BSA/AML Examination Manual - ffiec

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Appendix J: Quantity of Risk Matrix Appendix J: Quantity of Risk Matrix Examiners should use the following matrix, as appropriate, when determining the quantity of BSA/AML risks. Low Moderate High Stable, known customer base. Customer base increasing due to branching, merger, or acquisition. No electronic banking (ebanking) or the web site is informational or nontransactional. On the basis of information received from the BSAreporting database, there are few or no large currency or structured transactions. Identified a few high-risk customers and businesses. No foreign correspondent financial institution accounts. The bank does not engage in pouch activities, offer specialuse accounts, or offer payable through accounts (PTAs), or provide U.S. dollar draft services. The bank is beginning ebanking and offers limited products and services. On the basis of information received from the BSAreporting database, there is a moderate volume of large currency or structured transactions. Identified a moderate number of high-risk customers and businesses. The bank has a few foreign correspondent financial institution accounts, but typically with financial institutions with adequate AML policies and procedures from low-risk countries, and minimal pouch activities, special-use accounts, PTAs, or U.S. dollar draft services. A large and growing customer base in a wide and diverse geographic area. The bank offers a wide array of e-banking products and services (i.e., account transfers, e-bill payment, or accounts opened via the Internet). On the basis of information received from the BSAreporting database, there is a significant volume of large currency or structured transactions. Identified a large number of high-risk customers and businesses. The bank maintains a large number of foreign correspondent financial institution accounts with financial institutions with inadequate AML policies and procedures, particularly those located in high-risk jurisdictions, or offers substantial pouch activities, special-use accounts, PTAs, or U.S. dollar draft services. FFIEC BSA/AML Examination Manual J–1 8/24/2007
Appendix J: Quantity of Risk Matrix Low Moderate High The bank offers limited or no private banking services or trust and asset management products or services. Few international accounts or very low volume of currency activity in the accounts. A limited number of funds transfers for customers, noncustomers, limited thirdparty transactions, and no foreign funds transfers. The bank is not located in a High Intensity Drug Trafficking Area (HIDTA) 245 or High Intensity Financial Crime Area (HIFCA). No fund transfers or account relationships involve HIDTAs or HIFCAs. No transactions with high-risk geographic locations. The bank offers limited domestic private banking services or trust and asset management products or services over which the bank has investment discretion. Strategic plan may be to increase trust business. Moderate level of international accounts with unexplained currency activity. A moderate number of funds transfers. A few international funds transfers from personal or business accounts with typically low-risk countries. The bank is located in an HIDTA or an HIFCA. Bank has some fund transfers or account relationships that involve HIDTAs or HIFCAs. Minimal transactions with high-risk geographic locations. 245 A list of HIDTAs is available at www.whitehousedrugpolicy.gov/index.html. The bank offers significant domestic and international private banking or trust and asset management products or services. Private banking or trust and asset management services are growing. Products offered include investment management services, and trust accounts are predominantly nondiscretionary versus where the bank has full investment discretion. Large number of international accounts with unexplained currency activity. A large number of noncustomer funds transfer transactions and payable upon proper identification (PUPID) transactions. Frequent funds from personal or business accounts to or from high-risk jurisdictions, and financial secrecy havens or jurisdictions. Bank is located in an HIDTA and an HIFCA. A large number of fund transfers or account relationships involve HIDTAs or HIFCAs. Significant volume of transactions with high-risk geographic locations. FFIEC BSA/AML Examination Manual J–2 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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Special Measures — Overview minim
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Examination Procedures Special Meas
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Foreign Bank and Financial Accounts
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International Transportation of Cur
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Office of Foreign Assets Control
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Enterprise-Wide BSA/AML Compliance
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Corporate management. Enterprise-Wi
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Foreign Branches and Offices of U.S
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Examination Procedures Parallel Ban
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Correspondent Accounts (Domestic)
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Correspondent Accounts (Foreign)
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Correspondent Accounts (Foreign)
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U.S. Dollar Drafts — Overview U.S
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U.S. Dollar Drafts — Examination
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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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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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Business Entities (Domestic and For
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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 351: Appendix I: Risk Assessment Link to
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: Purchase and Sale of Monetary Instr
Page 401 and 402: 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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