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Quickdinero Compliance Training Module 4
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Quickdinero Compliance Training Module 4


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  • 1. Module IV Legislation
  • 2.
    • The purpose of these laws is to
      • combat money laundering and other financial crimes such as theft, bribery, embezzlement, tax evasion, etc.
      • require businesses that deal in large sums of cash help the government track suspicious currency transactions.
      • Hold the criminal, the financial institution, and the employee responsible for willful violation of the law.
  • 3.
    • Congress has passed many laws, over time, to combat money laundering including the following:
      • Bank Secrecy Act of 1970 (P.L. 91-508)
        • Prevent tax evasion and provide tools to fight organized crime.
        • Verify the identity of customers and keep certain basic records of customer transactions, including cancelled checks and debits, signature cards, and statements of account.
        • Impose civil and criminal penalties for noncompliance with its reporting requirements.
        • Improve detection and investigation of criminal, tax, and regulatory violations
        • The BSA is enforced by the US Treasury Department, FinCEN
  • 4.
    • Money Laundering Control Act of 1986 (P.L. 99-570)
      • made money laundering a federal crime, creating three new criminal offenses for money laundering activities by, through, or to a financial institution. This includes:
        • Knowingly helping launder money derived from criminal activity.
        • Knowingly (including being willfully blind) engaging in a transaction of more than $10,000 that involves property or funds derived from criminal activity.
        • Structuring transactions to evade BSA reporting requirements.
  • 5.
    • Anti-Drug Abuse Act of 1988 (P.L. 100- 690)-reinforced anti-money laundering efforts in several ways
      • Significantly increases in civil and criminal penalties for money laundering and other BSA violations
      • Requires strict identification and recording of cash purchases of certain monetary instruments
      • Permits the Department of the Treasury to require certain financial institutions in specific geographic or "target" areas to file additional BSA reports of currency transactions in amounts less than $10,000 by use of "Geographic Targeting Orders.”
      • Directs the Department of the Treasury to negotiate bilateral international agreements covering the recording of large U.S. currency transactions and the sharing of such information.
  • 6.
    • 1988 Money Laundering Prosecution Act
      • Expanded the definition of monetary institution to include car dealers and others.
      • Required the verification of the identity of purchasers of monetary instruments over $3,000.
  • 7.
    • Annunzio-Wylie Anti-Money Laundering Act of 1992 (P.L. 102-550)
      • strengthened penalties for financial institutions found guilty of money laundering by giving the US Treasury the power to require financial institutions to report suspicious activities
  • 8.
    • Money Laundering Suppression Act (MLSA) of 1994 (P.L. 103-325)
      • Requires each MSB to be registered by an owner or controlling person of the MSB.
      • Requires every MSB to maintain a list of businesses authorized to act as agents in connection with the financial services offered by the MSB.
      • Makes operating an unregistered MSB a federal crime.
      • Recommended that states adopt uniform laws applicable to MSBs.
  • 9.
    • Money Laundering and Financial Crimes Strategy Act of 1998 (P.L. 105-310)
      • Requires the President to develop a national strategy for combating money laundering and related financial crimes and to submit such strategy each February 1st to Congress.
      • Requires the Secretary of the Treasury to designate certain areas—by geographical area, industry, sector or institution—as being vulnerable to money laundering and related financial crimes.
  • 10.
    • USA PATRIOT Act of 2001 (P.L. 107-56)-United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
    • This requires
      • Establishment of anti-money laundering compliance programs by all financial institutions.
      • Establishment of a confidential communication system between government and the financial services industry.
      • Implementation of customer identification procedures for new accounts.
      • Enhanced due diligence for correspondent and private banking accounts maintained for non-U.S. persons
      • Establishment of a highly secure network by FinCEN for electronic filing of BSA reports.
  • 11.
    • Civil Penalties
      • Range from the amount of the transaction up to $100,000 or $25,000 for willful violations by any …..
        • Partner
        • Director
        • Employee
      • Penalties can be up to $1,000 for each record keeping violation (records must be kept for 5 years).
    • These are maximum penalties for willful failure to comply.
    • Criminal Penalties
      • Record keeping violations
        • Up to $10,000 fine and / or five years imprisonment.
      • Willful violation of the BSA
        • Up to $500,000 and / or up to ten years imprisonment .
  • 12.
    • OFAC is the law enforcement agency that administers economic and trade sanctions against targeted countries, terrorists, international drug traffickers, and those engaged in the proliferation of weapons of mass destruction.
    • OFAC publishes:
      • A list of countries that American firms are prohibited from conducting business with.
      • A list of persons and entities whom are prohibited from transacting any business in America through American firms, or with American citizens.
    • Penalties for non-compliance have ranged from $11,000 all the way up to $1 million per transaction, and include possible criminal prosecution.
  • 13.
    • The US Treasury imposed sanctions against England in 1812 for the harassment of American sailors.
    • During the Civil War, sanctions were imposed on the Confederate states.
    • Nazi Germany’s assets were frozen during WWII as well as the countries they invaded.
    • Chinese and North Korean assets were blocked in 1950.
    • Cuba in 1962.
    • Drug Cartels in the 1970’s to the present.
    • Terrorists in 1990’s and post 9/11/2001.
    • Violators of human rights.
  • 14.
    • If the system your firm uses to check the OFAC list alerts you to a potential OFAC “hit”,
      • And advise the customer that the transaction cannot be completed.
      • Alert your supervisor and compliance officer.
      • The compliance officer will further qualify the alert, check the FAQs on FinCEN’s website and if necessary, call the OFAC Hotline (800-540-6322).