Financial Crime World

Guidance on Model Risk Management for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

In an effort to enhance anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts, financial institutions are constantly seeking ways to improve their systems and models used for reporting suspicious activities. Guidance on model risk management (MRMG) has become crucial in ensuring that banks’ AML/CFT programs are robust and effective.

Frequently Asked Questions Regarding Suspicious Activity Reporting

In an effort to provide clarity on AML requirements, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has released a set of frequently asked questions (FAQs) regarding suspicious activity reporting. The FAQs aim to address common concerns and misconceptions about SAR filing, providing financial institutions with a better understanding of their obligations.

Guidance from International Organizations

Several international organizations, including the Basel Committee on Banking Supervision (BCBS), the Financial Action Task Force (FATF), and the Wolfsberg Group, have issued guidance on AML/CFT risk management. These guidelines provide valuable insights for financial institutions seeking to strengthen their AML/CFT programs.

Reporting Terrorist Activity

In addition to SAR filing, financial institutions are also expected to report suspicious transactions related to terrorist activity to law enforcement agencies. The FinCEN’s Financial Institutions Hotline is available 24/7 to receive such reports.

National Strategies and Risk Assessments

The US government has developed national strategies and risk assessments to combat illicit finance threats and risks identified in three national risk assessments. These documents provide valuable insights for financial institutions seeking to stay ahead of emerging AML/CFT threats.

Resources for Enhanced Awareness and Understanding

To further enhance awareness and understanding of AML/CFT requirements, various resources are available:

  • Videos
    • [Video 1]: “Understanding BSA/AML Requirements”
    • [Video 2]: “Regulatory Changes and Supervisory Focus Areas”
  • Webcasts
    • [Webcast 1]: “A Deep Dive into AML/CFT Compliance”
    • [Webcast 2]: “Best Practices for SAR Filing”
  • Teleconferences
    • [Teleconference 1]: “AML/CFT Regulatory Updates”
    • [Teleconference 2]: “Case Studies in Effective AML/CFT Program Management”

Conclusion

In conclusion, guidance on model risk management is critical in ensuring that banks’ AML/CFT programs are robust and effective. By staying informed about the latest guidelines and regulations, financial institutions can better navigate the complex landscape of AML/CFT compliance and contribute to a safer and more secure financial system.