Conducting Independent Reviews of Money Services Business Anti-Money Laundering Programs

Financial Crimes Enforcement Network (FinCEN) provides guidance on conducting independent reviews of money services business anti-money laundering programs. These reviews are crucial in ensuring that money services businesses have adequate programs in place to prevent and detect money laundering activities.

Key Requirements for Independent Reviews

• Money services businesses are not required to hire a certified public accountant or outside consultant for the review.
• Written policies and procedures must provide for an independent review to monitor and maintain an adequate program, as per the relevant Bank Secrecy Act regulation.
• The scope and frequency of the review should be commensurate with the risk of the financial services provided by the money services business.

Components of a Comprehensive Review

The review should include:

• Testing of internal controls and transactional systems and procedures to identify problems and weaknesses
• Determination of whether training occurred and was adequate, if required by the program
• Coverage of all anti-money laundering program actions taken by or defined as part of the responsibility of the designated compliance officer

Conducting Independent Reviews

A money services business does not necessarily need to hire an outside auditor or consultant for the review. The review may be conducted by:

• An officer, employee, or group of employees who are not the designated compliance officer and do not report directly to the compliance officer
• A third-party consultant or auditor, if desired

Frequency and Documentation of Reviews

The review should be conducted on a periodic basis, with the scope and frequency depending on the money services business’s risk assessment. If compliance problems are identified in a review, it may be advisable to advance the date of the next review to confirm that corrective actions have been taken.

Documentation of reviews should include:

• The scope of the review
• Procedures performed
• Transaction testing completed (if any)
• Findings of the review
• Recommendations to management for corrective actions (if any)
• All documentation should be made accessible to government examiners and law enforcement personnel who have authority to examine such documents.