On Aug. 11, 2014, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) issued FIN-2014-A007 (the "Advisory"). Among other things, the Advisory highlights the importance of maintaining a strong culture of Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) compliance for senior management, leadership and owners of all financial institutions1 – regardless of size or industry sector.
Citing shortcomings identified in recent AML enforcement actions, the Advisory restates certain general lessons gleaned from these actions that could be instructive to the leadership of all financial institutions required to comply with the BSA. In particular, the Advisory affirms that a financial institution (irrespective of its size and business model) can strengthen its BSA/AML compliance culture by ensuring all of the following:
The Advisory expands on these principles by providing more in-depth, practical issues and examples on how to effectively accomplish these objectives. In light of the expanded principles, it is important for financial institutions to consider how to incorporate the guidance outlined in the Advisory in a manner that is commensurate with its risk profile and business model.
Holland & Knight's Financial Services Team has extensive experience advising institutions on BSA, AML and Office of Foreign Assets Control (OFAC) issues raised by the Advisory, including best practices that enable the establishment and promotion of a "culture of compliance." If you have any questions regarding the Advisory and its implications, please contact the authors of this alert.
1 As defined in the BSA (31 U.S.C. §5312(a)(2)), the term "financial institution" includes banks, trust companies, U.S. agencies or branches of foreign banks, credit unions and thrift institutions; brokers or dealers in securities or commodities and investment companies; currency exchangers, issuers, redeemers, or cashiers of travelers checks, checks, money orders, or similar instruments; insurance companies; dealers in precious metals, stones, or jewels; pawnbrokers and loan or finance companies; money transmitters; and certain casinos or gaming establishments.
To ensure compliance with Treasury Regulations (31 CFR Part 10, §10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.
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