Supervision and Regulation Letters
Release of the Revised Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual
SUPERVISION AND REGULATION
|SUBJECT:||Release of the Revised Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual|
The Federal Financial Institutions Examination Council (FFIEC) issued today the 2010 Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The revised manual reflects the ongoing commitment of the federal and state banking agencies to provide current and consistent risk-based guidance for banking organizations to comply with the BSA and safeguard operations from money laundering and terrorist financing.1 The manual has been updated to further clarify supervisory expectations and incorporate regulatory changes since the manual’s 2007 revision
The FFIEC member agencies revised the manual in collaboration with the Financial Crimes Enforcement Network (FinCEN), which is the administrator of the BSA, and the Office of Foreign Assets Control (OFAC). FinCEN and OFAC collaborated on the revisions made to the sections of the manual that address compliance with the regulations and sanctions programs that FinCEN and OFAC administer and enforce.
The attached interagency statement outlines the significant revisions to the manual. These revisions include streamlined and reorganized examination procedures for assessing a bank’s BSA/AML compliance program; new guidance to examiners on how to determine the severity of a regulatory violation; a reworked section on BSA/AML compliance program structures; a new section on bulk currency shipments; a reorganized and updated section on suspicious activity reporting and monitoring; and updated discussions of Currency Transaction Report exemptions, international Automated Clearing House transactions, trade finance activities, cover payments, prepaid cards, electronic banking, and third-party payment processor customers.
As with prior versions of the FFIEC BSA/AML Examination Manual, the 2010 revised manual does not set new standards; instead, it is a compilation of existing regulatory requirements, supervisory expectations, and sound practices in the BSA/AML area. To foster consistency, the manual includes the examination procedures that will be used by each agency’s examiners and will be provided to state banking agencies. The manual underscores the importance of banking organizations effectively managing their BSA/AML risk (i.e., the risk of abuse by money launderers or terrorist financiers) by developing BSA/AML compliance programs tailored to their organizations’ risk profiles. Similarly, banking organizations are expected to establish risk-based programs to comply with OFAC requirements.
As in prior versions, the manual uses a “core” and “expanded“ format. The core sections include guidance and procedures for examination scoping and planning, reviewing the components of the BSA compliance program, determining compliance with other BSA/AML requirements, and reviewing policies and procedures to support compliance with the sanctions administered by OFAC. The expanded sections provide detailed guidance and procedures on specific lines of business, products, or entities that may present unique BSA/AML challenges and exposures for banks.
Federal Reserve examiners should begin using the examination procedures as set forth in the manual for all BSA/AML examinations beginning May 1, 2010. With today’s release, the 2007 FFIEC BSA/AML Examination Manual is retired.
Reserve Banks are asked to distribute this SR Letter to the domestic and foreign banking organizations supervised by the Federal Reserve in their districts, as well as to supervisory and examination staff. Questions concerning the FFIEC BSA/AML Examination Manual should be addressed to Timothy P. Leary, Senior Special Anti-Money Laundering Examiner, at (202) 452 2428, or Suzanne L. Williams, Manager, BSA/AML Risk Section, at (202) 452-3513.
Patrick M. Parkinson
- The five federal banking agencies that are members of the FFIEC are the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision. The State Liaison Committee, which includes representatives appointed by the Conference of State Bank Supervisors, the American Council of State Savings Supervisors, and the National Association of State Credit Union Supervisors, is also a member of the FFIEC.