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Complying with BSA and USA Patriot Act: A Guide to Avoiding Penalties and Fines

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Understanding the Requirements for Anti-Money Laundering Programs, Customer Due Diligence, and Suspicious Activity Reporting

As financial institutions, it is crucial to comply with the Bank Secrecy Act (BSA) and USA Patriot Act to prevent money laundering and terrorist financing. The Office of Foreign Assets Control (OFAC) and other government lists must be screened regularly to ensure that transactions are not being used to fund illegal activities.

What You Need to Know

  • Establish an effective BSA compliance program with internal controls, independent testing, and designated personnel responsible for monitoring day-to-day compliance.
  • Develop risk-based anti-money laundering programs to identify high-risk customers and transactions.
  • Implement customer due diligence systems and monitoring programs to verify customer identities and detect suspicious activity.
  • Report all cash transactions exceeding $10,000 daily and file reports of suspicious activity that may signal criminal activity.

AML/CTF Reporting Obligations

  • Currency Transaction Reports (CTRs): File electronic reports with FinCEN for cash transactions exceeding $10,000 in one business day. Retain copies for five years.
  • Suspicious Activity Reports (SARs): Report any suspicious transactions or activities that may indicate money laundering or other criminal activity. File with FinCEN and retain copies for five years.

Additional Requirements

  • Record cash purchases of negotiable instruments exceeding $3,000-$10,000 inclusive.
  • Obtain and record specific information for each money transfer of $3,000 or more.
  • Keep records of currency exchanges totalling more than $1,000 in either domestic or foreign currency.

How MemberCheck Can Help

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  • Politically exposed individuals
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  • Regulatory lists
  • Law enforcement lists
  • Other official lists

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Disclaimer

This article is intended as general information only and should not be relied upon as the sole source of information for your AML obligations. Please consult with local regulatory authorities for the latest relevant and full information.