Financial Crime World

Financial Institutions Must Comply with Anti-Money Laundering (AML) Requirements

In an effort to combat money laundering and terrorist financing, the United States government has established strict regulations for financial institutions to follow. These regulations require financial institutions to submit Suspicious Activity Reports (SARs) and implement a risk-based approach to customer due diligence.

Regulatory Requirements

  • Financial institutions must submit SARs
  • Implement a risk-based approach to customer due diligence

Joint Fact Sheet on Bank Secrecy Act Due Diligence Requirements for Charities and Nonprofit Organizations

The Financial Crimes Enforcement Network (FinCEN), in partnership with other government agencies, has released a joint fact sheet outlining the requirements for financial institutions providing services to charities and non-profit organizations. The fact sheet provides guidance on how to apply a risk-based approach to customer due diligence when dealing with these types of customers.

Key Takeaways

  • Financial institutions must apply a risk-based approach to customer due diligence
  • Provide guidance on how to identify and verify the identity of charity and nonprofit organization customers

Joint Statement on Due Diligence Requirements for Customers Who May Be Considered Politically Exposed Persons (PEPs)

The Financial Action Task Force (FATF) has released a joint statement with other government agencies emphasizing the importance of due diligence when dealing with customers who may be considered PEPs. The statement provides guidance on how to identify and verify the identity of these customers.

Key Points

  • Identify and verify the identity of PEP customers
  • Conduct enhanced due diligence for high-risk PEPs

Reporting Terrorist Activity

Financial institutions are required to report suspicious transactions related to terrorist activity to law enforcement using FinCEN’s Financial Institutions Hotline: 1-866-556-3974. The hotline operates seven days a week, 24 hours a day.

Reporting Requirements

  • Report suspicious transactions related to terrorist activity
  • Use FinCEN’s Financial Institutions Hotline: 1-866-556-3974

Additional Resources

  • Correspondent Banking Due Diligence Questionnaire: The Wolfsberg Group has released a correspondent banking due diligence questionnaire to facilitate completion of the correspondent banking questionnaire.
  • Guidance on Sound Management of Risks Related to Money Laundering and Terrorist Financing: The Basel Committee on Banking Supervision (BCBS) has published guidance on sound management of risks related to money laundering and terrorist financing.
  • Standards for Combating Money Laundering, Terrorist Financing, and Other Financial Crimes: The Financial Action Task Force (FATF) has developed standards for combating money laundering, terrorist financing, and other financial crimes.

Upcoming Events

  • Webinar on Anti-Money Laundering and Countering the Financing of Terrorism: A webinar will be held on [date] to provide an overview of BSA/AML and OFAC requirements.
  • Teleconference on Correspondent Banking Due Diligence: A teleconference will be held on [date] to provide guidance on how to complete the correspondent banking questionnaire.

By complying with these regulations and guidelines, financial institutions can help prevent money laundering and terrorist financing, and maintain a safe and secure financial system for all customers.