Ever since the original Bank Secrecy Act (BSA) was passed in 1970, banks have been required to take certain measures to fight the scourge of money laundering. The BSA, of course, has been greatly expanded over the last 40+ years, especially with the advent of the USA Patriot Act of 2001, which followed the tragic events of September 11, 2001.
In addition to the BSA, there are regulations promulgated by the Office of Foreign Assets Control and numerous international bodies that have issued treaties, recommendations and guidance that banks should be aware of. These international bodies include the United Nations, the European Union, the Basel Committee, the Egmont Group, the Wolfsberg Group, the Organization of American States, the World Bank, the International Monetary Fund and the Financial Action Task Force (FATF), as well as the numerous subsidiary FATF-style bodies.
Banks must be constantly vigilant not only with regard to potential money laundering that might occur in their institutions, but also with regard to possible terrorist financing. Specifically, banks must have appropriate policies and procedures to fight money laundering and terrorist financing. In addition, banks must have adequate anti-money laundering and counter terrorist financing (AML/CFT) internal controls; AML/CFT staff; AML/CFT training; and AML/CFT audits.
Furthermore, banks must have comprehensive Customer Identification Programs designed to ensure that the banks are able to form a reasonable belief that they know and have verified the true identify of their customers. They must undertake a comprehensive risk analysis of the money laundering and terrorist financing risks posed by their customers, products and locations. This risk assessment must be performed by knowledgeable individuals and must be updated on a periodic basis.
There are, of course, many additional AML/CFT related requirements imposed on financial institutions, including record keeping and reporting requirements. With regard to the latter, financial institutions must have adequate programs and procedures to identify and report large currency transactions as well as unusual and suspicious transactions which necessitate the filing of appropriate Suspicious Activity Reports.
SRS (Smith Regulatory Strategies, LLC) can assist financial institutions of all sizes by:
- assessing their vulnerability to money laundering and terrorist financing
- determining the regulatory risks and possible issues of concern associated with AML/CFT requirements
- assisting in the development and establishment of essential risk management and mitigation AML/CFT programs that are consistent with industry standards and regulatory guidance and expectations
- working with clients to develop detailed Action Plans that are targeted to addressing identified shortcomings in current systems and approaches
- assisting in all the aspects associated with the effective and timely implementation of those Action Plans, such as the monitoring of Action Plan progress, reporting to management, regulators and other stakeholders and conducting verification processes to ensure that corrective actions have taken place
- structuring and providing training associated with the implementation of AML/CFT policies and processes in order to comply with regulatory requirements
- assisting in the design and implementation of organization structures
- providing insight into qualifications associated with staffing levels and needed expertise
- serving as a subject matter expert (SME) in AML/CFT matters, including examination and supervisory policy and guidelines
- providing guidance with regard to dealing with supervisory enforcement actions and the associated regulatory expectations
- giving insights into developments pertaining to proposed AML/CFT regulations
- assisting in formulating strategic direction, programs and more tailored actions in response to new regulations, as well as ongoing developments in examination approaches
The SRS Team has diverse regulatory experience, skills and perspective that are consistent with the effective delivery of the capabilities that are described above.