BSA/AML Examination Manual - ffiec

More documents

Recommendations

Info

Business Entities (Domestic and Foreign) — Overview • Payments have no stated purpose, do not reference goods or services, or identify only a contract or invoice number. • Goods or services, if identified, do not match profile of company provided by respondent bank or character of the financial activity; a company references remarkably dissimilar goods and services in related funds transfers; explanation given by foreign respondent bank is inconsistent with observed funds transfer activity. • Transacting businesses share the same address, provide only a registered agent’s address, or other address inconsistencies. • Many or all of the funds transfers are sent in large, round dollar, hundred dollar, or thousand dollar amounts. • Unusually large number and variety of beneficiaries receiving funds transfers from one company. • Frequent involvement of multiple jurisdictions or beneficiaries located in high-risk OFCs. • A foreign correspondent bank exceeds the expected volume in its client profile for funds transfers, or an individual company exhibits a high volume and pattern of funds transfers that is inconsistent with its normal business activity. • Multiple high-value payments or transfers between shell companies with no apparent legitimate business purpose. • Purpose of the shell company is unknown or unclear. Risk Mitigation Management should develop policies, procedures, and processes that enable the bank to identify account relationships, in particular deposit accounts, with business entities, and monitor the risks associated with these accounts in all the bank’s departments. Business entity customers may open accounts within the private banking department, within the trust department, or at local branches. Management should establish appropriate due diligence at account opening and during the life of the relationship to manage risk in these accounts. The bank should gather sufficient information on the business entities and their beneficial owners to understand and assess the risks of the account relationship. Important information for determining the valid use of these entities includes the type of business, the purpose of the account, the source of funds, and the source of wealth of the owner or beneficial owner. The bank’s Customer Identification Program (CIP) should detail the identification requirements for opening an account for a business entity. When opening an account for a customer that is not an individual, banks are permitted by 31 CFR 103.121 to obtain information about the individuals who have authority and control over such accounts in order to verify the customer’s identity (the customer being the business entity). Required FFIEC BSA/AML Examination Manual 294 8/24/2007
Business Entities (Domestic and Foreign) — Overview account opening information may include articles of incorporation, a corporate resolution by the directors authorizing the opening of the account, or the appointment of a person to act as a signatory for the entity on the account. Particular attention should be paid to articles of association that allow for nominee shareholders, board members, and bearer shares. If the bank, through its trust or private banking departments, is facilitating the establishment of a business entity for a new or existing customer, the money laundering risk to the bank is typically mitigated. Since the bank is aware of the parties (e.g., grantors, beneficiaries, and shareholders) involved in the business entity, initial due diligence and verification is easier to obtain. Furthermore, in such cases, the bank frequently has ongoing relationships with the customers initiating the establishment of a business entity. Risk assessments may include a review of the domestic or international jurisdiction where the business entity was established, the type of account (or accounts) and expected versus actual transaction activities, the types of products that will be used, and whether the business entity was created in-house or externally. If ownership is held in bearer share form, banks should assess the risks these relationships pose and determine the appropriate controls. For example, banks may choose to maintain (or have an independent third party maintain) bearer shares for new clients, or those without wellestablished relationships with the institution. For well-known, established customers, banks may find that periodically recertifying beneficial ownership is effective. The bank’s risk assessment of a business entity customer becomes more important in complex corporate formations. For example, a foreign IBC may establish a layered series of business entities, with each entity naming its parent as its beneficiary. Ongoing account monitoring is critical to ensure that the accounts are reviewed for unusual and suspicious activity. The bank should be aware of high-risk transactions in these accounts, such as activity that has no business or apparent lawful purpose, funds transfer activity to and from high-risk jurisdictions, currency intensive transactions, and frequent changes in the ownership or control of the nonpublic business entity. FFIEC BSA/AML Examination Manual 295 8/24/2007
Page 1 and 2:
Bank Secrecy Act / Anti-Money Laund
Page 3 and 4:
Table of Contents EXPANDED EXAMINAT
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 25 and 26:
Page 27 and 28:
Analysis of Specific Risk Categorie
Page 29 and 30:
Page 31 and 32:
BSA/AML Risk Assessment — Examina
Page 33 and 34:
BSA/AML Compliance Program — Over
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
BSA/AML Compliance Program — Exam
Page 41 and 42:
Page 43 and 44:
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:
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
Page 65 and 66:
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
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Suspicious Activity Reporting — E
Page 79 and 80:
Suspicious Activity Reporting — E
Page 81 and 82:
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:
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 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Private Banking Due Diligence Progr
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
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 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Enterprise-Wide BSA/AML Compliance
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Corporate management. Enterprise-Wi
Page 161 and 162:
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
Page 197 and 198:
Funds Transfers — Overview and on
Page 199 and 200:
Funds Transfers — Overview busine
Page 201 and 202:
Examination Procedures Funds Transf
Page 203 and 204:
Automated Clearing House Transactio
Page 205 and 206:
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
Page 251 and 252: Private Banking — Overview Privat
Page 253 and 254: Customer Risk Assessment Private Ba
Page 255 and 256: Private Banking — Overview determ
Page 257 and 258: 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
Page 267 and 268: Nonresident Aliens and Foreign Indi
Page 269 and 270: Politically Exposed Persons — Ove
Page 271 and 272: Politically Exposed Persons — Ove
Page 273 and 274: Politically Exposed Persons — Exa
Page 275 and 276: Embassy and Foreign Consulate Accou
Page 277 and 278: Embassy and Foreign Consulate Accou
Page 279 and 280: Non-Bank Financial Institutions —
Page 287 and 288: Professional Service Providers —
Page 289 and 290: Professional Service Providers —
Page 291 and 292: Non-Governmental Organizations and
Page 293 and 294: Non-Governmental Organizations and
Page 295 and 296: Business Entities (Domestic and For
Page 297: Risk Factors Business Entities (Dom
Page 301 and 302: Business Entities (Domestic and For
Page 303 and 304: Cash-Intensive Businesses — Overv
Page 305 and 306: Appendix A: BSA Laws and Regulation
Page 311 and 312: Appendix B: BSA/AML Directives Appe
Page 313 and 314: Web Sites Appendix C: BSA/AML Refer
Page 315 and 316: Appendix C: BSA/AML References •
Page 317 and 318: Appendix D: Statutory Definition of
Page 319 and 320: Appendix E: International Organizat
Page 321 and 322: Appendix F: Money Laundering and Te
Page 325 and 326: Privately Owned Automated Teller Ma
Page 329 and 330: Funds Transfers Appendix F: Money L
Page 331 and 332: Appendix G: Structuring However, tw
Page 333 and 334: Appendix H: Request Letter Items (C
Page 339 and 340: Expanded Examination Procedures App
Page 341 and 342: Parallel Banking _ List any paralle
Page 349 and 350:
Appendix H: Request Letter Items (C
Page 351 and 352:
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
Page 361 and 362:
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
Page 367 and 368:
Name and address of the beneficiary
Page 369 and 370:
Appendix P: BSA Record Retention Re
Page 371 and 372:
Acronym or abbreviation Full name E
Page 373 and 374:
Acronym or abbreviation Full name N
Page 375 and 376:
Appendix R: Enforcement Guidance Ap
Page 377 and 378:
Appendix R: Enforcement Guidance As
Page 379 and 380:
Appendix R: Enforcement Guidance ex
Page 381 and 382:
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
Page 397 and 398:
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
show all

BSA/AML Examination Manual - ffiec

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?