Bank Secrecy Act / Anti- Money Laundering
Requires that the financial institution implement a customer identification program and customer due diligence to provide a framework from which to identify, research, and report suspicious activity
- Requires adequate recordkeeping of purchase and sale of monetary instruments as well as of funds transfers, including identification of individuals involved
- Defines mandatory procedures for maintaining and performing with due diligence the recordkeeping of foreign correspondent accounts and the prohibition of foreign shell banking
- Sets standards for reporting foreign bank and financial accounts and international transportation of currency of monetary instruments
- Requires that financial institutions comply with the Office of Foreign Assets Control to impose control and freeze assets under U.S. jurisdiction, including domestic and foreign branches, agencies, and facilities, as well as overseas offices and subsidiaries
The Bank Secrecy Act / Anti- Money Laundering are standards set for banking and financial organizations by the Office of the Comptroller of the Currency (FFIEC) and the Financial Crimes Enforcement Network (FinCEN). The purpose of these standards is to provide a framework of policies to ensure compliance regarding reporting and recordkeeping by financial institutions based on the Bank Secrecy Act of 1970 and compliance with amendments of related material leading up to the Patriot Act of 2001. The BSA focus is on requiring financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 in daily aggregate amounts, and reporting suspicious activity that might signify money laundering, tax evasion, or other criminal activities. In addition, the Patriot Act sets out standards that strengthen the customer identification procedures, prohibit financial institutions from engaging in business with foreign shell banks, require financial institutions to perform with enhanced due diligence procedures for foreign correspondent and private banking accounts, and improve information sharing between financial institutions and the federal government.
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