Treasury Secretary Scott Bessent traveled to St. Cloud, Minnesota, with the FBI Director, the CMS Administrator, the FTC Chairman and an Assistant Attorney General to announce measures that, according to Treasury, respond to fraud in the state. Among the initiatives Treasury announced there, FinCEN issued an alert asking financial institutions to watch for suspicious cross-border payments through US money services businesses. The alert is FIN-2026-Alert009, dated October 30, 2026. FinCEN also issued a Notice on the Use of Charities and Non-Profit Organizations for Illicit Activity. For a US money transmitter with a foreign agent network, the alert is the document that matters.
What the alert says
Between 2021 and 2025, U.S. financial institutions reported more than $8 billion in potentially suspicious wire payments sent through U.S.-based MSBs at the direction of foreign agents. FinCEN says it has identified instances where funds moved through these arrangements ultimately benefited entities with identified connections to terrorist financing.
The mechanics are familiar to anyone who runs a remittance business. The alert defines an agent as a separate business entity from the principal that the principal authorizes to sell its transfer services. An agreement with a foreign agent may let the agent instruct the principal MSB to pay third-party entities on the agent’s behalf, not only the agent itself. On receiving those instructions, the principal MSB will often use its own bank account to complete the transaction, directing its bank to wire funds to a third-party recipient’s overseas bank account.
That is the point of the alert. FinCEN’s analysis of BSA reporting found that foreign agents appeared to be using the principal MSBs’ bank accounts as their own. The bank sees its MSB customer sending a wire. It does not see the foreign agent, the third party or the reason for the payment. In our reading, this is why FinCEN addressed the alert to banks as much as to MSBs.
Who owns the exposure
The alert restates a rule that principals sometimes forget when they negotiate agent agreements. Although principals and agents may contractually allocate responsibility for policies, procedures and internal controls, both the principal and its agents remain responsible for implementing the AML/CFT program requirements. The alert cites 31 C.F.R. § 1022.210(d)(1)(iii) for that point. Neither the agent nor the principal can avoid liability for failing to maintain an effective AML/CFT program by pointing to a contract assigning that responsibility to the other party. The alert points to FinCEN’s 2016 guidance, FIN-2016-G001, on agent monitoring obligations for MSB principals.
The contract allocates the work; it does not move the liability.
FinCEN has previously said that the principal MSB must have procedures in place to identify agents conducting activities that lack or appear to lack commercial purpose, and should implement procedures for handling non-compliant agents, including contract terminations. A foreign agent that sends payment instructions with no invoices behind them is exactly the agent those procedures were written for. If your program has the procedure on paper but no record of ever applying it, an examiner or a bank is likely to treat it as absent.
The red flags, for MSBs and for their banks
The red flags for principal MSBs include a foreign agent regularly directing payments to third-party entities in jurisdictions such as China, the UAE, Egypt, and East African countries, including Kenya, Uganda and Djibouti. Others include non-descriptive, repetitive or unsupported reasons for a payment, such as “settlement” or “services”, reluctance to provide invoices, contracts or orders, payments to a general trading company or a newly created company with no apparent relationship to the agent, and round-dollar amounts.
The alert also lists red flags for banks providing services to MSBs, starting with a customer MSB that sends payments to a foreign entity that does not have the profile of a recipient of bulk MSB funds. Another is a customer MSB that is reluctant or fails to provide documentation when its bank asks about a transfer.
The bank list deserves as much attention as the MSB list. Banks serving MSBs will likely load these indicators into their monitoring and begin asking their MSB customers for invoices, agent due diligence files and an explanation of each third-party payment. An MSB that cannot answer quickly and consistently may face a restricted account or an exit letter, and for a remittance business the bank account is the business. We expect the questions to arrive before the next examination does.
What the alert asks you to file
FinCEN requests that filers include the key term FIN2026FOREIGNAGENT in SAR field 2 and in the narrative. For a Form 8300 involving a suspicious transaction relevant to the alert, FinCEN requests that the filer select Box 1b and include the same key term in the Comments section. FinCEN strongly encourages financial institutions to participate in the voluntary section 314(b) information-sharing program. For a principal whose bank is also looking at the same wires, 314(b) is the mechanism that lets the two of you compare notes without breaching SAR confidentiality.
What did not change
Nothing in the alert is a new rule. Interpretive Release 2004-1 already provided, in FinCEN’s words, that “the AML/CFT program of an MSB must include risk-based policies, procedures, and controls designed to identify and minimize risks associated with foreign agents and counterparties.” A financial institution is required to file a SAR if it knows, suspects or has reason to suspect that a transaction lacks a business or apparent lawful purpose, among other triggers. And the alert repeats Treasury’s position that “financial institutions should assess all customers on a case-by-case basis and that no individual type of customer, including MSBs, should be considered uniformly high risk.”
That last point cuts both ways. It is the sentence to put in front of a bank that proposes to exit every MSB customer. It is also a reminder that case-by-case assessment only works if the MSB can show the case: who the agent is, who the third party is, and why the money is moving. The alert does not loosen anything and it does not tighten the rule. It describes how the rule is being broken and tells banks what that looks like from their side.
What firms should do
First, inventory every agent clearing agreement and mark the ones that permit the agent to direct payments to third parties. Those clauses define your exposure, and most BSA officers we would expect to find have never read them.
Second, for each foreign agent with a third-party payment clause, build a file: licensing or regulatory status, business operations, AML/CFT controls, and the due diligence the agent performed on each third party it pays. The alert lists an agent’s unwillingness to provide this information as a red flag, so treat the file as a condition of the relationship, not a courtesy.
Third, tie transaction monitoring to the agreement. A payment to an entity not named in the agent’s clearing agreement, a daily or round-dollar settlement pattern, or a recipient in a jurisdiction that does not match the population the agent serves should each generate an alert and a documented disposition.
Fourth, write the bank’s questions before the bank asks them. Prepare, for each foreign agent, a one-page explanation of the settlement arrangement, the expected volume, the counterparties and the jurisdictions, with the supporting invoices attached. Share it with your bank proactively and consider registering for 314(b) if you have not.
Fifth, update SAR procedures so that any filing connected to a foreign-agent-directed payment carries the FIN2026FOREIGNAGENT key term, and train the team on the Form 8300 instruction.
Sixth, exercise the termination procedure. If an agent has not provided documentation after a reasonable request, the alert makes clear FinCEN expects you to have a process for ending the relationship. Use it at least once, and keep the record.
Taft helps money transmitters do this work: reviewing agent agreements, building the agent files, tuning monitoring rules and preparing the bank package, through a fractional compliance team that sits alongside the BSA officer rather than replacing them. For the underlying program requirements, see our guide to AML compliance for fintechs and funds. Where an agent relationship raises questions of contractual liability, those questions need a lawyer; Taft does not provide legal advice.
Sources
- ICYMI: Secretary Bessent, Trump Administration Officials Announce New Fraud Prevention Measures in Minnesota, U.S. Department of the Treasury
- 1. See 31 U.S.C. § 5312(a)(2); 31 C.F.R. § 1010.100(t)., FinCEN
- 1. See 31 U.S.C. § 5312(a)(2); 31 C.F.R. § 1010.100(t)., FinCEN
- Secretary Bessent, Senior U.S. Officials Announce New Fraud Prevention Measures in Minnesota, U.S. Department of the Treasury
Taft does not provide legal advice. Content is for informational purposes only and subject to regulatory guidance.