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The Financial Crimes Enforcement Network is issuing this advisory to U.S. financial institutions so that they may guard against threats of illicit Iranian activity related to money laundering, terrorist financing and weapons of mass destruction proliferation financing. The Financial Action Task Force (FATF) has recently determined that Iran’s lack of a comprehensive anti-money laundering and combating the financing of terrorism (AML/CFT) regime represents a significant vulnerability within the international financial system.
The Financial Crimes Enforcement Network ("FinCEN") has noticed common errors in the filing of Suspicious Activity Reports ("SARs"). Although these errors were noted primarily through studying Suspicious Activity Reports by Money Services Business (Form 109) filings, we believe that publishing an explanation of ten of the most common errors and ways much of them readily can be mitigated could be informative to financial institutions in other industries in their efforts
The MSB Registration List, which is updated and posted on a monthly basis, contains entities that have registered as Money Services Businesses (MSBs) pursuant to the Financial Crimes Enforcement Network’s (FinCEN’s) Bank Secrecy Act regulations at 31 CFR 103.41. In accordance with FinCEN Guidance (FIN-2006-G006) on Registration and De-Registration of Money Services Businesses
Office of Thrift Supervision (OTS) Director John Reich cited close cooperation among federal bank regulators as a key ingredient in the successes in safeguarding the nation’s financial system from money laundering and terrorist financing.
During a speech at a conference sponsored by the Federal Financial Institutions Examination Council (FFIEC), Reich highlighted several examples of the collaboration between the OTS and the other federal bank agencies in ensuring compliance with the Bank Secrecy Act and anti-money laundering (BSA/AML) rules.
Summary: The Federal Financial Institutions Examination Council (FFIEC) released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual on August 24, 2007. Highlights:
Summary: The federal financial regulatory agencies have issued the attached statement setting forth the policy for enforcing specific anti-money laundering (AML) requirements of the Bank Secrecy Act (BSA). Highlights:
This interagency statement jointly issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the National Credit Union Administration, sets forth the Agencies' policy on the circumstance in which an Agency
p>James H. Freis, Jr., Director of the Financial Crimes Enforcement Network (FinCEN), today issued the following statement about the federal financial regulatory agencies’ Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements. “Today’s statement by the agencies is another positive step with respect to clarity and consistency in the implementation of the Bank Secrecy Act. It complements our joint efforts to make the BSA regulatory framework even more efficient for the regulated industries and still more effective for analytical and law enforcement purposes. We share a commitment to initiatives of this kind, as outlined by Secretary Paulson last month.”
The federal financial regulatory agencies on Thursday issued a statement setting forth the agencies’ policy for enforcing specific anti-money laundering requirements of the Bank Secrecy Act (BSA). The purpose of the Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements is to provide greater consistency among the agencies in enforcement decisions in BSA matters and to offer insight into the considerations that form the basis of those decisions. The applicable statutes provide that if a regulated institution fails to establish and maintain a BSA compliance program or fails to correct a previously identified problem with its BSA compliance program, the appropriate agency shall issue a formal cease and desist order. The statement, which reflects the agencies’ current practices on enforcement with respect to BSA compliance, describes the circumstances under which the agencies will issue a cease and desist order in compliance with these statutory provisions. The statement also makes clear that the agencies may take formal or informal enforcement actions to address other concerns related to BSA or anti-money laundering, depending on the facts. The statement complements the Bank Secrecy Act/Anti-Money Laundering Examination Manual, which was similarly designed to foster interagency consistency and transparency regarding the BSA examination process.
The Financial Crimes Enforcement Network (FinCEN) has created a new page on its public website entitled Regulatory Efficiency and Effectiveness Initiative with the purpose of providing information to the public, on a regular basis, about its work to administer and implement a Bank Secrecy Act regulatory environment that is both efficient for the regulated industries and effective for law enforcement, analytical, and regulatory purposes.
The Financial Crimes Enforcement Network (FinCEN) has issued guidance reminding financial institutions to provide all documentation supporting the filing of a Suspicious Activity Report (SAR) upon request by FinCEN, appropriate law enforcement or a supervisory agency.
The U.S. Departments of Treasury, Justice, and Homeland Security have jointly released the 2007 National Money Laundering Strategy, which responds directly to the first U.S. Money Laundering Threat Assessment, released in December 2005.
OCC: Notification of Delay in the Implementation of Revised Suspicious Activity Report by Deposit Institutions (SAR-DI) Date: May 17, 2007 TO: Chief Executive Officers and Compliance Officers of All National Banks, Federal Branches and Agencies, Department and Division Heads, and All Examining Personnel The attached documents, issued on April 27, 2007, by the Financial Crimes Enforcement Network (FinCEN), announce the delayed implementation of certain revised Suspicious Activity Report (SAR) forms that were scheduled to become effective on June 30, 2007. FinCEN is withdrawing the effective date for the revised SAR forms for depository institutions, casinos and card clubs, insurance companies, and the securities and futures ind
United States Department of the Treasury Financial Crimes Enforcement Network FinCEN Advisory
Subject:Transactions Involving Nigeria
This Advisory is being issued to inform banks and other financial institutions operating in the United States that Financial Crimes Enforcement Network (FinCEN) Advisory Issue 32, regarding the Federal Republic of Nigeria, is hereby withdrawn.
Since the issuance of Advisory 32, and as reflected in its June 23, 2006 decision, the Financial Action Task Force on Money Laundering has removed Nigeria from its list of countries that are non-cooperative in the fight against money laundering, recognizing the progress Nigeria has made in implementing anti-money laundering reforms. Nigeria has enacted significant reforms to its counter-money laundering system, addressing the deficiencies listed in Advisory 32, and has taken concrete steps to bring these reforms into effect. Because of the enactment of new laws and the beginning of effective implementation, the enhanced scrutiny called for in Advisory 32 with respect to transactions invol
The U.S. Departments of Treasury, Justice, and Homeland Security joined together in issuing the 2007 National Money Laundering Strategy, a report detailing continued efforts to dismantle money laundering and terrorist financing networks and bring these criminals to justice. "The 2007 National Money Laundering Strategy is a direct result of close cooperation by the Departments of Justice, Treasury and Homeland Security, along with our foreign counterparts, and signifies our collective commitment to fight money laundering," said Assistant Attorney General Alice S. Fisher of the Justice Department's Criminal Division. "Implementation of this strategy will greatly assist in efforts to seize and forfeit millions in illegal proceeds that flow through the international financial system."
Summary: The Wolfsberg Group and The Clearing House Association L.L.C. have issued the attached joint statement endorsing measures to enhance the transparency of international wire transfers. Financial Institution Letter FIL-37-2007 Highlights: To promote the effectiveness of global anti-money laundering and anti-terrorist financing programs, The Wolfsberg Group and The Clearing House Association L.L.C. have announced a statement for change in international wire transfer practices.
The Financial Crimes Enforcement Network (FinCEN) has issued the seventh edition (November 2006) of The SAR Activity Review By the Numbers. Highlights: - FinCEN has issued the seventh edition of The SAR Activity Review By the Numbers. The report is a compilation of numerical data gathered from Suspicious Activity Reports (SARs) filed by depository institutions, certain money services businesses, casinos and card clubs, and by certain segments of the securities and futures industries.
The Office of the Comptroller of the Currency issued guidance today warning of the risks posed by scams involving fraudulent bank cashier's checks and describing steps national banks should take to protect themselves and their customers. A cashier's check, which is issued by a bank and sold to a consumer or other purchaser, represents a direct obligation of the bank. The guidance was issued in response to a growing incidence of scams involving cashier's checks. In most of these cases, individuals receive a cashier's check and are asked to deposit the check into their account, wait until funds become available and then wire some part of the funds from their account to a third party, often in a foreign country.
This document is a tool for financial institutions’ use in assessing and mitigating risks associated with implementation of Remote Deposit Image Capture (RDIC). This paper provides successful strategies that financial institutions (FIs) have employed for managing the risks with RDIC. It does not imply that all of these strategies are necessary for a successful program. This paper also does not address the specific technologies used to implement the RDIC process and/or mitigate the risk, as technology used will often be determined by other factors such as the compatibility of the clients’ and FIs’ equipment. This paper identifies potential risks as they pertain to product distribution, equipment and software, information system security, images and image quality, and processes.
The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), and the Financial Crimes Enforcement Network (FinCEN) are hosting two nationwide conference calls regarding the release of the revised 2006 FFIEC BSA/AML Examination Manual for the banking industry. The Office of Foreign Assets Control will also participate in these calls. Each one-hour teleconference will provide an overview of significant revisions and updates to the manual and conclude with a question and answer session. These calls are open to all banking organizations.
The following Question and Answer (Q & A) guidance is the first group of responses to questions submitted during the July 31, 2006, OTS BSA/AML "Getting it Right" conference call. If you do not see your specific question covered, please check back at a later date. We expect to have the majority of Q & A's posted by August 31, 2006. The answers provided may encompass suggested best practice guidance and are not intended to be comprehensive, apply to all factual situations, or to replace or supersede the BSA regulations. Whenever possible, we consolidated common questions and provided hyperlinks to various referenced guidance materials or administrative rulings.
This Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act (BSA) /Anti-Money Laundering (AML) Examination Manual provides guidance to examiners for carrying out BSA/AML and Office of Foreign Assets Control (OFAC) examinations. An effective BSA/AML compliance program requires sound risk management; therefore, the manual also provides guidance on identifying and controlling risks associated with money laundering and terrorist financing. The manual contains an overview of BSA/AML compliance program requirements, BSA/AML risks and risk management expectations, industry sound practices, and examination procedures. The development of this manual was a collaborative effort of the federal banking agencies1 and the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, to ensure consistency in the application of the BSA/AML requirements. In addition, OFAC assisted in the development of the sections of the manual that relate to OFAC reviews. Refer to Appendices A ("BSA Laws and Regulations"), B ("BSA/AML Directives"), and C ("BSA/AML References") for guidance.
This Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act (BSA) /Anti-Money Laundering (AML) Examination Manual provides guidance to examiners for carrying out BSA/AML and Office of Foreign Assets Control (OFAC) examinations. An effective BSA/AML compliance program requires sound risk management; therefore, the manual also provides guidance on identifying and controlling risks associated with money laundering and terrorist financing. The manual contains an overview of BSA/AML compliance program requirements, BSA/AML risks and risk management expectations, industry sound practices, and examination procedures. The development of this manual was a collaborative effort of the federal banking agencies1 and the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, to ensure consistency in the application of the BSA/AML requirements. In addition, OFAC assisted in the development of the sections of the manual that relate to OFAC reviews. Refer to Appendices A ("BSA Laws and Regulations"), B ("BSA/AML Directives"), and C ("BSA/AML References") for guidance.
Objective: Assess the organization's enterprise-wide program for BSA/AML compliance through the holding company or lead financial institution. Similar to the approach to consolidated credit, market, and operational risk, effective control of BSA/AML risk may call for coordinated risk management. An enterprise-wide BSA/AML compliance program coordinates the specific regulatory requirements throughout an organization inside a larger risk management framework. Such frameworks seek a consolidated understanding of the organization's risk exposure to money laundering and terrorist financing across all activities, business lines, or legal entities. For example, the holding company or lead financial institution may have a centralized function to evaluate BSA/AML risk; this may include the ability to understand world-wide exposure to a given customer, particularly those considered high¬risk or suspicious, consistent with applicable laws. Many organizations, typically those that are larger or more complex and that may include international operations, implement an enterprise-wide BSA/AML compliance program that manages risks in an integrated fashion across affiliates, business lines, and risk types (e.g., reputation, compliance, or transaction). Some larger or more complex organizations may decide to manage their risks by developing enterprise-wide approaches to their BSA/AML compliance program. Such programs manage risk at both operational and strategic levels.
The following is a list of the appendices from the Bank Secrecy Act/Anti-Money Laundering Examination Manual. > Read the entire appendicies here - PDF Appendix A: BSA Laws and Regulations (2006)
The Federal Financial Institutions Examination Council (FFIEC) today released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual (manual). The revised manual reflects the ongoing commitment of the federal banking agencies and the Financial Crimes Enforcement Network (FinCEN) to provide current and consistent guidance on risk-based policies, procedures, and processes for banking organizations to comply with the BSA and safeguard operations from money laundering and terrorist financing. The manual has been updated to further clarify supervisory expectations and incorporate regulatory changes since the manual's 2005 release. The revisions also draw upon feedback from the banking industry and examination staff.
The Federal Financial Institutions Examination Council today issued revised guidance for examiners and financial institutions to use in identifying information security risks and evaluating the adequacy of controls and applicable risk management practices of financial institutions. The Information Security Booklet is one of twelve that, in total, comprise the FFIEC IT Examination Handbook. In addition to the revised Information Security Booklet, the agencies also released an Executive Summary that contains high level synopses of each of the twelve booklets and describes the handbook development and maintenance processes. The security of financial institutions' systems and information is essential to maintaining the privacy of customer information and safe and sound operations. The Information Security Booklet describes how an institution should protect and secure the systems and facilities that process and maintain information. The booklet calls for financial institutions and technology service providers (TSPs) to maintain effective security programs tailored to the complexity of their operations.
Conference Call A live, 90 minute, telephone briefing that will provide thrifts with valuable information regarding BSA/AML compliance, including best practices, common violations, and strategies for building an effective BSA/AML compliance program. Hear from top experts at OTS and have an opportunity to ask questions and receive answers. Compliance Officers, Risk Managers, Auditors, Attorneys, and Senior Managers Should Make Plans to Participate Monday, July 31
The tenth (May 2006) issue of The SAR Activity Review – Trends, Tips, & Issues, published by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), is now available. Highlights: - On May 31, 2006, FinCEN released the tenth edition of The SAR Activity Review – Trends, Tips & Issues. This issue focuses on the money services business (MSB) industry. - Article topics include the use of Suspicious Activity Reports (SARs) to detect unregistered MSBs and guidance on registration and deregistration of a business as an MSB. - This issue also identifies current trends in mortgage loan fraud, as well as filing activity and detection of unlicensed/unregistered MSBs.
Summary: The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued the attached advisory to U.S. financial institutions to guard against potential money laundering threats involving the smuggling of bulk U.S. currency into Mexico and the possible abuse of their financial services by certain Mexican financial institutions, including Mexican "casas de cambio." Highlights: - On April 28, 2006, FinCEN issued the attached advisory to U.S. financial institutions about a potential money laundering threat concerning the smuggling of U.S. currency into Mexico and the potential misuse of relationships with U.S. financial institutions by certain Mexican financial institutions, including Mexican casas de cambio.
Summary: The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) is seeking public comment on the attached Advance Notice of Proposed Rulemaking (ANPR) regarding the impact of Bank Secrecy Act (BSA) regulations on the ability of money services businesses (MSBs) to open and maintain accounts and obtain other banking services at banks and other depository institutions. Highlights: - FinCEN has issued the attached ANPR seeking comments from the public, MSBs, and the banking industry regarding the BSA's impact on MSBs ' ability to obtain appropriate access to banking services. - MSBs have experienced obstacles in opening and maintaining deposit accounts with banks.
FinCEN is soliciting updated facts about this issue as well as feedback on whether additional guidance or regulatory action under the BSA might address these concerns.
Summary: The Financial Crimes Enforcement Network (FinCEN) has issued the attached final rule extending, in part, the applicability dates for implementing the international correspondent banking provisions and the private banking provisions of Section 312 of the USA PATRIOT Act. Highlights: On January 4, 2006, FinCEN issued a final regulation implementing Section 312 of the USA PATRIOT Act. The final rule took effect on February 3, 2006, and superseded the interim final rule issued on July 23, 2002. The final rule requires U.S. financial institutions to apply due diligence to correspondent accounts maintained for certain foreign financial institutions and private banking accounts maintained for foreign individuals. Regarding correspondent banking, generally, the rule establishes the scope of U.S. financial institutions to which the rule applies and outlines general due diligence requirements to mitigate exposure to potential money-laundering activities.
Chairman Shelby, Ranking Member Sarbanes and other distinguished members of the Committee, thank you for the opportunity to speak to you today about our progress in combating terrorist financing and money laundering. In the last four months, we have seen assessments of our progress in both of these arenas - the 9/11 Commission Public Discourse Project's evaluation of our terrorist financing efforts and the U.S. Government's first-ever Money Laundering Threat Assessment. These assessments and this hearing provide an opportunity to take stock of how we are doing with respect to two of the leading concerns of my office. I welcome this committee's ongoing focus on these threats, and your continued support for our efforts to help stop illicit flows of money. Terrorist Financing The 9/11 Commission's Public Discourse Project awarded its highest grade, an A-, to the U.S. Government's efforts to combat terrorist financing. This praise truly belongs to the dozens of intelligence analysts, sanctions officers, regional specialists, and regulatory experts in the Treasury's Office of Terrorism and Financial Intelligence (TFI) who focus on terrorist financing, along with their talented colleagues in other agencies - law enforcement agents who investigate terrorism cases, Justice Department prosecutors who bring terrorist financiers to justice, foreign service officers in embassies around the world who seek cooperation from other governments and many others from the intelligence community. You will not find a more talented and dedicated group of people, with no trace of ego and a total focus on the mission.
Summary: We are issuing this advance notice of proposed rulemaking ("Advance Notice") as part of our ongoing effort to address, in the context of the Bank Secrecy Act, the issue of access to banking services by money services businesses. Both the banking industry and the money services business industry have expressed concerns with regard to the impact of Bank Secrecy Act regulations on the ability of money services businesses to open and maintain accounts and obtain other banking services at banks and other depository institutions. Due to the concerns about the effect of regulatory requirements on the provision of banking services to money services businesses, we, through the Non-bank Financial Institutions and the Examinations subcommittees of the Bank Secrecy Act Advisory Group, held a fact-finding meeting on March 8, 2005, to hear directly from banks, other depository institutions, and money services businesses concerning the challenges that they face on this issue.
The Department of the Treasury has designated Commercial Bank of Syria, including its subsidiary, Syrian Lebanese Commercial Bank, as a financial institution of primary money laundering concern and has issued the attached final rule restricting domestic financial institutions' banking relationships with this entity. Highlights: - On March 15, 2006, the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) issued a final rule announcing the designation of Commercial Bank of Syria, including its subsidiary, Syrian Lebanese Commercial Bank, to be a financial institution of "primary money laundering concern" under Section 311 of the USA PATRIOT Act. For purposes of this document, references to Commercial Bank of Syria include Syrian Lebanese Commercial Bank, and any other branch, office or subsidiary of Commercial Bank of Syria.
The Federal Reserve Board on Wednesday announced its approval of a final rule to amend Regulation K to require Edge and Agreement corporations and U.S. branches, agencies, and other offices of foreign banks supervised by the Board to establish and maintain procedures reasonably designed to ensure and monitor compliance with the Bank Secrecy Act and related regulations. The Board will publish its final rule in the Federal Register shortly, and the rule will become effective 30 days after publication. The Bank Secrecy Act generally requires a financial institution doing business in the United States to keep records and make reports that have a high degree of usefulness in criminal, tax, or regulatory proceedings. Domestic financial institutions, such as state member banks subject to the Board's Regulation H, already have been required to establish and maintain programs to ensure and monitor compliance with the Bank Secrecy Act. The Board's final rule amends Regulation K to require Edge and Agreement corporations and U.S. branches, agencies, and other offices of foreign banks to implement and maintain similar compliance programs.
The Financial Crimes Enforcement Network (FinCEN) published the attached final rule and proposed rule in the Federal Register on January 4, 2006. The final rule implements the international correspondent banking provisions and the private banking provisions of section 312 of the USA PATRIOT Act. Simultaneously, FinCEN announced a related notice of proposed rulemaking involving one key provision of section 312 that requires enhanced due diligence for correspondent accounts maintained for certain foreign banks. Section 312 of the USA PATRIOT Act requires U.S. financial institutions to perform due diligence and, in some cases, enhanced due diligence, with regard to correspondent accounts established or maintained for foreign financial institutions and private banking accounts established or maintained for non-U.S. persons. The final rule implements the general due diligence requirements pertaining to foreign financial institutions as well as the due diligence and enhanced scrutiny requirements pertaining to private banking accounts. Specifically included in the requirements is the duty to conduct enhanced scrutiny of any private banking account that is maintained for senior foreign political figures, their immediate family members, or persons widely and publicly known to be close associates of such individuals.
On January 12, 2006, the Office of Foreign Assets Control (OFAC) published in the Federal Register, “Economic Sanctions Enforcement Procedures for Banking Institutions,” along with a request for comments. OFAC will follow the published procedures when deciding whether to impose enforcement actions against banking institutions for noncompliance with its regulations. In conjunction with issuing this interim final rule, OFAC has withdrawn the January 29, 2003, proposed rule to the extent it applied to banking institutions. The new enforcement procedures will evaluate a banking institution’s apparent OFAC-related violation in the context of the institution’s overall OFAC compliance program and specific OFAC compliance record. OFAC will not conduct such a review if no apparent violation exists within a banking institution.
On January 11, 2006, the first U.S. government-wide analysis of money laundering, “U.S. Money Laundering Threat Assessment” (MLTA), published by the Treasury Department, was released. The report is the product of an interagency working group of 16 federal agencies, bureaus, and offices. The purpose of the MLTA is to help policy makers, regulators, and the law-enforcement community better understand the landscape of money laundering in the United States and to support strategic planning efforts to combat that activity.
Welcome to the fifth issue of the The SAR Activity Review - By the Numbers, a compilation of statistitcal data gathered from Suspicious Activity Report forms submitted by depository institutions since April 1996, casinos and card clubs since August 1996, certain money services businesses since January 2002, and certain segments of the securities and futures industries since January 2003. By the Numbers serves as a companion piece to the publication of The SAR Activity Review - Trends, Tips & Issues, which provides inforamtion about the preparation, use, and utility of Suspicious Activity Reports.
By the Numbers is produced twice a year to cover two filing periods: January 1 to June 30 and July 1 to December 31. The statistical data from the filing periods is available for publication on the FinCEN website after the end of each period, usually in the spring and fall. The last issue of By the Numbers was published in May 2005 and may be accessed through the following link:
Summary: Highlights: This report is the product of an interagency working group composed of experts from various U.S. government agencies, bureaus and offices that study and combat money laundering. The Money Laundering Threat Assessment is designed to help policymakers, regulators and the law enforcement community better understand the landscape of money laundering in the United States and to support strategic planning efforts to combat money laundering.
Whatever direction the cyberthreat takes, the United States Government will be confronting an increasingly interconnected world in the years ahead. This is the core message of GT2015. We will have to develop, in response, greater communications and collaboration across the agencies of our own Government, with other governments, and with the corporate world. Interagency cooperation will be essential to understanding the cyberthreat, as well as other transnational threats that will crowd our agenda, and to responding effectively with interdisciplinary strategies. Consequence management of a major attack on a critical US infrastructure would involve virtually all agencies of the Federal Government, State, and local governments, foreign governments, law enforcement, the military, the medical community, and the media. NSTISSC and the Intelligence Community clearly have a lot of work to do if we are to understand this evolving threat and to be prepared to deal with it.
This bulletin amends OCC Bulletin 2004-50, Enforcement Guidance for BSA/AML Program Deficiencies, dated November 10, 2004, by adding a new Appendix A entitled “Process for Taking Administrative Enforcement Actions Against Banks Based on BSA Violations.” The purpose of this new appendix is to ensure that the OCC’s process for taking administrative enforcement actions based on BSA violations is measured, fair, and fully informed. These procedures set forth the general process to be followed in enforcement cases based on BSA violations. They provide only internal OCC guidance. The OCC may deviate from these procedures in certain cases, e.g., cases in which a developing situation in a bank requires immediate action, other unusual or exigent circumstances are present, or intervening developments require a different course of action.
The Financial Crimes Enforcement Network (FinCEN) has announced the final regulation implementing the international correspondent banking provisions and the private banking provisions of Section 312 of the USA PATRIOT Act. Concurrently, FinCEN has released a further notice of proposed rulemaking on one key issue regarding correspondent banking. To view the final and proposed rules, along with a press release and fact sheet from FinCEN, visit FinCEN's Web site at http://www.fincen.gov/section312.pdf.
Highlights: The final regulation takes effect within 90 days from the date the regulation is published in the Federal Register (anticipated by January 4, 2006) for new accounts opened by U.S. financial institutions and 270 days from that date for existing accounts.
The final rule requires certain U.S. financial institutions to apply due diligence to correspondent accounts maintained for certain foreign financial institutions and private banking accounts maintained for foreign individuals.
In 2001, NCUA amended 12 CFR Part 748 to fulfill a requirement in Section 501 of the Gramm-Leach-Bliley Act (Pub. L. No. 106-102) (GLBA), in which Congressdirected both NCUA and the other Federal Financial Institution Examination Council (FFIEC ) agencies, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision (collectively, the “Banking Agencies”) to establish standards for financial institutions relating to administrative, technical, and physical safeguards to: (1) insure the security and confidentiality of customer records and information; (2) protect against any anticipated threats or hazards to the security or integrity of such records; and (3) protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer. Although NCUA worked with the Banking Agencies to develop the standards described above, the Banking Agencies issued their standards as guidelines under the authority of Section 39 of the Federal Deposit Insurance Act.
Since Section 39 of the Federal Deposit Insurance Act does not apply to NCUA, the NCUA Board determined that it could best meet the congressional directive to prescribe standards through an amendment to its existing regulation governing security programs for federally insured credit unions and by providing guidanceto credit unions, substantially identical to the guidelines issued by the Banking Agencies, in an appendix to the regulation. 12 CFR Part 748, Appendix A; 66 FR 8152 (January 30, 2001). The preamble to the final rule discusses the different regulatory framework under which the Banking Agencies issued their guidelines. The final regulation requires each federally insured credit union to establish and maintain a security program implementing the safeguards required by GLBA.
Agencies Release Bank Secrecy Act/Anti-Money Laundering Examination Manual The Federal Financial Institutions Examination Council (FFIEC) today released the Bank Secrecy Act/Anti-Money Laundering Examination Manual (FFIEC BSA/AML Examination Manual). The manual’s release marks an important step forward in the effort to ensure the consistent application of the BSA to all banking organizations including commercial banks, savings associations, and credit unions. The FFIEC BSA/AML Examination Manual was developed by the Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and Office of Thrift Supervision (OTS) (collectively referred to as the federal banking agencies) in collaboration with the Financial Crimes Enforcement Network (FinCEN), the delegated administrator of the BSA. In addition, through the Conference of State Bank Supervisors, the state banking agencies played a consultative role. The Office of Foreign Assets Control collaborated on the development of core overview and examination procedures addressing compliance with regulations enforced by OFAC.
Financial Crimes Enforcement Network
WASHINGTON-Comptroller of the Currency John C. Dugan today said today that the OCC is committed to a process of Bank Secrecy Act and Anti-Money Laundering (BSA/AML) supervision and enforcement that is not only effective, but also measured and fair. "The post-9/11 world is profoundly different in many ways from what it used to be, and that is certainly true in the BSA area," Comptroller Dugan said in a speech before a money laundering conference sponsored jointly by the American Bankers Association and the American Bar Association. "Whether we like it or not, the traditional concerns of BSA, that, disrupting the money flow of the drug trade and other illicit activity, have been joined with concerns about combating the financing of terrorism," he said.
The Patriot Act, and How It Applies to the Banking Industry: The U.S. Department of the Treasury issued a final rule on September 26, 2002, to implement Section 314 of the USA PATRIOT Act that adds sections 103.100 and 103.110 to the Bank Secrecy Act regulations. These sections establish procedures that encourage information sharing between governmental authorities and financial institutions, and among financial institutions themselves. The new section 103.100 establishes a mechanism for law enforcement to communicate names of suspected terrorists and money launderers to financial institutions in return for securing the ability to promptly locate accounts and transactions involving those suspects. Financial institutions receiving names of suspects must search their account and transaction records for potential matches and report positive results to Treasury's Financial Crimes Enforcement Network (FinCEN) in the manner and time frame specified in the request. Each financial institution must designate a point of contact to receive information requests. FinCEN has prescribed that each financial institution supply point of contact information to its primary federal regulator. If you have not already done so, send by e-mail to FDICAdvisory@fdic.gov or by mail to FDIC, Special Activities Section, 550 17th Street NW, Washington, DC 20429, the following information: name of institution, name of point of contact, title, mailing address, e-mail address, telephone number, and fax number. Changes in contact information must be promptly reported.
Section 314(a) of the USA PATRIOT Act of 2001 (P.L. 107-56)1 , required the Secretary of the Treasury to adopt regulations to encourage regulatory authorities and law enforcement authorities to share with financial institutions information regarding individuals, entities, and organizations engaged in or reasonably suspected, based on credible evidence, of engaging in terrorist acts or money laundering activities. FinCEN issued a proposed rule on March 5, 2002, and the final rule on September 26, 2002(67 Fed. Reg. 60,579). Section 314(a) requirements are now published in 31 CFR Part 103.100.
The Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) Examination InfoBase, which is located on the Federal Financial Institutions Examination Council's (FFIEC) Web site, has been updated. The InfoBase can be found at www.ffiec.gov/bsa_aml_infobase. Highlights: * On November 3, 2005, the FFIEC updated the BSA/AML Examination InfoBase, which is located on its Web site. * The InfoBase is an automated tool for examiners and the banking industry that provides information on the FFIEC BSA/AML Examination Manual, released on June 30, 2005. The InfoBase also helps examiners and the industry to more easily use and navigate the Manual.
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