BSA/AML Examination Manual - ffiec

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• Insufficient information on the ultimate PTA users. • Evidence of substantive or ongoing suspicious activity. Payable Through Accounts — Overview • Inability to ensure that the PTAs are not being used for money laundering or other illicit purposes. FFIEC BSA/AML Examination Manual 180 8/24/2007
Payable Through Accounts — Examination Procedures Examination Procedures Payable Through Accounts Objective. Assess the adequacy of the bank’s systems to manage the risks associated with payable through accounts (PTAs), and management’s ability to implement effective monitoring and reporting systems. 1. Review the policies, procedures, and processes related to PTAs. Evaluate the adequacy of the policies, procedures, and processes given the bank’s PTA activities and the risks they present. Assess whether the controls are adequate to reasonably protect the bank from money laundering and terrorist financing. Determine whether: Criteria for opening PTA relationships with a foreign financial institution are adequate. Examples of factors that may be used include: jurisdiction; bank secrecy or money laundering haven; products, services, and markets; purpose; anticipated activity; customer history; ownership; senior management; certificate of incorporation; banking license; certificate of good standing; and demonstration of the foreign financial institution’s operational capability to monitor account activity. Appropriate information has been obtained and validated from the foreign financial institution concerning the identity of any persons having authority to direct transactions through the PTA. Information and enhanced due diligence have been obtained from the foreign financial institution concerning the source and beneficial ownership of funds of persons who have authority to direct transactions through the PTA (e.g., name, address, expected activity level, place of employment, description of business, related accounts, identification of foreign politically exposed persons, source of funds, and articles of incorporation). Sub-accounts are not opened before the U.S. bank has reviewed and approved the customer information. Master or sub-accounts can be closed if the information provided to the bank has been materially inaccurate or incomplete. The bank can identify all signers on each sub-account. 2. From a review of management information systems (MIS) and internal risk rating factors, determine whether the bank effectively identifies and monitors PTA accounts. 3. Determine whether the bank’s system for monitoring PTA accounts for suspicious activities, and reporting suspicious activities, is adequate given the bank’s size, complexity, location, and types of customer relationships. FFIEC BSA/AML Examination Manual 181 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 —
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Currency Transaction Reporting —
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Currency Transaction Reporting Exem
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• Operating a pawn brokerage. Cur
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Currency Transaction Reporting Exem
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Information Sharing — Overview In
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Information Sharing — Overview su
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Information Sharing — Overview es
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Copies of section 314(a) requests.
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Purchase and Sale of Monetary Instr
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Funds Transfers Recordkeeping — O
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Funds Transfers Recordkeeping — O
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Responsibilities of Beneficiary’s
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Funds Transfers Recordkeeping — E
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Foreign Correspondent Account Recor
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Private Banking Due Diligence Progr
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Page 133 and 134: Special Measures — Overview minim
Page 135 and 136: Examination Procedures Special Meas
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: Payable Through Accounts — Overvi
Page 187 and 188: Payable Through Accounts — Examin
Page 189 and 190: Risk Mitigation Pouch Activities
Page 191 and 192: Pouch Activities — Examination Pr
Page 193 and 194: Electronic Banking — Overview lin
Page 195 and 196: Examination Procedures Electronic B
Page 197 and 198: Funds Transfers — Overview and on
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Page 201 and 202: Examination Procedures Funds Transf
Page 203 and 204: Automated Clearing House Transactio
Page 209 and 210: Transaction Testing Automated Clear
Page 211 and 212: Electronic Cash — Overview Using
Page 213 and 214: Third-Party Payment Processors —
Page 215 and 216: Third-Party Payment Processors —
Page 217 and 218: Purchase and Sale of Monetary Instr
Page 219 and 220: Brokered Deposits — Overview Brok
Page 221 and 222: Examination Procedures Brokered Dep
Page 223 and 224: Privately Owned Automated Teller Ma
Page 225 and 226: • Expected account activity, incl
Page 227 and 228: Privately Owned ATMs — Examinatio
Page 229 and 230: Nondeposit Investment Products —
Page 231 and 232: Nondeposit Investment Products —
Page 233 and 234: − 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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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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