BSA/AML Examination Manual - ffiec

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Currency Transaction Reporting — Examination Procedures The bank retains copies of CTRs for five years from the date of the report (31 CFR 103.27(a)(3)). 5. 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 currency transaction reporting. FFIEC BSA/AML Examination Manual 80 8/24/2007
Currency Transaction Reporting Exemptions — Overview Currency Transaction Reporting Exemptions — Overview Objective. Assess the bank’s compliance with statutory and regulatory requirements for exemptions from the currency transaction reporting requirements. U.S. Treasury regulations have historically recognized that the routine reporting of some types of large currency transactions does not necessarily aid law enforcement authorities and may place unreasonable burdens on banks. Consequently, a bank may exempt certain types of customers from currency transaction reporting. The Money Laundering Suppression Act of 1994 (MLSA) established a two-phase exemption process. Under Phase I exemptions, transactions in currency by banks, governmental departments or agencies, and public or listed companies and their subsidiaries are exempt from reporting. Under Phase II exemptions, transactions in currency by smaller businesses that meet specific criteria laid out in FinCEN’s regulations may be exempted from reporting. To exempt a customer from CTR reporting, a bank must file a Designation of Exempt Person form (FinCEN Form 110). Phase I CTR Exemptions (31 CFR 103.22(d)(2)(i)–(v)) FinCEN’s rule identifies five categories of Phase I exempt persons: • A bank, to the extent of its domestic operations. • A federal, state, or local government agency or department. • Any entity exercising governmental authority within the United States. • Any entity (other than a bank) whose common stock is listed on the New York, American, or NASDAQ stock exchanges (with some exceptions). • Any subsidiary (other than a bank) of any “listed entity” that is organized under U.S. law and at least 51 percent of whose common stock is owned by the listed entity. Filing Time Frames Banks must file a one-time Designation of Exempt Person form to exempt a Phase I entity from currency transaction reporting. The exemption of a Phase I entity covers all transactions in currency with the exempted entity, not only transactions in currency conducted through an account. The form must be filed with the Internal Revenue Service (IRS) within 30 days after the first transaction in currency that the bank wishes to exempt. FFIEC BSA/AML Examination Manual 81 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
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 57 and 58: Transaction Testing Customer Identi
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 69 and 70: Law Enforcement Inquiries and Reque
Page 71 and 72: Timing of a SAR Filing Suspicious A
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: Currency Transaction Reporting —
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 and 134: 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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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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