Sally Stubbs May 11 06

Meeting the AML Challenge: Protecting Our Clients and Our Business in Today’s Environment

AML Regulatory Requirements 

It’s the Law! 

The Bank Secrecy Act as amended by the International Money Laundering and Anti-Terrorism Financial Act of 2001 (Title III of The USA PATRIOT ACT) 

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Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism

Failure to comply could result in severe regulatory sanctions, possible criminal penalties and damage to the Company’s reputation

Recent Enforcement Actions and Penalties 

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Bank of New York - $38 million for failure to report suspicious activity and conduce adequate due diligence on customers ABN AMRO - $80 million for systemic defects in internal controls and failure to monitor transaction activity AmSouth Bank - $50 million for failure to detect suspicious activity and to file Suspicious Activity Reports in connection with a Ponzi scheme Riggs Bank - $43 million for failure to implement an AML program and to monitor foreign embassy account activity

BSA Compliance

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AML Program

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Customer Identification Program

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Customer Due Diligence (Risk Assessment)

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Suspicious activity monitoring and reporting

BSA Compliance - AML Program

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The BSA/AML compliance program includes the following elements: 

A system of internal controls to ensure ongoing compliance

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Independent testing of BSA/AML compliance

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Designated individual responsible for managing BSA compliance Training for appropriate personnel

BSA Compliance - CIP

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Customer Identification Program (“CIP”) 

Required Information – Name, Residential Address, Social Security Number, Date of Birth

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Verification/Fraud Check

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Comparison with Government Lists

BSA Compliance – Customer Due Diligence

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Customer Due Diligence 

Risk Assessment

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Enhanced Due Diligence for High-Risk Customers

BSA Compliance – Suspicious Activity 

Identification 

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Research 

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Transaction Monitoring Escalation Procedures

Reporting 

30 day deadline

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Confidential

Protecting our clients’ assets…

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From fraud: disbursement controls and other internal controls From identity thieves: Protection of personal information Maintaining a culture of compliance – training, continuing education.