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)
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
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
AML Program
Customer Identification Program
Customer Due Diligence (Risk Assessment)
Suspicious activity monitoring and reporting
BSA Compliance - AML Program
The BSA/AML compliance program includes the following elements:
A system of internal controls to ensure ongoing compliance
Independent testing of BSA/AML compliance
Designated individual responsible for managing BSA compliance Training for appropriate personnel
BSA Compliance - CIP
Customer Identification Program (“CIP”)
Required Information – Name, Residential Address, Social Security Number, Date of Birth
Verification/Fraud Check
Comparison with Government Lists
BSA Compliance – Customer Due Diligence
Customer Due Diligence
Risk Assessment
Enhanced Due Diligence for High-Risk Customers
BSA Compliance – Suspicious Activity
Identification
Research
Transaction Monitoring Escalation Procedures
Reporting
30 day deadline
Confidential
Protecting our clients’ assets…
From fraud: disbursement controls and other internal controls From identity thieves: Protection of personal information Maintaining a culture of compliance – training, continuing education.