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

BSA/AML Risk Assessment — Overview
• Electronic funds payment services — electronic cash (e.g., stored value and payroll
cards), funds transfers (domestic and international), payable upon proper
identification (PUPID) transactions, third-party payment processors, remittance
activity, automated clearing house (ACH) transactions, and automated teller machines
(ATMs).
• Electronic banking.
• Private banking (domestic and international).
• Trust and asset management services.
• Monetary instruments. 18
• Foreign correspondent accounts (e.g., pouch activity, payable through accounts
(PTAs), and U.S. dollar drafts).
• Trade finance (letters of credit).
• Special use or concentration accounts.
• Lending activities, particularly loans secured by cash collateral and marketable
securities.
• Nondeposit account services (e.g., nondeposit investment products and insurance).
The expanded sections of the manual provide guidance and discussion on specific
products and services detailed above.
Customers and Entities
Although any type of account is potentially vulnerable to money laundering or terrorist
financing, by the nature of their business, 19 occupation, or anticipated transaction
activity, certain customers and entities may pose specific risks. At this stage of the risk
assessment process, it is essential that banks exercise judgment and neither define nor
treat all members of a specific category of customer as posing the same level of risk. In
assessing customer risk, banks should consider other variables, such as services sought
and geographic locations. The expanded sections of the manual provide guidance and
discussion on specific customers and entities that are detailed below:
• Foreign financial institutions, including banks and foreign money services providers
(e.g., casas de cambio, currency exchanges, and money transmitters).
18 Monetary instruments in this context include official bank checks, cashier’s checks, money orders, and
traveler’s checks. Refer to the expanded overview section, “Purchase and Sale of Monetary Instruments,”
page 208, for further discussion on risk factors and risk mitigation regarding monetary instruments.
19 Banks may wish to use the North American Industry Classification System (NAICS) codes to assist in
classifying business customers by industry type. Refer to www.census.gov/epcd/www/naics.html for
additional information.
FFIEC BSA/AML Examination Manual 20 7/28/2006