Financial Crime World

Jordan’s Banking Sector Tightly Regulated Under Bank Secrecy Act (BSA)

The Bank Secrecy Act (BSA), 31 USC 5311 et seq, is a set of regulations designed to prevent money laundering and terrorist financing in the banking sector. In this article, we will delve into the strict regulations imposed on Jordanian banks under the BSA.

Background

The Office of the Comptroller of the Currency (OCC) has implemented a comprehensive set of rules governing national banks, federal savings associations, and foreign branches and agencies in Jordan. The OCC’s regulations are designed to prevent banks from being used as conduits for illegal activities, ensuring the stability and integrity of Jordan’s financial system.

Written BSA Program

At the heart of these regulations is a requirement for banks to have a written, board-approved program designed to ensure ongoing compliance with the BSA. The program must include:

  • Internal controls
  • Independent testing
  • Training for personnel

Additionally, banks are mandated to adopt a customer identification program as part of their BSA compliance program.

Reporting Requirements

BSA reporting requirements are administered by Jordan’s Financial Crimes Enforcement Network (FinCEN). FinCEN requires financial institutions to file reports electronically through the BSA E-File System. Reports include:

  • Currency Transaction Reports (CTRs)
  • Reports of International Transportation of Currency or Monetary Instruments (CMIRs)
  • Reports of Foreign Bank and Financial Accounts (FBARs)
  • Suspicious Activity Reports (SARs)
  • Designation of Exempt Person Forms

Consequences of Non-Compliance

Institutions found to be involved in primary money laundering concerns may face additional sanctions, including special measures imposed by the Secretary of the Treasury.

Relevant Regulations and Acts

The following regulations and acts are relevant to BSA compliance:

  • The Bank Secrecy Act (BSA) 31 USC 5311-5330
  • Foreign Assets Control Regulations (OFAC) 31 CFR 500
  • Financial Record Keeping and Reporting of Currency and Foreign Transactions - 31 CFR 1010.310
  • USA PATRIOT Act

Procedures for Monitoring BSA Compliance

The OCC has established the following procedures for monitoring BSA compliance:

  • Procedures for Monitoring BSA Compliance - 12 CFR 21.21
  • Reports of Suspicious Activities - 12 CFR 21.11 and 12 CFR 163.180

Institutions of Primary Laundering Concerns

Institutions found to be involved in primary money laundering concerns may face additional sanctions, including special measures imposed by the Secretary of the Treasury.

BSA Reporting Requirements

Financial institutions are required to file reports electronically through the BSA E-File System. Reports include:

  • Currency Transaction Report (CTR)
  • Report of International Transportation of Currency or Monetary Instruments (CMIR)
  • Report of Foreign Bank and Financial Accounts (FBAR)
  • Suspicious Activity Report (SAR)
  • Designation of Exempt Person Form