Bank Secrecy Act/Anti-Money Laundering Examination Manual - ffiec

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Concentration Accounts — Overview Concentration Accounts — Overview Objective. Assess the adequacy of the bank’s systems to manage the risks associated with concentration accounts, and management’s ability to implement effective monitoring and reporting systems. Concentration accounts are internal accounts established to facilitate the processing and settlement of multiple or individual customer transactions within the bank, usually on the same day. These accounts may also be known as special-use, omnibus, suspense, settlement, intraday, sweep, or collection accounts. Concentration accounts are frequently used to facilitate transactions for private banking, trust and custody accounts, funds transfers, and international affiliates. Risk Factors Money laundering risk can arise in concentration accounts if the customer-identifying information, such as name, transaction amount, and account number, is separated from the financial transaction. If separation occurs, the audit trail is lost, and accounts may be misused or administered improperly. Banks that use concentration accounts should implement adequate policies, procedures, and processes covering the operation and recordkeeping for these accounts. Policies should establish guidelines to identify, measure, monitor, and control the risks. Risk Mitigation Because of the risks involved, management should be familiar with the nature of their customers’ business and with the transactions flowing through the bank’s concentration accounts. Additionally, the monitoring of concentration account transactions is necessary to identify and report unusual or suspicious transactions. Internal controls are necessary to ensure that processed transactions include the identifying customer information. Retaining complete information is crucial for compliance with regulatory requirements as well as ensuring adequate transaction monitoring. Adequate internal controls may include: • Maintaining a comprehensive system that identifies, bank-wide, the general ledger accounts used as concentration accounts, as well as the departments and individuals authorized to use those accounts. • Requiring dual signatures on general ledger tickets. • Prohibiting direct customer access to concentration accounts. • Capturing customer transactions in the customer’s account statements. • Prohibiting customer’s knowledge of concentration accounts or their ability to direct employees to conduct transactions through the accounts. FFIEC BSA/AML Examination Manual 232 7/28/2006
Concentration Accounts — Overview • Retaining appropriate transaction and customer identifying information. • Frequent reconciling of the accounts by an individual who is independent from the transactions. • Establishing timely discrepancy resolution process. • Identifying recurring customer names. FFIEC BSA/AML Examination Manual 233 7/28/2006
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Bank Secrecy Act / Anti-Money Laund
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Table of Contents Examination Proce
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INTRODUCTION Introduction This Fede
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Background Introduction In 1970, Co
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U.S. Treasury Introduction The BSA
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Introduction international narcotic
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Introduction Other legitimate sourc
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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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BSA/AML Risk Assessment — Overvie
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• High Intensity Financial Crime
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Examiner Development of a BSA/AML R
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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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BSA/AML Compliance Program — Exam
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Independent Testing BSA/AML Complia
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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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Suspicious Activity Reporting — E
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CTR Backfiling Currency Transaction
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Currency Transaction Reporting —
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Annual Review Currency Transaction
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Currency Transaction Reporting Exem
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Currency Transaction Reporting Exem
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Information Sharing — Overview wi
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Information Sharing — Overview ap
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Examination Procedures Information
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Information Sharing — Examination
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Contemporaneous Purchases Purchase
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Purchase and Sale of Monetary Instr
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Responsibilities of Originator’s
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Funds Transfers Recordkeeping — O
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Funds Transfers Recordkeeping — O
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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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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 (Domestic)
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large currency transactions. Corres
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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
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: Automated Clearing House Transactio
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: Purchase and Sale of Monetary Instr
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 231 and 232: Insurance — Overview Insurance
Page 233 and 234: • The identification of high-risk
Page 235: Insurance — Examination Procedure
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 261 and 262: Nonresident Aliens and Foreign Indi
Page 263 and 264: Nonresident Aliens and Foreign Indi
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 281 and 282: Professional Service Providers —
Page 283 and 284: Professional Service Providers —
Page 285 and 286: 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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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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• Federal Register notices. • E
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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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Appendix G: Structuring Appendix G:
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Appendix H: Request Letter Items (C
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Purchase and Sale of Monetary Instr
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Automated Clearing House Transactio
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Nonresident Aliens and Foreign Indi
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Cash-Intensive Businesses Appendix
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Appendix J: Quantity of Risk Matrix
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Appendix J: Quantity of Risk Matrix
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Appendix L: SAR Quality Guidance Ap
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Appendix M: Quantity of Risk Matrix
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Appendix N: Private Banking — Com
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Appendix O: Examiner Tools for Tran
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Appendix P: BSA Record Retention Re
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• Name of purchaser. • Date of
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Appendix P: BSA Record Retention Re
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Acronym or abbreviation Full name A
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Acronym or abbreviation Full name I
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Acronym or abbreviation Full name R
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Bank Secrecy Act/Anti-Money Laundering Examination Manual - ffiec

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