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Comprehensive Guide to Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)
Regulatory Framework
The United States has a robust regulatory framework governing AML/CFT, including:
- Bank Secrecy Act (BSA): Regulates financial institutions’ reporting requirements and customer due diligence.
- Financial Action Task Force (FATF): An international organization that sets global standards for combating money laundering and terrorism financing.
- Office of Foreign Assets Control (OFAC): Enforces economic sanctions and restrictions on transactions with sanctioned entities.
Supervisory Insights
Regulatory bodies assess financial institutions’ compliance with AML/CFT requirements through:
- Regular examinations
- Review of suspicious activity reports (SARs)
- Evaluation of anti-money laundering programs
Institutions are expected to maintain effective AML/CFT controls and procedures, including:
- Customer due diligence
- Transaction monitoring
- Reporting suspicious activities
Financial Crimes Enforcement Network (FinCEN)
FinCEN plays a crucial role in implementing the BSA and enforcing AML/CFT regulations. Its authority includes:
- Issuing regulations
- Conducting examinations
- Pursuing enforcement actions for violations
Financial institutions must comply with FinCEN’s requirements, including:
- Filing electronic Bank Secrecy Act (BSA) Forms
- Reporting suspicious transactions
National Strategies and Risk Assessments
The United States conducts national risk assessments to identify threats, vulnerabilities, and risks related to:
- Money laundering
- Terrorist financing
- Proliferation financing
These assessments inform the development of strategies to combat these threats.
Reporting Terrorist Activity
Financial institutions are encouraged to report suspicious transactions related to terrorist activity voluntarily using FinCEN’s Financial Institutions Hotline.
International Cooperation
The United States collaborates with international organizations, such as:
- The FATF
- The UNODC
to combat money laundering and terrorism financing globally.
Training Resources
Regulatory bodies provide various training resources for bank directors, officers, and employees on AML/CFT requirements and supervisory focus areas, including:
- Videos
- Webcasts
- Teleconferences