BSA Flashcards
The BSA was designed to help identify the source, volume, and movement of currency and other monetary instruments transported or transmitted into or out of the United States or deposited in financial institutions. The statute sought to achieve that objective by requiring individuals, banks and other financial institutions to file currency transaction reports with the U.S. Department of the Treasury (U.S. Treasury), to properly identify persons conducting transactions and to maintain a paper trail by keeping appropriate records of financial transactions.
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This criminalized the financing of terrorism and augmented the existing BSA framework by strengthening customer identification procedures, prohibiting financial institutions from engaging in business with foreign shell banks, requiring financial institutions to have due diligence procedures—and, in some cases, enhanced due diligence procedures for foreign correspondent and private banking accounts—and improving information sharing between financial institutions and the U.S. government.
The Patriot Act
The Patriot Act expanded the AML program requirements to all financial institutions, increased the civil and criminal penalties for money laundering, •required federal banking agencies to consider a bank’s AML record when reviewing bank mergers, acquisitions and other applications for business combinations.
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The BSA Compliance Program The program must, at a minimum, include four elements
(1) a system of internal controls, (2) independent testing, (3) a designated individual who is responsible for day-to-day compliance and (4) training for appropriate personnel.
What is the criminal practice of processing ill-gotten gains, or “dirty” money, through a series of transactions; in this way the funds are “cleaned” so that they appear to be proceeds from legal activities?
Money Laundering
Three Steps of Money Laundering
1) Placement, 2) Layering, & 3) Integration
This stage is used to create the appearance of legality through additional transactions. These transactions further shield the criminal from a recorded connection to the funds by providing a plausible explanation for the source of the funds
Integration
Who is ultimately responsible for ensuring that the bank maintains an effective BSA/AML internal control structure, including suspicious activity monitoring and reporting?
The board of directors, acting through senior management
BSA provisions have been extended to cover not only traditional depository institutions, but what else?
non-bank financial institutions, including but not limited to money services businesses, casinos, brokers/dealers in securities and futures commission merchants.
BSA Criminal penalties may include fines ranging from?
$50,000 to $10 million and imprisonment from 10 to 30 years
Who is the delegated administrator of the BSA, issues regulations and interpretive guidance, provides outreach to regulated industries, supports the examination functions performed by federal banking agencies and pursues civil enforcement actions when warranted?
Financial Crimes Enforcement Network (FinCEN)
BSA civil penalties range from?
$11,000 to $1 million per violation
Who administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers and those engaged in activities related to the proliferation of weapons of mass destruction.
Office of Foreign Assets Control (OFAC)
What is the introduction of unlawful proceeds into the financial system without attracting the attention of financial institutions or law enforcement? Techniques include structuring currency deposits in amounts to evade reporting requirements or commingling currency deposits of legal and illegal enterprises.
Placement
What established requirements for recordkeeping and reporting by private individuals, banks and other financial institutions?
Bank Secrecy Act
