A Look Back: Top Stories of 2023

neub9
By neub9
2 Min Read

An AI hit the corporate world in 2023 with a barrage of new regulations and compliance requirements. From an anti-ESG backlash to new rules from the SEC, the year was filled with challenges for compliance practitioners. The Corporate Transparency Act, which came into law as part of a massive defense authorization bill in 2020, was a significant reform to U.S. anti-money laundering laws and required companies to report their beneficial ownership information to the federal government and FinCEN. However, a survey found that awareness of these new obligations was extremely low, despite the guidance offered by FinCEN.

Fraudsters have already begun using the Corporate Transparency Act reporting as a source for their schemes. Companies have received fraudulent communications soliciting their beneficial ownership data, despite the fact that the agency does not send unsolicited requests for information. Furthermore, New York-based organizations face even more reporting complications due to a bill that would create a publicly accessible database of beneficial owners of LLCs operating in the state.

While the U.S. has yet to adopt broad regulation for AI, the EU took a major step towards comprehensive AI regulation, agreeing to landmark rules that would restrict some uses of facial recognition software. This means that despite regulation being in its infancy around the world and use cases continuing to evolve, it is likely to have a significant impact on the day-to-day life of compliance and risk practitioners.

Overall, the use and regulation of AI continues to evolve, with the U.S. and the EU taking different approaches to legislation. Despite the advancing nature of AI, particularly generative AI, companies’ actions are ahead of regulation. Boards need to ensure the strategic application of AI technology and maintain a focus on value and risk management. AI holds the potential to disrupt business in unpredictable ways, creating the need for new roles, such as AI auditor, to measure the company’s use of AI against existing frameworks.

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