Risk Management Manual of Examination Policies - FDIC

BANK SECRECY ACT, ANTI-MONEY LAUNDERING,
AND OFFICE OF FOREIGN ASSETS CONTROL
person transactions. Management must review exempt
accounts at least one time per year and must document
appropriate monitoring and review of each exempt
account.
Management has exempted three customers, but has failed
to document monitoring of their accounts. Management
has stated that they did monitor the account transactions
and no suspicious activity appears evident; however,
management must retain appropriate documentation for all
account monitoring of exempt customers. Such monitoring
documentation could include, but is not limited to:
• Reviews of exempt customers cash transactions,
• Review of monthly statements and monthly activity,
• Interview notes with account owners or visitation
notes from reviewing the place of business,
• Documenting changes of ownership, or
• Documenting changes in amount, timing, or type of
transaction activity.
31 C.F.R. 103.27(a)
This section of the Financial Recordkeeping regulation
requires the financial institution to retain all Currency
Transaction Reports for five years.
Management failed to keep copies of all of the CTRs filed
during the past five years. Management can locate CTRs
filed for the past two years but has not consistently retained
CTR copies for the three years preceding. Management
needs to make sure that its record-keeping systems allow
for the retention and retrieval of all CTRs filed for the
previous five year time period.
31 C.F.R. 103.27(d)
This section of the Financial Recordkeeping regulation
requires the financial institution to include all appropriate
information required in the CTR.
Management has consistently failed to obtain information
on the individual conducting the transaction unless that
person is also the account owner. This information is
required in the CTR and must be completed. Since this is a
systemic failure, management needs to ensure proper
training is provided to tellers and other key employees to
ensure that this problem is corrected.
31 C.F.R. 103.121(b)(2)(i)(A)(4)(ii)
This section of the Financial Recordkeeping regulation
states that the financial institution must obtain a tax
Section 8.1
identification number or number and country of issuance of
any government-issued documentation.
The financial institution’s policies and programs require
that all employees obtain minimum customer identification
information; however, accounts in the Vermont Street
Branch have not been following minimum account opening
standards. Over half of the accounts opened at the
Vermont Street Branch since October 1, 2003, when this
regulation came into effect, have been opened without tax
identification numbers or similar personal identification
number for non-U.S. citizens. Management must ensure
that BSA policies and regulations are followed throughout
the institution and verify through BSA officer reviews and
independent reviews that requirements are being met.
WEB-SITE REFERENCES
Financial Crimes Enforcement Network (FinCEN):
www.fincen.gov
FinCEN Money Services Businesses:
www.msb.gov
Financial Action Task Force:
www.oecd.org/fatf
Office of Foreign Assets Control:
www.ustreas.gov/offices/eotffc/ofac
DSC Risk Management Manual of Examination Policies 8.1-55 Bank Secrecy Act (12-04)
Federal Deposit Insurance Corporation