The USA PATRIOT Act, passed In October 2001, amended the Bank Secrecy Act (BSA) to require all businesses defined in the BSA as financial institutions to implement an anti-money laundering (AML) program. Many of these businesses had not been subject previously to BSA regulation. |
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The Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department bureau that administers the BSA, has deferred implementing AML program requirements for entities not previously treated as financial institutions for BSA regulatory purposes in order to have time to study these industries and to consider how anti-money laundering controls could best be applied to them. So far, the entities that are subject to AML program requirements include: banks and other depository institutions (such as credit unions); securities broker dealers; casinos; money services businesses; mutual funds; operators of credit card systems; dealers in precious metals, precious stones, and jewels; and the insurance industry.
In 2002, pursuant to Section 352 of the USA PATRIOT Act, FinCEN issued final regulations to require that all Money Services Businesses (MSBs) have an effective AML compliance program. This regulation (31 CFR 103.125) defines an effective program as one designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities. An MSB’s AML program must be commensurate with the risks posed by the location, size, nature and volume of the financial services provided by the MSB.
Each MSB’s AML compliance program must be in writing and must at a minimum:
- Incorporate policies, procedures and internal controls reasonably designed to assure compliance with BSA;
- Designate a compliance officer responsible for day-to-day compliance with the BSA and the AML program;
- Provide education and/or training of appropriate personnel concerning their responsibilities under the program, and
- Provide for independent review to monitor and maintain an adequate program.
It is not enough just to develop a written AML program; the AML program must be effectively implemented. A business that is an MSB solely because it is an agent of another MSB may share responsibility for development of its AML program. However, each MSB is solely responsible for implementation of its own AML program.
IRS examiners conduct BSA compliance examinations of MSBs and other retail businesses. These IRS examiners are looking at how effectively each business complies with BSA regulations and AML program requirements.
Your compliance with BSA regulations is intended to help ensure that your business will not be used by money launderers to further their criminal enterprises, or by those seeking to finance terrorism. Compliance can also help to protect you from charges of complicity in criminal activities and damage to your company’s reputation. There are civil and criminal penalties for non-compliance with BSA regulations
Our solutions help you comply and constantly monitor your compliance issues with the AML regulations.
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