BSA/AML Examination Manual - ffiec

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Table of Contents The sections of the FFIEC BSA/AML Examination Manual that have been added or significantly modified from the previous edition are reflected by date. INTRODUCTION ........................................................................................................... 1 CORE EXAMINATION OVERVIEW AND PROCEDURES FOR ASSESSING THE BSA/AML COMPLIANCE PROGRAM......................................................................... 11 Scoping and Planning — Overview.......................................................................... 11 Examination Procedures ...................................................................................... 15 BSA/AML Risk Assessment — Overview (2007) .................................................. 18 Examination Procedures ...................................................................................... 27 BSA/AML Compliance Program — Overview........................................................ 28 Examination Procedures ...................................................................................... 34 Developing Conclusions and Finalizing the Examination — Overview.................. 40 Examination Procedures ...................................................................................... 41 CORE EXAMINATION OVERVIEW AND PROCEDURES FOR REGULATORY REQUIREMENTS AND RELATED TOPICS ............................................................... 45 Customer Identification Program — Overview........................................................ 45 Examination Procedures ...................................................................................... 52 Customer Due Diligence — Overview (2007) ........................................................ 56 Examination Procedures ...................................................................................... 59 Suspicious Activity Reporting — Overview (2007)................................................ 60 Examination Procedures ...................................................................................... 72 Currency Transaction Reporting — Overview......................................................... 77 Examination Procedures ...................................................................................... 79 Currency Transaction Reporting Exemptions — Overview..................................... 81 Examination Procedures ...................................................................................... 85 Information Sharing — Overview ............................................................................ 87 Examination Procedures ...................................................................................... 92 Purchase and Sale of Monetary Instruments Recordkeeping — Overview.............. 95 Examination Procedures ...................................................................................... 98 Funds Transfers Recordkeeping — Overview.......................................................... 99 Examination Procedures .................................................................................... 105 Foreign Correspondent Account Recordkeeping and Due Diligence — Overview (2007). ...... ..……………………………………………………106 Examination Procedures .................................................................................... 115 Private Banking Due Diligence Program (Non-U.S. Persons) — Overview ........ 120 Examination Procedures .................................................................................... 125 Special Measures — Overview............................................................................... 128 Examination Procedures .................................................................................... 131 Foreign Bank and Financial Accounts Reporting — Overview ............................ 132 Examination Procedures .................................................................................... 133 International Transportation of Currency or Monetary Instruments Reporting — Overview……………...…………………………………………………….134 Examination Procedures .................................................................................... 136 Office of Foreign Assets Control — Overview (2007) ......................................... 137 Examination Procedures .................................................................................... 146 FFIEC BSA/AML Examination Manual i 8/24/2007
Table of Contents EXPANDED EXAMINATION OVERVIEW AND PROCEDURES FOR AN ENTERPRISE-WIDE COMPLIANCE PROGRAM AND OTHER STRUCTURES .... 149 Enterprise-Wide BSA/AML Compliance Program — Overview (2007)............... 149 Examination Procedures .................................................................................... 153 Foreign Branches and Offices of U.S. Banks — Overview ................................... 156 Examination Procedures .................................................................................... 160 Parallel Banking — Overview................................................................................ 162 Examination Procedures .................................................................................... 163 EXPANDED EXAMINATION OVERVIEW AND PROCEDURES FOR PRODUCTS AND SERVICES.......................................................................................................... 165 Correspondent Accounts (Domestic) — Overview ................................................ 165 Examination Procedures .................................................................................... 168 Correspondent Accounts (Foreign) — Overview (2007) ...................................... 170 Examination Procedures .................................................................................... 173 U.S. Dollar Drafts — Overview ............................................................................. 175 Examination Procedures .................................................................................... 176 Payable Through Accounts — Overview ............................................................... 178 Examination Procedures .................................................................................... 181 Pouch Activities — Overview ................................................................................ 184 Examination Procedures .................................................................................... 186 Electronic Banking — Overview (2007) ............................................................... 188 Examination Procedures .................................................................................... 191 Funds Transfers — Overview (2007) .................................................................... 192 Examination Procedures .................................................................................... 197 Automated Clearing House Transactions — Overview (2007)............................. 199 Examination Procedures .................................................................................... 204 Electronic Cash — Overview ................................................................................. 206 Examination Procedures .................................................................................... 208 Third-Party Payment Processors — Overview....................................................... 209 Examination Procedures .................................................................................... 211 Purchase and Sale of Monetary Instruments — Overview..................................... 212 Examination Procedures .................................................................................... 213 Brokered Deposits — Overview............................................................................. 215 Examination Procedures .................................................................................... 217 Privately Owned Automated Teller Machines — Overview (2007) ..................... 219 Examination Procedures .................................................................................... 222 Nondeposit Investment Products — Overview....................................................... 224 Examination Procedures .................................................................................... 228 Insurance — Overview ........................................................................................... 230 Examination Procedures .................................................................................... 233 Concentration Accounts — Overview.................................................................... 235 Examination Procedures .................................................................................... 237 Lending Activities — Overview............................................................................. 238 Examination Procedures .................................................................................... 240 Trade Finance Activities — Overview (2007)....................................................... 241 Examination Procedures .................................................................................... 246 FFIEC BSA/AML Examination Manual ii 8/24/2007
Page 1: Bank Secrecy Act / Anti-Money Laund
Page 5 and 6: INTRODUCTION Introduction This Fede
Page 7 and 8: Background Introduction In 1970, Co
Page 9 and 10: Introduction institutions, such as
Page 11 and 12: Introduction proliferation of weapo
Page 13 and 14: Introduction Although the motivatio
Page 15 and 16: Scoping and Planning — Overview C
Page 17 and 18: Scoping and Planning — Overview T
Page 19 and 20: Scoping and Planning — Examinatio
Page 21 and 22: Scoping and Planning — Examinatio
Page 23 and 24: BSA/AML Risk Assessment — Overvie
Page 27 and 28: Analysis of Specific Risk Categorie
Page 31 and 32: BSA/AML Risk Assessment — Examina
Page 33 and 34: BSA/AML Compliance Program — Over
Page 39 and 40: BSA/AML Compliance Program — Exam
Page 45 and 46: Developing Conclusions and Finalizi
Page 47 and 48: Developing Conclusions and Finalizi
Page 49 and 50: Customer Identification Program —
Page 51 and 52: Customer Information Required Custo
Page 53 and 54:
Customer Identification Program —
Page 55 and 56:
Page 57 and 58:
Transaction Testing Customer Identi
Page 59 and 60:
Page 61 and 62:
Customer Due Diligence — Overview
Page 63 and 64:
Customer Due Diligence — Examinat
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Suspicious Activity Reporting — O
Page 67 and 68:
Page 69 and 70:
Law Enforcement Inquiries and Reque
Page 71 and 72:
Timing of a SAR Filing Suspicious A
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Page 75 and 76:
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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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Page 103 and 104:
Funds Transfers Recordkeeping — O
Page 105 and 106:
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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Page 119 and 120:
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Page 123 and 124:
Page 125 and 126:
Private Banking Due Diligence Progr
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Page 131 and 132:
Page 133 and 134:
Special Measures — Overview minim
Page 135 and 136:
Examination Procedures Special Meas
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Foreign Bank and Financial Accounts
Page 139 and 140:
International Transportation of Cur
Page 141 and 142:
Office of Foreign Assets Control
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
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Enterprise-Wide BSA/AML Compliance
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Corporate management. Enterprise-Wi
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Foreign Branches and Offices of U.S
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Examination Procedures Parallel Ban
Page 169 and 170:
Correspondent Accounts (Domestic)
Page 171 and 172:
Page 173 and 174:
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
Page 185 and 186:
Payable Through Accounts — Examin
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
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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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Page 207 and 208:
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:
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
Page 235 and 236:
Insurance — Overview its insuranc
Page 237 and 238:
Examination Procedures Insurance In
Page 239 and 240:
Concentration Accounts — Overview
Page 241 and 242:
Concentration Accounts — Examinat
Page 243 and 244:
Lending Activities — Overview bus
Page 245 and 246:
Trade Finance Activities — Overvi
Page 247 and 248:
Risk Mitigation Trade Finance Activ
Page 249 and 250:
Trade Finance Activities — Overvi
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Private Banking — Overview Privat
Page 253 and 254:
Customer Risk Assessment Private Ba
Page 255 and 256:
Private Banking — Overview determ
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Offshore entities. Cash-intensive b
Page 259 and 260:
Trust and Asset Management Services
Page 261 and 262:
• The type of trust or agency acc
Page 263 and 264:
Transaction Testing Trust and Asset
Page 265 and 266:
Nonresident Aliens and Foreign Indi
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Nonresident Aliens and Foreign Indi
Page 269 and 270:
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 —
Page 281 and 282:
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Page 285 and 286:
Page 287 and 288:
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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Page 309 and 310:
Page 311 and 312:
Appendix B: BSA/AML Directives Appe
Page 313 and 314:
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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Page 337 and 338:
Page 339 and 340:
Expanded Examination Procedures App
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Parallel Banking _ List any paralle
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Appendix I: Risk Assessment Link to
Page 353 and 354:
Appendix J: Quantity of Risk Matrix
Page 355 and 356:
Appendix K: Customer Risk versus Du
Page 357 and 358:
When did the suspicious activity ta
Page 359 and 360:
Low No history of OFAC actions. No
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Appendix O: Examiner Tools for Tran
Page 363 and 364:
Appendix O: Examiner Tools for Tran
Page 365 and 366:
Signature Cards Appendix P: BSA Rec
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Name and address of the beneficiary
Page 369 and 370:
Appendix P: BSA Record Retention Re
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Acronym or abbreviation Full name E
Page 373 and 374:
Acronym or abbreviation Full name N
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Appendix R: Enforcement Guidance Ap
Page 377 and 378:
Appendix R: Enforcement Guidance As
Page 379 and 380:
Appendix R: Enforcement Guidance ex
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Appendix R: Enforcement Guidance FF
Page 383 and 384:
Backfiling. See Currency Transactio
Page 385 and 386:
overview, 165-167 request letter it
Page 387 and 388:
money services businesses, 279 nond
Page 389 and 390:
Export Administration Act of 1979,
Page 391 and 392:
Index 314(a) record searches, 88 Cu
Page 393 and 394:
Index for a BSA/AML compliance prog
Page 395 and 396:
guidance on providing banking servi
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247, 253, H-15 Offshore Financial C
Page 399 and 400:
Page 401 and 402:
trade finance activities, H-14 trus
Page 403 and 404:
enterprise-wide, 149-150, 152, 153
Page 405:
U United Nations, 7, 137 Updating O
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