BSA/AML Examination Manual - ffiec

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Special Measures — Overview financial institution, class of transactions, or type of account that is of primary money laundering concern. The imposition of this measure can prohibit U.S. banks from establishing, maintaining, administering, or managing in the United States a correspondent or payable through account for, or on behalf of, any financial institution from a specific foreign jurisdiction. This measure may also be applied to specific foreign financial institutions and their subsidiaries. The regulations that implement these prohibitions may require banks to review their account records to determine whether they maintain no accounts directly for, or on behalf of, such entities. In addition to the direct prohibition, banks may also be: • Prohibited from knowingly providing indirect access to the specific entities through its other banking relationships. • Required to notify correspondent accountholders that they must not provide the specific entity with access to the account maintained at the U.S. bank. • Required to take reasonable steps to identify any indirect use of its accounts by the specific entity. Special Measures Guidance Orders and regulations implementing specific special measures taken under section 311 of the Patriot Act are not static; they can be issued or rescinded over time as the Secretary of the Treasury determines that a subject jurisdiction, institution, class of transactions, or type of account is no longer of primary money laundering concern. In addition, special measures imposed against one jurisdiction, institution, class of transactions, or type of account may vary from those imposed in other situations. Examiners should also note that an order or rule imposing a special measure may establish a standard of due diligence that banks must apply to comply with the particular special measure. Accordingly, this manual does not detail specific final special measures, since any such listing could quickly become dated. Examiners reviewing compliance with this section should visit FinCEN’s web site at www.fincen.gov for current information on final special measures. Examiners should only examine for those special measures that are final, and should not review banks for special measures that are proposed. FFIEC BSA/AML Examination Manual 130 8/24/2007
Examination Procedures Special Measures Special Measures — Examination Procedures Objective. Assess the bank’s compliance with statutory and regulatory requirements for special measures issued under section 311 of the Patriot Act. 1. Determine the extent of the bank’s international banking activities and the foreign jurisdictions in which the bank conducts transactions and activities, with particular emphasis on foreign correspondent banking and payable through accounts. 2. As applicable, determine whether the bank has established policies, procedures, and processes to respond to specific special measures imposed by FinCEN that are applicable to its operations. Evaluate the adequacy of the policies, procedures, and processes for detecting accounts or transactions with jurisdictions, financial institutions, or transactions subject to final special measures. 3. Determine, through discussions with management and review of the bank’s documentation, whether the bank has taken action in response to final special measures. Transaction Testing 4. Determine all final special measures issued by FinCEN under section 311 that are applicable to the bank (refer to www.fincen.gov). 5. For any of the first four types of special measures, determine whether the bank obtained, recorded, or reported the information required by each particular special measure. 6. For the fifth special measure (prohibition), determine whether the bank complied with the prohibitions or restrictions required by each particular special measure, and complied with any other actions required by the special measures. 7. As necessary, search the bank’s management information systems (MIS) and other appropriate records for accounts or transactions with jurisdictions, financial institutions, or transactions subject to final special measures. 8. On the basis of examination procedures completed, including transaction testing, form a conclusion about the ability of policies, procedures, and processes to meet regulatory requirements associated with special measures. FFIEC BSA/AML Examination Manual 131 8/24/2007
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Bank Secrecy Act / Anti-Money Laund
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Table of Contents EXPANDED EXAMINAT
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INTRODUCTION Introduction This Fede
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Background Introduction In 1970, Co
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Introduction institutions, such as
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Introduction proliferation of weapo
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Introduction Although the motivatio
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Scoping and Planning — Overview C
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Scoping and Planning — Overview T
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Scoping and Planning — Examinatio
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Scoping and Planning — Examinatio
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BSA/AML Risk Assessment — Overvie
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Analysis of Specific Risk Categorie
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BSA/AML Risk Assessment — Examina
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BSA/AML Compliance Program — Over
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BSA/AML Compliance Program — Exam
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Developing Conclusions and Finalizi
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Developing Conclusions and Finalizi
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Customer Identification Program —
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Customer Information Required Custo
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Transaction Testing Customer Identi
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Customer Due Diligence — Overview
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Customer Due Diligence — Examinat
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Suspicious Activity Reporting — O
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Law Enforcement Inquiries and Reque
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Timing of a SAR Filing Suspicious A
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Suspicious Activity Reporting — E
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Suspicious Activity Reporting — E
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Currency Transaction Reporting —
Page 83 and 84: Currency Transaction Reporting —
Page 85 and 86: Currency Transaction Reporting Exem
Page 87 and 88: • Operating a pawn brokerage. Cur
Page 89 and 90: Currency Transaction Reporting Exem
Page 91 and 92: Information Sharing — Overview In
Page 93 and 94: Information Sharing — Overview su
Page 95 and 96: Information Sharing — Overview es
Page 97 and 98: Copies of section 314(a) requests.
Page 99 and 100: Purchase and Sale of Monetary Instr
Page 101 and 102: Purchase and Sale of Monetary Instr
Page 103 and 104: Funds Transfers Recordkeeping — O
Page 105 and 106: Funds Transfers Recordkeeping — O
Page 107 and 108: Responsibilities of Beneficiary’s
Page 109 and 110: Funds Transfers Recordkeeping — E
Page 111 and 112: Foreign Correspondent Account Recor
Page 125 and 126: Private Banking Due Diligence Progr
Page 133: Special Measures — Overview minim
Page 137 and 138: Foreign Bank and Financial Accounts
Page 139 and 140: International Transportation of Cur
Page 141 and 142: Office of Foreign Assets Control
Page 153 and 154: Enterprise-Wide BSA/AML Compliance
Page 159 and 160: Corporate management. Enterprise-Wi
Page 161 and 162: Foreign Branches and Offices of U.S
Page 167 and 168: Examination Procedures Parallel Ban
Page 169 and 170: Correspondent Accounts (Domestic)
Page 175 and 176: Correspondent Accounts (Foreign)
Page 177 and 178: Correspondent Accounts (Foreign)
Page 179 and 180: U.S. Dollar Drafts — Overview U.S
Page 181 and 182: U.S. Dollar Drafts — Examination
Page 183 and 184: Payable Through Accounts — Overvi
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Payable Through Accounts — Examin
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Payable Through Accounts — Examin
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Risk Mitigation Pouch Activities
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Pouch Activities — Examination Pr
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Electronic Banking — Overview lin
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Examination Procedures Electronic B
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Funds Transfers — Overview and on
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Funds Transfers — Overview busine
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Examination Procedures Funds Transf
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Automated Clearing House Transactio
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Transaction Testing Automated Clear
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Electronic Cash — Overview Using
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Third-Party Payment Processors —
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Third-Party Payment Processors —
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Purchase and Sale of Monetary Instr
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Brokered Deposits — Overview Brok
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Examination Procedures Brokered Dep
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Privately Owned Automated Teller Ma
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• Expected account activity, incl
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Privately Owned ATMs — Examinatio
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Nondeposit Investment Products —
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Nondeposit Investment Products —
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− Holdings in excess of the custo
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Insurance — Overview its insuranc
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Examination Procedures Insurance In
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Concentration Accounts — Overview
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Concentration Accounts — Examinat
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Lending Activities — Overview bus
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Trade Finance Activities — Overvi
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Risk Mitigation Trade Finance Activ
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Trade Finance Activities — Overvi
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Private Banking — Overview Privat
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Customer Risk Assessment Private Ba
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Private Banking — Overview determ
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Offshore entities. Cash-intensive b
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Trust and Asset Management Services
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• The type of trust or agency acc
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Transaction Testing Trust and Asset
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Nonresident Aliens and Foreign Indi
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Nonresident Aliens and Foreign Indi
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Politically Exposed Persons — Ove
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Politically Exposed Persons — Ove
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Politically Exposed Persons — Exa
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Embassy and Foreign Consulate Accou
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Embassy and Foreign Consulate Accou
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Non-Bank Financial Institutions —
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Professional Service Providers —
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Professional Service Providers —
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Non-Governmental Organizations and
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Non-Governmental Organizations and
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Business Entities (Domestic and For
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Risk Factors Business Entities (Dom
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Cash-Intensive Businesses — Overv
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Appendix A: BSA Laws and Regulation
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Appendix B: BSA/AML Directives Appe
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Web Sites Appendix C: BSA/AML Refer
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Appendix C: BSA/AML References •
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Appendix D: Statutory Definition of
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Appendix E: International Organizat
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Appendix F: Money Laundering and Te
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Privately Owned Automated Teller Ma
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Funds Transfers Appendix F: Money L
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Appendix G: Structuring However, tw
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Appendix H: Request Letter Items (C
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Expanded Examination Procedures App
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Parallel Banking _ List any paralle
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Appendix I: Risk Assessment Link to
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Appendix J: Quantity of Risk Matrix
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Appendix K: Customer Risk versus Du
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When did the suspicious activity ta
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Low No history of OFAC actions. No
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Appendix O: Examiner Tools for Tran
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Appendix O: Examiner Tools for Tran
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Signature Cards Appendix P: BSA Rec
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Name and address of the beneficiary
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Appendix P: BSA Record Retention Re
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Acronym or abbreviation Full name E
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Acronym or abbreviation Full name N
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Appendix R: Enforcement Guidance Ap
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Appendix R: Enforcement Guidance As
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Appendix R: Enforcement Guidance ex
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Appendix R: Enforcement Guidance FF
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Backfiling. See Currency Transactio
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overview, 165-167 request letter it
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money services businesses, 279 nond
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Export Administration Act of 1979,
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Index 314(a) record searches, 88 Cu
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Index for a BSA/AML compliance prog
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guidance on providing banking servi
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247, 253, H-15 Offshore Financial C
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Purchase and Sale of Monetary Instr
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trade finance activities, H-14 trus
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enterprise-wide, 149-150, 152, 153
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U United Nations, 7, 137 Updating O
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