Release Date: March 15, 2006
For immediate release
The Federal Reserve Board on Wednesday announced its approval of a final rule to amend Regulation K to require Edge and Agreement corporations and U.S. branches, agencies, and other offices of foreign banks supervised by the Board to establish and maintain procedures reasonably designed to ensure and monitor compliance with the Bank Secrecy Act and related regulations.
The Board will publish its final rule in the Federal Register shortly, and the rule will become effective 30 days after publication.
The Bank Secrecy Act generally requires a financial institution doing business in the United States to keep records and make reports that have a high degree of usefulness in criminal, tax, or regulatory proceedings. Domestic financial institutions, such as state member banks subject to the Board's Regulation H, already have been required to establish and maintain programs to ensure and monitor compliance with the Bank Secrecy Act. The Board's final rule amends Regulation K to require Edge and Agreement corporations and U.S. branches, agencies, and other offices of foreign banks to implement and maintain similar compliance programs.
The Board's final rule is consistent with regulations issued by the Department of the Treasury under section 352 of the USA PATRIOT Act, which requires all financial institutions to maintain effective anti-money-laundering programs. The Board believes that the final rule will not impose any material administrative burden for affected institutions because, in supervising these institutions to ensure safety and soundness, the Board has consistently expected such entities to maintain programs to ensure compliance with all applicable provisions of the Bank Secrecy Act.
The Board's final rule is attached.