Bank Secrecy Act/Anti-Money Laundering 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 (2006).............................................................. 11 Examination Procedures (2006)............................................................................ 15 BSA/AML Risk Assessment — Overview (2006) ................................................... 18 Examination Procedures (2006)............................................................................ 27 BSA/AML Compliance Program — Overview (2006) ............................................ 28 Examination Procedures (2006)............................................................................ 34 Developing Conclusions and Finalizing the Examination — Overview (2006) ...... 40 Examination Procedures (2006)............................................................................ 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..................................................................... 56 Examination Procedures ....................................................................................... 59 Suspicious Activity Reporting — Overview (2006)................................................. 60 Examination Procedures ....................................................................................... 71 Currency Transaction Reporting — Overview......................................................... 76 Examination Procedures ....................................................................................... 78 Currency Transaction Reporting Exemptions — Overview..................................... 80 Examination Procedures ....................................................................................... 84 Information Sharing — Overview (2006)................................................................. 86 Examination Procedures ....................................................................................... 91 Purchase and Sale of Monetary Instruments Recordkeeping — Overview.............. 94 Examination Procedures ....................................................................................... 97 Funds Transfers Recordkeeping — Overview.......................................................... 98 Examination Procedures ..................................................................................... 104 Foreign Correspondent Account Recordkeeping and Due Diligence — Overview (2006)..................................................................................................... 105 Examination Procedures (2006).......................................................................... 113 Private Banking Due Diligence Program (Non-U.S. Persons) — Overview (2006)..................................................................................................... 118 Examination Procedures (2006).......................................................................... 123 Special Measures — Overview............................................................................... 126 Examination Procedures ..................................................................................... 129 Foreign Bank and Financial Accounts Reporting — Overview ............................ 130 Examination Procedures ..................................................................................... 131 International Transportation of Currency or Monetary Instruments Reporting — Overview................................................................................................................. 132 Examination Procedures ..................................................................................... 134 Office of Foreign Assets Control — Overview (2006) .......................................... 135 FFIEC BSA/AML Examination Manual i 7/28/2006
Table of Contents Examination Procedures (2006).......................................................................... 144 EXPANDED EXAMINATION OVERVIEW AND PROCEDURES FOR AN ENTERPRISE-WIDE COMPLIANCE PROGRAM AND OTHER STRUCTURES .... 147 Enterprise-Wide BSA/AML Compliance Program — Overview (2006)............... 147 Examination Procedures (2006).......................................................................... 151 Foreign Branches and Offices of U.S. Banks — Overview ................................... 154 Examination Procedures ..................................................................................... 158 Parallel Banking — Overview................................................................................ 160 Examination Procedures ..................................................................................... 161 EXPANDED EXAMINATION OVERVIEW AND PROCEDURES FOR PRODUCTS AND SERVICES.......................................................................................................... 163 Correspondent Accounts (Domestic) — Overview ............................................... 163 Examination Procedures ..................................................................................... 166 Correspondent Accounts (Foreign) — Overview................................................... 168 Examination Procedures ..................................................................................... 171 U.S. Dollar Drafts — Overview ............................................................................. 173 Examination Procedures ..................................................................................... 174 Payable Through Accounts — Overview ............................................................... 176 Examination Procedures ..................................................................................... 179 Pouch Activities — Overview ................................................................................ 182 Examination Procedures ..................................................................................... 184 Electronic Banking — Overview ........................................................................... 186 Examination Procedures ..................................................................................... 188 Funds Transfers — Overview................................................................................. 189 Examination Procedures ..................................................................................... 194 Automated Clearing House Transactions — Overview (2006).............................. 196 Examination Procedures (2006).......................................................................... 200 Electronic Cash — Overview (2006)...................................................................... 202 Examination Procedures ..................................................................................... 204 Third-Party Payment Processors — Overview....................................................... 205 Examination Procedures ..................................................................................... 207 Purchase and Sale of Monetary Instruments — Overview..................................... 208 Examination Procedures ..................................................................................... 209 Brokered Deposits — Overview............................................................................. 211 Examination Procedures ..................................................................................... 213 Privately Owned Automated Teller Machines — Overview.................................. 215 Examination Procedures ..................................................................................... 218 Nondeposit Investment Products — Overview....................................................... 220 Examination Procedures ..................................................................................... 225 Insurance — Overview (2006)................................................................................ 227 Examination Procedures ..................................................................................... 230 Concentration Accounts — Overview.................................................................... 232 Examination Procedures ..................................................................................... 234 Lending Activities — Overview............................................................................. 235 Examination Procedures ..................................................................................... 237 Trade Finance Activities — Overview (2006)........................................................ 238 FFIEC BSA/AML Examination Manual ii 7/28/2006
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: U.S. Treasury Introduction The BSA
Page 11 and 12: Introduction international narcotic
Page 13 and 14: Introduction Other legitimate sourc
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: BSA/AML Risk Assessment — Overvie
Page 27 and 28: • High Intensity Financial Crime
Page 29 and 30: Examiner Development of a BSA/AML R
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 41 and 42: BSA/AML Compliance Program — Exam
Page 43 and 44: Independent Testing BSA/AML Complia
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
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:
Page 73 and 74:
Page 75 and 76:
Suspicious Activity Reporting — E
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
CTR Backfiling Currency Transaction
Page 83 and 84:
Currency Transaction Reporting —
Page 85 and 86:
Annual Review Currency Transaction
Page 87 and 88:
Currency Transaction Reporting Exem
Page 89 and 90:
Currency Transaction Reporting Exem
Page 91 and 92:
Information Sharing — Overview wi
Page 93 and 94:
Information Sharing — Overview ap
Page 95 and 96:
Examination Procedures Information
Page 97 and 98:
Information Sharing — Examination
Page 99 and 100:
Contemporaneous Purchases Purchase
Page 101 and 102:
Purchase and Sale of Monetary Instr
Page 103 and 104:
Responsibilities of Originator’s
Page 105 and 106:
Funds Transfers Recordkeeping — O
Page 107 and 108:
Funds Transfers Recordkeeping — O
Page 109 and 110:
Foreign Correspondent Account Recor
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Private Banking Due Diligence Progr
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Special Measures — Overview minim
Page 133 and 134:
Examination Procedures Special Meas
Page 135 and 136:
Foreign Bank and Financial Accounts
Page 137 and 138:
International Transportation of Cur
Page 139 and 140:
Office of Foreign Assets Control
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Enterprise-Wide BSA/AML Compliance
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Foreign Branches and Offices of U.S
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Examination Procedures Parallel Ban
Page 167 and 168:
Correspondent Accounts (Domestic)
Page 169 and 170:
Correspondent Accounts (Domestic)
Page 171 and 172:
large currency transactions. Corres
Page 173 and 174:
Correspondent Accounts (Foreign)
Page 175 and 176:
Correspondent Accounts (Foreign)
Page 177 and 178:
U.S. Dollar Drafts — Overview U.S
Page 179 and 180:
U.S. Dollar Drafts — Examination
Page 181 and 182:
Payable Through Accounts — Overvi
Page 183 and 184:
Payable Through Accounts — Examin
Page 185 and 186:
Payable Through Accounts — Examin
Page 187 and 188:
Risk Mitigation Pouch Activities
Page 189 and 190:
Pouch Activities — Examination Pr
Page 191 and 192:
Electronic Banking — Overview lin
Page 193 and 194:
Funds Transfers — Overview Funds
Page 195 and 196:
Funds Transfers — Overview • Di
Page 197 and 198:
Risk Mitigation Funds Transfers —
Page 199 and 200:
Funds Transfers — Examination Pro
Page 201 and 202:
Automated Clearing House Transactio
Page 203 and 204:
Page 205 and 206:
Transaction Testing Automated Clear
Page 207 and 208:
Electronic Cash — Overview Using
Page 209 and 210:
Third-Party Payment Processors —
Page 211 and 212:
Third-Party Payment Processors —
Page 213 and 214:
Page 215 and 216:
Brokered Deposits — Overview Brok
Page 217 and 218:
Examination Procedures Brokered Dep
Page 219 and 220:
Privately Owned Automated Teller Ma
Page 221 and 222:
Privately Owned Automated Teller Ma
Page 223 and 224:
Privately Owned ATMs — Examinatio
Page 225 and 226:
Nondeposit Investment Products —
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Insurance — Overview Insurance
Page 233 and 234:
• The identification of high-risk
Page 235 and 236:
Insurance — Examination Procedure
Page 237 and 238:
Concentration Accounts — Overview
Page 239 and 240:
Lending Activities — Overview Len
Page 241 and 242:
Examination Procedures Lending Acti
Page 243 and 244:
Trade Finance Activities — Overvi
Page 245 and 246:
Trade Finance Activities — Overvi
Page 247 and 248:
Private Banking — Overview Privat
Page 249 and 250:
Private Banking — Overview allow
Page 251 and 252:
• The current source of funds for
Page 253 and 254:
Examination Procedures Private Bank
Page 255 and 256:
Trust and Asset Management Services
Page 257 and 258:
Page 259 and 260:
Page 261 and 262:
Nonresident Aliens and Foreign Indi
Page 263 and 264:
Page 265 and 266:
Politically Exposed Persons — Ove
Page 267 and 268:
Risk Factors Politically Exposed Pe
Page 269 and 270:
Politically Exposed Persons — Exa
Page 271 and 272:
Embassy and Foreign Consulate Accou
Page 273 and 274:
Embassy and Foreign Consulate Accou
Page 275 and 276:
Non-Bank Financial Institutions —
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Professional Service Providers —
Page 283 and 284:
Professional Service Providers —
Page 285 and 286:
Non-Governmental Organizations and
Page 287 and 288:
Non-Governmental Organizations and
Page 289 and 290:
Business Entities (Domestic and For
Page 291 and 292:
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Page 295 and 296:
Page 297 and 298:
Cash-Intensive Businesses — Overv
Page 299 and 300:
Appendix A: BSA Laws and Regulation
Page 301 and 302:
Page 303 and 304:
Page 305 and 306:
Appendix B: BSA/AML Directives Appe
Page 307 and 308:
Web Sites Appendix C: BSA/AML Refer
Page 309 and 310:
• Federal Register notices. • E
Page 311 and 312:
Appendix D: Statutory Definition of
Page 313 and 314:
Appendix E: International Organizat
Page 315 and 316:
Appendix F: Money Laundering and Te
Page 317 and 318:
Page 319 and 320:
Page 321 and 322:
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Appendix G: Structuring Appendix G:
Page 325 and 326:
Appendix H: Request Letter Items (C
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Page 333 and 334:
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Page 337 and 338:
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Page 341 and 342:
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Cash-Intensive Businesses Appendix
Page 345 and 346:
Appendix J: Quantity of Risk Matrix
Page 347 and 348:
Appendix J: Quantity of Risk Matrix
Page 349 and 350:
Appendix L: SAR Quality Guidance Ap
Page 351 and 352:
Appendix M: Quantity of Risk Matrix
Page 353 and 354:
Appendix N: Private Banking — Com
Page 355 and 356:
Appendix O: Examiner Tools for Tran
Page 357 and 358:
Appendix P: BSA Record Retention Re
Page 359 and 360:
• Name of purchaser. • Date of
Page 361 and 362:
Appendix P: BSA Record Retention Re
Page 363 and 364:
Acronym or abbreviation Full name A
Page 365 and 366:
Acronym or abbreviation Full name I
Page 367:
Acronym or abbreviation Full name R
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