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

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Embassy and Foreign Consulate Accounts — Examination Procedures 7. On the basis of examination procedures completed, including transaction testing, form a conclusion about the adequacy of policies, procedures, and processes associated with embassy and foreign consulate accounts. FFIEC BSA/AML Examination Manual 270 7/28/2006
Non-Bank Financial Institutions — Overview Non-Bank Financial Institutions — Overview Objective. Assess the adequacy of the bank’s systems to manage the risks associated with accounts of non-bank financial institutions (NBFIs), and management’s ability to implement effective monitoring and reporting systems. NBFIs are broadly defined as institutions that offer financial services. The Patriot Act has defined a variety of entities as financial institutions. 216 Common examples of NBFIs include, but are not limited to: • Casinos and card clubs. • Securities and commodities firms (e.g., brokers/dealers, investment advisers, mutual funds, hedge funds, or commodity traders). • Money services businesses (MSBs). 217 • Insurance companies. • Other financial institutions (e.g., dealers in precious metals, stones, or jewels; pawnbrokers; loan or finance companies). Some NBFIs are currently required to develop an AML program, comply with the reporting and recordkeeping requirements of the BSA, and report suspicious activity, as are banks. NBFIs typically require a bank account in order to operate. Although NBFIs maintain operating accounts at banks, the BSA does not require, and neither FinCEN nor the federal banking agencies expect, banks to serve as the de facto regulator of any NBFI industry or individual NBFI customer. Furthermore, while banks are expected to manage risk associated with all accounts, including NBFI accounts, banks will not be held responsible for their customers’ compliance with the BSA and other applicable federal and state laws and regulations. Guidance on Providing Banking Services to MSBs FinCEN and the federal banking agencies issued interpretive guidance on April 26, 2005, to clarify the BSA requirements and supervisory expectations as applied to accounts 216 Refer to Appendix D (“Statutory Definition of Financial Institution”) for guidance. 217 MSBs include five distinct types of financial services providers and the U.S. Postal Service: (1) currency dealers or exchangers; (2) check cashers; (3) issuers of traveler’s checks, money orders, or stored value; (4) sellers or redeemers of traveler’s checks, money orders, or stored value; and (5) money transmitters. There is a threshold requirement for businesses in the first four categories — a business that engages in such transactions will not be considered a MSB if it does not engage in such transactions in an amount greater than $1,000 for any person on any day in one or more transactions (31 CFR 103.11(uu)). FinCEN has issued guidance stating that certain businesses that cash their own checks do not meet the definition of a “check casher.” See FIN-2006-G005, “Frequently Asked Questions — Businesses Cashing Their Own Checks,” March 31, 2006, at www.fincen.gov. FFIEC BSA/AML Examination Manual 271 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
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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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Funds Transfers — Overview Funds
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Funds Transfers — Overview • Di
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Risk Mitigation Funds Transfers —
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Funds Transfers — Examination Pro
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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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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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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 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 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: Embassy and Foreign Consulate Accou
Page 277 and 278: Non-Bank Financial Institutions —
Page 279 and 280: 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
Page 287 and 288: Non-Governmental Organizations and
Page 289 and 290: Business Entities (Domestic and For
Page 297 and 298: Cash-Intensive Businesses — Overv
Page 299 and 300: Appendix A: BSA Laws and Regulation
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 323 and 324: Appendix G: Structuring Appendix G:
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Appendix H: Request Letter Items (C
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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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