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The Financial Crimes Enforcement Network is issuing this advisory to U.S. financial institutions so that they may guard against threats of illicit Iranian activity related to money laundering, terrorist financing and weapons of mass destruction proliferation financing. The Financial Action Task Force (FATF) has recently determined that Iran’s lack of a comprehensive anti-money laundering and combating the financing of terrorism (AML/CFT) regime represents a significant vulnerability within the international financial system.
The Financial Crimes Enforcement Network ("FinCEN") has noticed common errors in the filing of Suspicious Activity Reports ("SARs"). Although these errors were noted primarily through studying Suspicious Activity Reports by Money Services Business (Form 109) filings, we believe that publishing an explanation of ten of the most common errors and ways much of them readily can be mitigated could be informative to financial institutions in other industries in their efforts
The MSB Registration List, which is updated and posted on a monthly basis, contains entities that have registered as Money Services Businesses (MSBs) pursuant to the Financial Crimes Enforcement Network’s (FinCEN’s) Bank Secrecy Act regulations at 31 CFR 103.41. In accordance with FinCEN Guidance (FIN-2006-G006) on Registration and De-Registration of Money Services Businesses
The Federal Financial Institutions Examination Council (FFIEC) today released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The revised manual reflects the ongoing commitment of the federal and state banking agencies and the Financial Crimes Enforcement Network (FinCEN) to provide current and consistent guidance on riskbased policies, procedures, and processes for banking organizations to comply with the BSA and safeguard operations from money laundering and terrorist financing. The 2007 version further clarifies supervisory expectations since the July 28, 2006, update. The revisions again draw upon feedback from the banking industry and examination staff.
p>James H. Freis, Jr., Director of the Financial Crimes Enforcement Network (FinCEN), today issued the following statement about the federal financial regulatory agencies’ Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements. “Today’s statement by the agencies is another positive step with respect to clarity and consistency in the implementation of the Bank Secrecy Act. It complements our joint efforts to make the BSA regulatory framework even more efficient for the regulated industries and still more effective for analytical and law enforcement purposes. We share a commitment to initiatives of this kind, as outlined by Secretary Paulson last month.”
The federal financial regulatory agencies on Thursday issued a statement setting forth the agencies’ policy for enforcing specific anti-money laundering requirements of the Bank Secrecy Act (BSA). The purpose of the Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements is to provide greater consistency among the agencies in enforcement decisions in BSA matters and to offer insight into the considerations that form the basis of those decisions. The applicable statutes provide that if a regulated institution fails to establish and maintain a BSA compliance program or fails to correct a previously identified problem with its BSA compliance program, the appropriate agency shall issue a formal cease and desist order. The statement, which reflects the agencies’ current practices on enforcement with respect to BSA compliance, describes the circumstances under which the agencies will issue a cease and desist order in compliance with these statutory provisions. The statement also makes clear that the agencies may take formal or informal enforcement actions to address other concerns related to BSA or anti-money laundering, depending on the facts. The statement complements the Bank Secrecy Act/Anti-Money Laundering Examination Manual, which was similarly designed to foster interagency consistency and transparency regarding the BSA examination process.
The Financial Crimes Enforcement Network (FinCEN) has created a new page on its public website entitled Regulatory Efficiency and Effectiveness Initiative with the purpose of providing information to the public, on a regular basis, about its work to administer and implement a Bank Secrecy Act regulatory environment that is both efficient for the regulated industries and effective for law enforcement, analytical, and regulatory purposes.
National Credit Union Administration (NCUA) Chairman JoAnn Johnson today emphasized NCUA’s proactivity and interest in working closely with the U.S. Department of Treasury to help credit unions improve Bank Secrecy Act rules and requirements for credit unions and other financial service providers.
The Financial Crimes Enforcement Network (FinCEN) has updated two Bank Secrecy Act guidance. Financial institutions are recommended to read these guidance for the latest information on maintaining accounts and Suspicious Activity Report (SAR) supporting documentation.
The Financial Crimes Enforcement Network (FinCEN) has issued the eleventh edition (May 2007) of The SAR Activity Review - Trends, Tips & Issues.
James. H. Freis, Jr., Director of the Financial Crimes Enforcement Network, hosted the 27th plenary of the Bank Secrecy Act Advisory Group (BSAAG) on Wednesday. At the meeting, his first since becoming FinCEN’s Director in April, Director Freis pledged to work closely with all BSAAG members to ensure that the Bank Secrecy Act (BSA) is being administered in the most effective and efficient way. The BSAAG is comprised of high-level representatives from financial institutions, federal law enforcement agencies, regulatory authorities, and others from the private and public sectors. "The Bank Secrecy Act Advisory Group is a model of public-private sector partnership in which its participants can engage in open dialogue about the issues facing them related to the protection of the U.S. financial system from money laundering, terrorist financing, and other abuse," said Director Freis. "The plenary gathering is extremely important
FinCEN has issued a SAR Activity Review report for financial institutions to use. Click to read the ”“SAR Activity Review: Trends, Tips and Issues Update.”
More than 2,000 members of the credit union industry participated Tuesday in the first-ever web-based seminar hosted jointly by the National Credit Union Administration (NCUA) and the Financial Crimes Enforcement Network (FinCEN). Entitled “BSA: A Year in Review and Setting the Table for 2007,” the free seminar, known as a Webinar, provided information and guidance to credit unions about their Bank Secrecy Act (BSA) obligations. The interactive format of the Webinar allowed members of the viewing audience to ask questions that were then answered by a panel of NCUA and FinCEN officials. The panel, which included JoAnn Johnson, NCUA Chairman, and Jamal El-Hindi, Associate Director of FinCEN’s Regulatory Policy and Programs Division, discussed topics that included NCUA’s BSA examination program; top BSA compliance issues; recent regulatory changes; how to prepare for a BSA compliance review; and FinCEN’s role as BSA administrator.
The Financial Crimes Enforcement Network (FinCEN) has issued the seventh edition (November 2006) of The SAR Activity Review By the Numbers. Highlights: - FinCEN has issued the seventh edition of The SAR Activity Review By the Numbers. The report is a compilation of numerical data gathered from Suspicious Activity Reports (SARs) filed by depository institutions, certain money services businesses, casinos and card clubs, and by certain segments of the securities and futures industries.
The National Credit Union Administration and the Financial Crimes Enforcement Network today announced that they will jointly host a seminar over the web "BSA: A Year in Review and Setting the Table for 2007." The seminar, known as a webinar, will take place on Tuesday, February 6, 2007 and will be co-hosted by JoAnn Johnson, Chairman of the National Credit Union Administration (NCUA), and Jamal El-Hindi, Associate Director of the Regulatory Policy and Programs Division at the Financial Crimes Enforcement Network (FinCEN).
Why GAO Did This Study
This Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act (BSA) /Anti-Money Laundering (AML) Examination Manual provides guidance to examiners for carrying out BSA/AML and Office of Foreign Assets Control (OFAC) examinations. An effective BSA/AML compliance program requires sound risk management; therefore, the manual also provides guidance on identifying and controlling risks associated with money laundering and terrorist financing. The manual contains an overview of BSA/AML compliance program requirements, BSA/AML risks and risk management expectations, industry sound practices, and examination procedures. The development of this manual was a collaborative effort of the federal banking agencies1 and the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, to ensure consistency in the application of the BSA/AML requirements. In addition, OFAC assisted in the development of the sections of the manual that relate to OFAC reviews. Refer to Appendices A ("BSA Laws and Regulations"), B ("BSA/AML Directives"), and C ("BSA/AML References") for guidance.
This Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act (BSA) /Anti-Money Laundering (AML) Examination Manual provides guidance to examiners for carrying out BSA/AML and Office of Foreign Assets Control (OFAC) examinations. An effective BSA/AML compliance program requires sound risk management; therefore, the manual also provides guidance on identifying and controlling risks associated with money laundering and terrorist financing. The manual contains an overview of BSA/AML compliance program requirements, BSA/AML risks and risk management expectations, industry sound practices, and examination procedures. The development of this manual was a collaborative effort of the federal banking agencies1 and the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, to ensure consistency in the application of the BSA/AML requirements. In addition, OFAC assisted in the development of the sections of the manual that relate to OFAC reviews. Refer to Appendices A ("BSA Laws and Regulations"), B ("BSA/AML Directives"), and C ("BSA/AML References") for guidance.
Objective: Assess the organization's enterprise-wide program for BSA/AML compliance through the holding company or lead financial institution. Similar to the approach to consolidated credit, market, and operational risk, effective control of BSA/AML risk may call for coordinated risk management. An enterprise-wide BSA/AML compliance program coordinates the specific regulatory requirements throughout an organization inside a larger risk management framework. Such frameworks seek a consolidated understanding of the organization's risk exposure to money laundering and terrorist financing across all activities, business lines, or legal entities. For example, the holding company or lead financial institution may have a centralized function to evaluate BSA/AML risk; this may include the ability to understand world-wide exposure to a given customer, particularly those considered high¬risk or suspicious, consistent with applicable laws. Many organizations, typically those that are larger or more complex and that may include international operations, implement an enterprise-wide BSA/AML compliance program that manages risks in an integrated fashion across affiliates, business lines, and risk types (e.g., reputation, compliance, or transaction). Some larger or more complex organizations may decide to manage their risks by developing enterprise-wide approaches to their BSA/AML compliance program. Such programs manage risk at both operational and strategic levels.
The following is a list of the appendices from the Bank Secrecy Act/Anti-Money Laundering Examination Manual. > Read the entire appendicies here - PDF Appendix A: BSA Laws and Regulations (2006)
The Federal Financial Institutions Examination Council (FFIEC) today released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual (manual). The revised manual reflects the ongoing commitment of the federal banking agencies and the Financial Crimes Enforcement Network (FinCEN) to provide current and consistent guidance on risk-based policies, procedures, and processes for banking organizations to comply with the BSA and safeguard operations from money laundering and terrorist financing. The manual has been updated to further clarify supervisory expectations and incorporate regulatory changes since the manual's 2005 release. The revisions also draw upon feedback from the banking industry and examination staff.
FinCEN's primary function is to support and strengthen domestic and international anti-money laundering efforts through coordination and partnerships. Since its creation in 1990, FinCEN has been responsible for overseeing the management, processing, storage and dissemination of Bank Secrecy Act (BSA) data. In 2004, FinCEN embarked on a major initiative intended to improve the sharing of information reported under the Bank Secrecy Act. BSA Direct is an umbrella project intended to provide secure, user-friendly, web-based tools for accessing, analyzing, and filing BSA data. It is part of a broad effort to reengineer data management responsibilities and transition them from the IRS. During the early spring of 2006, it became clear to FinCEN that the Retrieval and Sharing component of the BSA Direct project (BSA Direct R&S) was not going to meet the critical implementation deadline of June 30, 2006. Objectives Because FinCEN has experienced problems with development and implementation of the BSA Direct R&S, you asked us about the project's current status and to provide observations on FinCEN's IT investment management practices. Our objectives were to (1) describe BSA Direct R&S and the project's current status; (2) examine FinCEN's application of information technology (IT) investment management processes to the BSA Direct R&S project; and (3) describe, at a high level, the range of options FinCEN may consider as it reexamines the BSA Direct R&S project.
Please note that the following rule is the version that was approved by the NCUA Board. The official version is published in the Federal Register approximately one week after Board approval. There may be some minor numbering or format differences between the two versions. The proposed rule describes in greater detail the requirements for reporting and filing a Suspicious Activity Report (SAR) and addresses prompt notification of the board of directors of SAR filings, the confidentiality of reports, and liability protection. NCUA also proposes to change the heading for this part so it more accurately describes its scope. While retaining cross-references in the rule to the SAR form and instructions, these changes will enhance credit union compliance by providing greater detail in the rule on the thresholds and procedures for filing a SAR.
Summary: We are issuing this advance notice of proposed rulemaking ("Advance Notice") as part of our ongoing effort to address, in the context of the Bank Secrecy Act, the issue of access to banking services by money services businesses. Both the banking industry and the money services business industry have expressed concerns with regard to the impact of Bank Secrecy Act regulations on the ability of money services businesses to open and maintain accounts and obtain other banking services at banks and other depository institutions. Due to the concerns about the effect of regulatory requirements on the provision of banking services to money services businesses, we, through the Non-bank Financial Institutions and the Examinations subcommittees of the Bank Secrecy Act Advisory Group, held a fact-finding meeting on March 8, 2005, to hear directly from banks, other depository institutions, and money services businesses concerning the challenges that they face on this issue.
The Financial Crimes Enforcement Network today announced it is issuing a survey to banking and financial services industry trade groups seeking information about the feasibility and impact of implementing a cross-border wire transfer reporting requirement under the Bank Secrecy Act. The survey, which is required by the Intelligence Reform and Prevention Act of 2004, is part of an ongoing study into the feasibility of imposing a requirement that financial institutions to report to FinCEN records that they currently maintain concerning international wire transfers. The survey, which is required by the Intelligence Reform and Prevention Act of 2004, is part of an ongoing study into the feasibility of imposing a requirement that financial institutions report to FinCEN records that they currently maintain concerning international wire transfers. The American Bankers Association, the Institute of International Bankers, the Credit Union National Association, the Independent Community Bankers of America and representatives of major money wire services are assisting in this effort by distributing this survey to their membership.
The Federal Reserve Board on Wednesday announced its approval of a final rule to amend Regulation K to require Edge and Agreement corporations and U.S. branches, agencies, and other offices of foreign banks supervised by the Board to establish and maintain procedures reasonably designed to ensure and monitor compliance with the Bank Secrecy Act and related regulations. The Board will publish its final rule in the Federal Register shortly, and the rule will become effective 30 days after publication. The Bank Secrecy Act generally requires a financial institution doing business in the United States to keep records and make reports that have a high degree of usefulness in criminal, tax, or regulatory proceedings. Domestic financial institutions, such as state member banks subject to the Board's Regulation H, already have been required to establish and maintain programs to ensure and monitor compliance with the Bank Secrecy Act. The Board's final rule amends Regulation K to require Edge and Agreement corporations and U.S. branches, agencies, and other offices of foreign banks to implement and maintain similar compliance programs.
The purpose of the Suspicious Activity Report (SAR) is to report known or suspected violations of law or suspicious activity observed by financial institutions subject to the regulations of the Bank Secrecy Act (BSA). In many instances, SARs have been instrumental in enabling law enforcement to initiate or supplement major money laundering or terrorist financing investigations and other criminal cases. Information provided in SAR forms also presents the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) with a method of identifying emerging trends and patterns associated with financial crimes. The information about those trends and patterns is vital to law enforcement agencies and provides valuable feedback to financial institutions. Financial institutions are required to submit SAR forms that are complete, sufficient and timely filed. Unfortunately, some financial institutions file SAR forms that contain incomplete, incorrect, and/or disorganized narratives, making further analysis difficult, if not impossible. Some SAR forms are submitted with blank narratives. The failure to adequately describe the factors making the transaction or activity suspicious undermines the very purpose of the SAR and lessens its usefulness to law enforcement. Because the SAR narrative serves as the only free text area for summarizing suspicious activity, it is essential that financial institutions’ staff write narratives that are clear, concise, and thorough.
This guidance concerns Bank Secrecy Act requirements under current regulations for the initial registration, and registration renewal, of money services businesses. It also describes policies regarding de-registration and ceasing to be a money services business. Concurrent with the issuance of this guidance, the Financial Crimes Enforcement Network is undertaking a broader review of the regulatory framework for money services businesses. This review likely will result in further changes and additional regulatory guidance being issued, as appropriate. In the meantime, pending review of the registration regulations, the following guidance is offered to provide clarity concerning registration and de-registration of money services businesses.
Financial Crimes Enforcement Network
The Federal Reserve Board on Monday announced amendments to Appendix A of Regulation CC that reflect the restructuring of the Federal Reserves check processing operations in the Twelfth District. These amendments are part of a series of amendments to Appendix A that will take place through the first quarter of 2006, associated with the previously-announced restructuring of the Reserve Banks check processing operations. Appendix A provides a routing number guide that helps depository institutions determine the maximum permissible hold periods for most deposited checks. As of October 22, 2005, the Portland branch office of the Federal Reserve Bank of San Francisco no longer will process checks, and banks currently served by that office will be reassigned to the Seattle branch office of the Federal Reserve Bank of San Francisco.
The Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) Examination InfoBase, which is located on the Federal Financial Institutions Examination Council's (FFIEC) Web site, has been updated. The InfoBase can be found at www.ffiec.gov/bsa_aml_infobase. Highlights: * On November 3, 2005, the FFIEC updated the BSA/AML Examination InfoBase, which is located on its Web site. * The InfoBase is an automated tool for examiners and the banking industry that provides information on the FFIEC BSA/AML Examination Manual, released on June 30, 2005. The InfoBase also helps examiners and the industry to more easily use and navigate the Manual.
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