South Carolina Anti-Money Laundering Act becomes effective May 25, 2018. Applications must be filed by June 29, 2018.

  • Implementing regulations become effective May 25, 2018.
  • Existing businesses must file applications by June 29, 2018, or cease operating in South Carolina.
  • Companies licensed in other states may seek approval to operate without submitting a license application.

In 2016, South Carolina enacted the South Carolina Anti-Money Laundering Act (the “Act”). The Act was to become effective upon the later of June 9, 2017, or the adoption of final implementing regulations. Those regulations were adopted, and they will become effective when published on May 25, 2018. Consequently, the Act will finally become effective on May 25, 2018.

South Carolina Attorney General Alan Wilson announced on May 14, 2018, the formation within his office of the Money Services Division, which will be charged with issuing licenses and generally administering the Act. More importantly, the Money Services Division also issued a memo outlining how it will handle the transition to licensure for businesses that are already operating in South Carolina. The memo included the following key points:

  • License applications must be filed through the Nationwide Multistate Licensing System and Registry.
  • Any business that files an application before close of business on June 29, 2018, may continue operations while the application is reviewed, without risk of penalties.
  • Any business that cannot file an application by June 29, 2018, must cease operations in South Carolina on May 25, 2018, or face potential civil and criminal penalties.

It is worth noting that, under the Act and the new regulations, if a business is already licensed in another state, it can seek approval to operate in South Carolina without submitting a full license application. Specifically, Section 35-11-210 of the Act and Section 13-2202 of the new regulations provide that a person licensed in another state may submit substantially less material and be authorized to conduct business in South Carolina, provided that the person is licensed in at least one state that either has adopted the Uniform Money Services Act or has money transmission laws that are substantially similar to those of South Carolina.