Bank Secrecy Act Requirements

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					      Bank Secrecy Act Requirements

• Anti-money laundering program
• Customer identification program
• Reporting requirements
  –   Currency Transaction Report
  –   Suspicious Activity Report
  –   Designation of Exempt Person
  –   IRS/FinCEN Form 8300
  –   Registration of Money Service Businesses
  Civil Enforcement – Joint Actions
Civil enforcement actions for Bank Secrecy Act violations are
  conducted by FinCEN, usually in cooperation with other
  regulatory and/or law enforcement authorities
• Federal financial regulators: Comptroller of the Currency,
  Federal Deposit Insurance Corporation, Board of
  Governors of the Federal Reserve System, Office of Thrift
  Supervision, National Credit Union Administration
• Department of Justice, Law Enforcement Agencies
• State Authorities
Objectives of Civil Enforcement
Educate and guide financial industries
• Clarify the requirements of the BSA and its
  implementing regulations
• Ensure that filings of reports required by the
  BSA are timely, accurate and complete
Deter non-compliance with the BSA
Punish egregious offenders
     Civil Enforcement Remedies
•   Formal Warning
•   Caution
•   Injunction Action
•   Consent Decree
•   Civil Money Penalties
                    Bank Secrecy Act
                  Civil Money Penalties
Currency Transaction Reports - $25,000 to $100,000 per Violation
Suspicious Activity Reports - $25,000 to $100,000 per Violation
Report of Foreign Financial Accounts - $25,000 to $100,000 per violation
$10,000 by Trade or Business - $25,000 to $100,000 per violation
Compliance Program Violations - $25,000 @ Day
Record-keeping - $1,000 per Violation
Pattern of Negligence - $50,000
Negligence - $500 per violation
Structuring – Dollar Amount Involved in Transactions
International Counter Money Laundering Violations – Two times amount of
    transaction(s) up to $1,000,000
                             Money Service Businesses
Failure to Register - $5,000 @ Day
Reporting False or Materially Incomplete Information - $5,000 @ Day
Failure to Maintain Agent List - $5,000 @ Day
            Bank Secrecy Act
            Criminal Penalties
Generally:
• Five Years in Prison and/or $250,000

If Conducted to Facilitate Other Criminal Acts:
• Ten Years in Prison and/or $500,000
        Recent Bank Secrecy Act
       Enforcement Actions (2004)
AmSouth Bank (October 2004)
• Board of Governors of the Federal Reserve System, U.S. Attorney
• Anti-money laundering program and suspicious activity reporting violations, with a
  fragmented program in which areas of the bank had information on suspicious activity
  that was never communicated to those responsible for Bank Secrecy Act compliance
• $10 million civil money penalty
• Deferred prosecution, $40 million civil forfeiture (October 2004)

Riggs Bank, N.A. (May 2004)
• Comptroller of the Currency, U.S. Attorney
• Anti-money laundering program, suspicious activity reporting, and currency transaction
   reporting violations, involving accounts owned and controlled by Augusto Pinochet and
   the government of Equatorial Guinea
• $25 million civil money penalty
• Guilty plea to criminal violation of the Bank Secrecy Act (January 2005); $16 million
   fine, five year corporate probation (March 2005)
       Recent Bank Secrecy Act
      Enforcement Actions (2005)
The Federal Branch of Arab Bank plc (August 2005)
• Comptroller of the Currency
• Anti-money laundering program and suspicious transaction
  reporting violations, involving U.S. dollar clearing
  activities through correspondent banking relationships
• $24 million civil money penalty
• Conversion from a federal branch to a federal agency
  (February 2005)