Bank Secrecy Act (BSA) Background<br />Purpose: <br />To help identify the source, volume and movement of currency and oth...
Office of Foreign Assets Control  Background<br />The Office of Foreign Assets Control ("OFAC") of the US Department of th...
Office of Foreign Assets Control  Background<br />OFAC regulations require the following:<br />The Specially Designated Na...
Penalties for BSA Violations<br />
BSA/OFAC Program Evaluation <br />Examiners will determine if the credit union has an effective program.<br />Policies, pr...
Policy Provisions<br />Board of directors ultimately responsible for ensuring the credit union has an effective BSA/OFAC p...
Independent Testing<br />BSA/OFAC program needs to be independently reviewed by the internal audit department, outside aud...
Risk Assessments From FFIEC Manual Appendix I  <br />
Risk Assessment Considerations<br />The Federal Financial Institution Examination Council’s Bank Secrecy Act/ Anti-Money L...
New OFAC Risk Assessment Factors<br />Established in OFAC Enforcement Guidelines published on November 9, 2009 consider:<b...
New OFAC Risk Assessment Factors<br />Management<br />
New OFAC Risk Assessment Factors<br />Board of Directors<br />
New OFAC Risk Assessment Factors<br />Staffing Levels<br />
New OFAC Risk Assessment Factors<br />Training Program<br />
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BSA Summary And Ofac Risk Assessment Considerations Of Nov 2009 Pub Aug 2010

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The Bank Secrecy Act/ Anti-Money Laundering Examination Manual was updated earlier this year so BSA officers need to review the manual to ensure the Bank Secrecy Act/ Anti-Money Laundering &amp; OFAC program meet the regulatory expectations. OFAC has also issued Enforcement Guidelines published on November 9, 2009 which allow for civil money penalties for as much as $250,000 per violation or twice the amount of a transaction, whichever is greater. In addition new OFAC Risk Assessment considerations were provided with the Enforcement Guidelines which include: management’s assessment of OFAC risks; the adequacy of the OFAC Compliance Program approved by the Board of Directors; the adequacy of Staffing Levels to implement the OFAC Compliance Program; and the adequacy of the OFAC Training Program.

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BSA Summary And Ofac Risk Assessment Considerations Of Nov 2009 Pub Aug 2010

  1. 1. Bank Secrecy Act (BSA) Background<br />Purpose: <br />To help identify the source, volume and movement of currency and other monetary instruments transported or transmitted into or out of the U.S. or deposited into financial institutions. <br />To aid in the investigation of money laundering, tax evasion, international terrorism and other criminal activity. <br />
  2. 2. Office of Foreign Assets Control Background<br />The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals.<br />Regulatory requirements are separate and distinct from the BSA, but they share a common national security goal.<br />
  3. 3. Office of Foreign Assets Control Background<br />OFAC regulations require the following:<br />The Specially Designated Nationals List (SDN) be reviewed periodically to ensure that the CU’s is not processing transactions for countries, entities, or individuals on the list. <br />Report blocked and prohibited transactions to OFAC.<br />
  4. 4. Penalties for BSA Violations<br />
  5. 5. BSA/OFAC Program Evaluation <br />Examiners will determine if the credit union has an effective program.<br />Policies, procedures, internal controls, training, and audit process will be evaluated. <br />Programs must be written, approved by the board of directors annually, and noted in the board minutes.<br />BSA & OFAC Risk assessments may be completed by examiners if one is not available for review. <br />
  6. 6. Policy Provisions<br />Board of directors ultimately responsible for ensuring the credit union has an effective BSA/OFAC program.<br />Key policy considerations include (not all inclusive):<br />Periodically updating the risk assessment.<br />Informing board of compliance initiatives and deficiencies, actions taken and SARs filed.<br />Designate a BSA compliance officer.<br />Establishing a Member Identification Program.<br />Provide for timely updates in response to changes in regulations.<br />Establishment of an annual training program.<br />
  7. 7. Independent Testing<br />BSA/OFAC program needs to be independently reviewed by the internal audit department, outside auditors, or other qualified independent parties.<br />Report to the board.<br />Risk-based, covering all of the credit union’s activities.<br />Should, at a minimum, include the following:<br />An evaluation of the overall integrity and effectiveness of the BSA/AML compliance program, including policies, procedures and practices.<br />A review of the credit union’s risk assessment for reasonableness, given the credit union’s risk profile.<br />
  8. 8. Risk Assessments From FFIEC Manual Appendix I <br />
  9. 9. Risk Assessment Considerations<br />The Federal Financial Institution Examination Council’s Bank Secrecy Act/ Anti-Money Laundering Examination Manual provides guidance on risk assessments, with examples in:<br />Appendix J: Quantity of Risk Matrix <br />Appendix M: Quantity of Risk Matrix — OFAC Procedures <br />
  10. 10. New OFAC Risk Assessment Factors<br />Established in OFAC Enforcement Guidelines published on November 9, 2009 consider:<br />Management<br />Board of Directors<br />Staffing Levels<br />Training Program<br />The enforcement guidelines allow for civil money penalties for as much as $250,000 per violation or twice the amount of a transaction, whichever is greater.<br />
  11. 11. New OFAC Risk Assessment Factors<br />Management<br />
  12. 12. New OFAC Risk Assessment Factors<br />Board of Directors<br />
  13. 13. New OFAC Risk Assessment Factors<br />Staffing Levels<br />
  14. 14. New OFAC Risk Assessment Factors<br />Training Program<br />
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