If the reports banks must submit on "suspicious" activities are to effectively combat crime globally, then outmoded anti-money-laundering rules prohibiting U.S. banks from sharing such reports with foreign affiliates are in need of a simple, commonsense fix.

Under the Bank Secrecy Act, banks must file "suspicious activity reports" to help detect and fight terrorist and other illicit activities. Historically, SARs were intended as tools used solely by law enforcement in their efforts to fight crime. However, in the post-9/11 world, banks are expected by their regulators to use SARs to identify and manage illicit financing risk. Consequently, banks have become more than just watchdogs that file SARs. They have become gatekeepers to the global financial system with the power to cut off the financial supply lines of illicit actors.

But regulations by the Financial Crimes Enforcement Network that generally prohibit banks from disclosing SARs, or even the existence of SARs, to anyone other than law enforcement or the banks' own regulators, make that job harder. This prohibition extends even within a bank's own global corporate structure, blocking institutions from alerting affiliated branches or subsidiaries in other countries about threats.

It is for good reason that SARs are kept under lock and key with respect to third parties. The disclosure of sensitive SAR information could compromise law enforcement investigations, chill the willingness of banks to provide detailed information to law enforcement, provide insight into a bank's process for uncovering criminal conduct, or put banks at risk of retaliation.

However, imposing secrecy requirements within a bank's global corporate structure is counterproductive to the larger aims of AML and anti-terrorist-financing efforts. The inability to share SARs with foreign branches and affiliates causes banks to contort their information systems as they must "curtain" SARs and information that would reveal the existence of a report to their foreign branches and affiliates.

The prohibition creates AML and ATF blind spots for foreign branches and affiliates, which, like their U.S. counterparts, serve a gatekeeper role in allowing or disallowing access to the financial system. All the while, banks are expected by the regulatory community to have a global view of AML and ATF risks.

Fincen has allowed sharing in limited circumstances. Under an exception to the prohibition, U.S. banks and U.S. branches of foreign banks can share SARs with the company's foreign-based parent. While any sharing arrangement carries the risk of wider disclosure, Fincen directed U.S. entities to address this potential through confidentiality agreements with the parent.

While such agreements do not guarantee SARs will never be disclosed to third parties in foreign jurisdictions, on balance, as Fincen itself determined previously, the benefits of improved enterprise-wide risk management in an environment of persistent illicit finance threats outweigh the potential risks of disclosure.

But that limited exception needs to be broadened.

In the Treasury Department's recently released 2015 National Money Laundering Risk Assessment, Adam Szubin, acting under secretary for terrorism and financial intelligence, wrote that the fight against money laundering and terrorist financing "requires the coordinated and dedicated efforts of policy makers, law enforcement, supervisors, and the private sector, particularly financial institutions."

To further its mission of protecting the financial system from illicit activity, Fincen should allow U.S. banks and U.S. branches of foreign banks to share SARs with their foreign branches and affiliates. Such sharing in the context of risk mitigation is entirely consistent with the purposes of the Bank Secrecy Act and would provide vital support to banks in their global gatekeeper role.

Banks are working hard to do their part, but they need to be given the ability to use all the tools in the toolbox.

Alaina Gimbert is senior vice president and associate general counsel at the Clearing House.

Corrected October 30, 2015 at 11:49AM: This is adapted from a longer piece that ran in the Clearing House's quarterly journal Banking Perspective.