The Federal Financial Institutions Examination Council (FFIEC) and the Financial Crimes Enforcement Network (FinCEN) has released a revised Bank Secrecy Act/Anti-Money Laundering Examination Manual for 2007.
The revised 405-page manual clarifies supervisory expectations since the July 2006 update and draws upon feedback from the banking industry and examination staff. The 2007 changes reflect the ongoing efforts by FinCEN to provide current and consistent guidance on risk-based policies, procedures, and processes for banking organisations to comply with the BSA and safeguard operations from money laundering and terrorist financing. Among the changes included in the 2007 version are extended sections and clarifications on:
• Customer due diligence – clarified regulatory expectations between lower-risk and higher-risk customers.
• Suspicious activity reporting – enhanced discussion of law enforcement inquiries and requests. Updated the section to include new guidance on maintaining accounts and supporting documentation.
• OFAC – revised and clarified guidance on screening responsibilities in connection with automated clearing house (ACH) transactions.
• Non-bank financial institutions – expanded the discussion on providing banking services to money services businesses.
• Money laundering and terrorist financing ‘red flags’ – expanded examples of red flags for trade finance, shell company activity, and other potentially suspicious customer activity.
The new manual follows US Treasury Secretary Henry Paulson’s recently announced initiative to ensure compliance obligations are treated in a manner that helps avoid expenditures not commensurate with actual risk. Any resulting changes in the BSA/AML examination process will be incorporated into future versions of the manual, which can be found at: www.ffiec.gov.