualify for an exemption. For each reportable entity, compile the required data for all beneficial owners: full legal name, date of birth, residential address, and a government-issued identification document. Engaging a lawyer in the United States with direct FinCEN filing experience is advisable at this stage. Errors in BOI filings carry civil and criminal penalties under federal law.
2. Audit your KYC files for all US bank accounts. Contact each US banking relationship and confirm whether a KYC refresh request is outstanding. Assemble the documentation your banks require – corporate formation documents, ownership charts, and certified identification for beneficial owners. Delays in responding to bank requests are treated as non-cooperation. Account suspension can follow within days of a missed deadline.
3. Review correspondent banking arrangements. If your company clears payments in US dollars, identify the correspondent bank chain. Request your intermediary bank's current AML questionnaire. Ensure your own AML policy – including transaction monitoring thresholds and suspicious activity reporting – meets the standards your US correspondent imposes. A law firm in the United States with banking regulatory experience can benchmark your programme against current federal guidance.
4. Update internal AML and KYC policies. The federal AML legislative regime expects financial institutions and many covered non-financial businesses to maintain written AML programmes. These must include designated compliance officers, employee training records, independent audit functions, and defined procedures for filing suspicious activity reports. Review your existing programme against the updated regulatory standards and document any gaps with a remediation plan.
5. Assess credit facility and trade finance exposure. If your company holds or is seeking a credit facility from a US lender, expect the lender to impose AML representations and warranties in the facility agreement. Lenders are now including AML compliance certifications as conditions precedent to drawdown. Non-compliance with these contractual obligations can constitute an event of default. Review existing facility documentation and engage counsel before the next drawdown or renewal date.
Disputes arising from AML-related account closures or correspondent terminations increasingly proceed through AAA arbitration or JAMS panels, particularly where the underlying agreement contains a US arbitration clause. Where no arbitration clause exists, litigation before a US District Court is the likely venue. Acting proactively – rather than after an account has been frozen – is materially less costly in both legal fees and business disruption.
For companies navigating related securities compliance matters, our analysis of capital markets obligations in the United States addresses the intersection of AML and disclosure requirements for SEC-registered entities. A broader overview of our banking and financial regulatory practice is available at banking and finance law in the United States. For companies with parallel AML exposure in Latin American jurisdictions, our alert on AML updates in Brazil covers comparable recent developments.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our banking and finance practice covers AML compliance, KYC programme design, beneficial owner reporting, and correspondent banking disputes in the United States and across 15 practice areas spanning civil law and common law systems. Our attorneys have advised on AML-related matters before US federal regulators, in AAA arbitration and JAMS proceedings, and in cross-border enforcement actions involving both US District Court litigation and international arbitral bodies. The firm's dual tradition – Portuguese civil law combined with English common law expertise – provides international companies with a single advisory team that understands both the US regulatory regime and the home-jurisdiction obligations of foreign-owned US entities. As a law firm supporting international businesses in the United States, we work with founders, institutional investors, and in-house legal teams who need results-oriented counsel across multiple legal systems. To receive an expert assessment of your AML compliance position in the United States, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.
Published: March 17, 2026
Author: Edward Whitmore – Senior Partner, Dispute Resolution
Edward Whitmore is a Senior Partner at Ferraz & Whitmore specialising in international commercial arbitration, enforcement of foreign judgments, and complex litigation. With a background spanning English common law and civil law systems, he represents multinational clients in high-value cross-border disputes.