AML Regulation Flashcards
What are the requirements of Section 314(a) of the Patriot Act?
1) Upon receipt of an info request from FinCEN, search records to determine whether the Bank maintains / maintained an account or engaged in a transaction with each individual, entity, or organization named in the request
2) Search only covers:
i) any current account maintained for a named suspect or during previous 12 months
ii) any transaction conducted by or on behalf of a named suspect / any transmittal of funds conducted in which a named suspect was either the transmitter or the recipient, during the previous 6 months, that is required to be recorded by the Bank
3) If an account or transaction is identified, report to FinCEN in the manner and time frame specified in FinCEN’ s request, including:
i) name of such individual, entity, or organization
ii) number of each account, or in the case of a transaction, the date and type of each transaction
iii) any SS#, TIN, passport number, DoB, address, or other identifying info provided by the individual, entity, or organization when each such account was opened / each such transaction conducted
Where are the regulations regarding Section 314(a) of the Patriot Act found?
31 C.F.R. § 1010.500 et seq.
What are the four pillars of a BSA-compliant AML program?
1) development of internal policies, procedures, and controls
2) designation of a compliance officer
3) ongoing employee training program
4) independent audit function to test programs
Which FinCEN SAR regulations are the FHLBs required to follow?
Unclear, as link in final rule is inaccessible
Are the FHLBs considered “financial institutions” under FinCEN’s regulations at 31 C.F.R. 1010.100?
No, the term “housing government sponsored enterprise” was added so as to not bring the FHLBs into certain recordkeepin and reporting requirements tha FinCEN does not consider appropriate for the housing GSEs at this time
What changes are there between the existing FHFA fraud reporting regulations and FinCEN’s SAR regulations?
The new SAR regulations will require the reporting of a potentailly broader range of financial crimes than under the FHFA’s regulations. This may result in the FHLBs filin more SARs than fraud reports under the FHFA’s regulations.
What are the requirements of an FHLB’s AML program?
The program must be in writing and must be approved by senior management; it must also be made available to FinCEN upon request.
What is required for policies, procedures, and controls?
The FHLB’s policies, procedures, and internal controls must be based upon the FHLB’s assessment of the risks of money laundering, terrorism finacce, and other financial crimes associated with its products counterparties, distribution channels, and geographic locations.
They must also be reasonably designed to ensure compliance with BSA requirements.
?
An FHLB’s assessment of counterparty-related information is a key component to an effective AML program.
What is not required by the AML final rule?
The AML program does not obligate the FHLBs to obtain information that they do not already receive in the ordinary course of business under current practices, esp with regard to info on indivdiual borrowers.
How can a third party be involved?
FHLBs may conduct some of their operations through third parties, but the FHLB remains fully responsible for the effectivenes of the program, as well as ensuring that examiners are able to obtain information and records relating to the AML program.
What are the requirements of a compliance officer?
The person should be competent & knowledgable regarding BSA requirements and money laundering & fraud issues and risks, and should be empwered w/full responsibility and authority to develop and enforce appropriate policies & procedures.
What is the role of the compliance officer?
To ensure that:
1) the program is implemented effectively
2) the program is updated as necessary; and
3) appropraite preson are trained & educated in accordance with 31 C.F.R. § 1030.210(b)(3).
Are there restrictions on how the independent audit function is supposed to function?
The review may be conducted by an outside consultant, or by an officer, employee, or group of employees, so long as the reviewer is not the designated compliance officer and does not report directly to the compliance officer.
Must all reportable transactions involve currency? What is the minimum amount to trigger a filing?
No. $5,000, although reporting of transactions that appear relevant to violations of law are encouraged, even in cases in which the transaction falls below the $5,000 threshold.
