The Financial Crimes Enforcement Network (FinCEN) and the Internal Revenue Service (IRS) released today the MSB Bank Secrecy Act/Anti-Money Laundering. . The MSB Examination Manual is intended to offer guidance to BSA Examiners regarding Title 31 – Bank Secrecy Act examinations. less transactional testing during the examination. review of the Msb bsa/aMl risk assessment. Examination Manual: Backward | Table of Contents | Forward. Examination Procedures. BSA/AML Compliance Program—Overview. Examination Procedures. Developing Conclusions and Finalizing the Examination—Overview. Board of Trustees & Committees: Legislation: CSBS Testimony.
Admin Posts 1118 FinCEN announced the release of the Bank Secrecy Act/Anti-Money Laundering Examination Manual for Money Services Businesses. The manual is 153 pages in length and the format is similar to the FFIEC BSA/AML. . issued the Bank Secrecy Act/Anti-Money Laundering Examination Manual for. their BSA/AML Programs against the Manual. MSB internal audit departments and. on the BSA/AML examination manual for.
- MSB Examination Materials. Sample MSB Examination Manual Work Program (December 2008). (MSB por sus siglas en inglés).
- BSA/AML Examination Manual. 34. SightSpan MSB Services/MMA. Money services businesses (“MSBs”),1 including money transmitters important to the Service and the states, issued an examination manual for MSB examiners to.
- MSB Services; Bank Services; Products. MSB Compliance, Inc. is an Atlanta. Independent Reviews for community banks are according to the FFIEC BSA/AML Examination Guide’s core examination procedures.
- Examination Manual. banks are not expected to routinely review an MSB's BSA/AML program. MSB Risk Assessment. An effective risk assessment should be a composite of multiple factors, and depending upon the circumstances.
Online Manual - BSA Info. Base. Objective. Assess the adequacy of the bank's systems to manage the risks associated with accounts of nonbank financial institutions (NBFI), and management's ability to implement effective monitoring and reporting systems. NBFIs are broadly defined as institutions other than banks that offer financial services.
The USA PATRIOT Act has defined a variety of entities as financial institutions. Refer to Appendix D ("Statutory Definition of Financial Institution") for guidance. Common examples of NBFIs include, but are not limited to: Casinos and card clubs.
Securities and commodities firms (e. Money services businesses (MSB).
MSBs include five distinct types of financial services providers and the U. S. Postal Service: (1) dealers in foreign exchange ; (2) check cashers; (3) issuers or sellers of traveler's checks or money orders, ; (4) providers or sellers of prepaid access; and (5) money transmitters. Fin. CEN routinely publishes administrative letter rulings that address inquiries regarding whether persons who engage in certain specific business activities are MSBs.
Insurance companies. Loan or finance companies. Fed. Reg. 8. 14. 8 (February 1. Fin. CEN Guidance FIN- 2.
R0. 05, Compliance obligations of certain loan or finance company subsidiaries of Federally regulated banks and other financial institutions(August 1. AML and SAR regulations that are applicable to its parent financial institution and is subject to examination by the parent financial institution's Federal functional regulator, the loan or finance company is deemed to comply with Fin. CEN's regulation. Operators of credit card systems.
Other financial institutions (e. Some NBFIs are currently required to develop an AML program, comply with the reporting and recordkeeping requirements of the BSA, and report suspicious activity, as are banks. Refer to 3. 1 CFR Chapter X for specific regulatory requirements. NBFIs typically need access to banking services in order to operate. Although NBFIs maintain operating accounts at banks, the BSA does not require, and neither Fin. CEN nor the federal banking agencies expect, banks to serve as the de facto regulator of any NBFI industry or individual NBFI customer.
Furthermore, while banks are expected to manage risk associated with all accounts, including NBFI accounts, banks will not be held responsible for their customers’ compliance with the BSA and other applicable federal and state laws and regulations. Risk Factors NBFI industries are extremely diverse, ranging from large multi- national corporations to small, independent businesses that offer financial services only as an ancillary component to their primary business (e. The range of products and services offered, and the customer bases served by NBFIs, are equally diverse. As a result of this diversity, some NBFIs may be lower risk and some may be higher risk for money laundering. Banks that maintain account relationships with NBFIs may be exposed to a higher risk for potential money laundering activities because many NBFIs: Lack ongoing customer relationships and require minimal or no identification from customers.
Maintain limited or inconsistent recordkeeping on customers and transactions. Engage in frequent currency transactions. Are subject to varying levels of regulatory requirements and oversight. Can quickly change their product mix or location and quickly enter or exit an operation. Sometimes operate without proper registration or licensing. Risk Mitigation Banks that maintain account relationships with NBFIs should develop policies, procedures, and processes to: Identify NBFI relationships. Assess the potential risks posed by the NBFI relationships.
Conduct adequate and ongoing due diligence on the NBFI relationships when necessary. Ensure NBFI relationships are appropriately considered within the bank’s suspicious activity monitoring and reporting systems.
Risk Assessment Factors Banks should assess the risks posed by their NBFI customers and direct their resources most appropriately to those accounts that pose a more significant money laundering risk. The following factors may be used to help identify the relative risks within the NBFI portfolio. Nevertheless, management should weigh and evaluate each risk assessment factor to arrive at a risk determination for each customer and to prioritize oversight resources. Relevant risk factors include: Types of products and services offered by the NBFI.
Locations and markets served by the NBFI. Anticipated account activity. Purpose of the account. A bank’s due diligence should be commensurate with the level of risk of the NBFI customer identified through its risk assessment. If a bank’s risk assessment indicates potential for a heightened risk of money laundering or terrorist financing, it will be expected to conduct further due diligence in a manner commensurate with the heightened risk. Providing Banking Services to Money Services Businesses Fin.
CEN and the federal banking agencies issued interpretive guidance on April 2. BSA requirements and supervisory expectations as applied to accounts opened or maintained for MSBs. Refer to Interagency Interpretive Guidance on Providing Banking Services to Money Services Businesses Operating in the United States, April 2. With limited exceptions, many MSBs are subject to the full range of BSA regulatory requirements, including the anti- money laundering program rule, suspicious activity and currency transaction reporting rules, and various other identification and recordkeeping rules. Refer to 3. 1 CFR 1. MSBs to establish and maintain an anti- money laundering program); 3.
CFR 1. 02. 2. 3. 10 (requirement for MSBs to file Currency Transaction Reports); 3. CFR 1. 02. 2. 3. 20 (requirement for MSBs to file Suspicious Activity Reports, other than for check cashing); 3. CFR 1. 01. 0. 4. 15 (requirement for MSBs that sell monetary instruments for currency to verify the identity of the customer and create and maintain a record of each currency purchase between $3,0. CFR 1. 01. 0. 4. 10(e) and (f) (rules applicable to certain transmittals of funds); and 1. Existing Fin. CEN regulations require certain MSBs to register with Fin. CEN. 2. 83. Refer to 3. CFR 1. 02. 2. 3. 80.
All MSBs must register with Fin. CEN (whether or not licensed as an MSB by any state) except: a business that is an MSB solely because it serves as an agent of another MSB; a business that is an MSB solely as a seller of prepaid access, ; the U. S. Postal Service; and agencies of the United States, of any state, or of any political subdivision of any state.
A business that acts as an agent for a principal or principals engaged in MSB activities, and that does not on its own behalf perform any other services of a nature or value that would cause it to qualify as an MSB, is not required to register with Fin. CEN. Fin. CEN has issued guidance on MSB registration and de- registration. Refer to Registration and De- Registration of Money Services Businesses, FIN- 2. G0. 06, February 3, 2. Finally, many states have established supervisory requirements, often including the requirement that an MSB be licensed with the state(s) in which it is incorporated or does business. Fin. CEN defines MSBs as doing business in one or more of the following capacities: Dealer in foreign exchange. Check casher. Issuer or seller of traveler's checks or money orders.
Money transmitter. Provider of prepaid access. Seller of prepaid access. U. S. Postal Service. There is a threshold requirement for dealers in foreign exchange, check cashers and issuers or sellers of traveler's checks or money orders.
A business that engages in such transactions will not be considered an MSB if it does not engage in such transactions in an amount greater than $1,0. CFR 1. 01. 0. 1. 00(ff)). An entity that engages in money transmission in any amount is considered an MSB. Thresholds for providers and sellers of prepaid access are discussed below.
Prepaid Access. Fin. CEN's regulation for MSBs excluded certain prepaid access arrangements from the definition of prepaid programs. Providers and sellers of prepaid access will not be considered an MSB if they engage in prepaid arrangements excluded from the definition of a prepaid program under 3.
CFR 1. 01. 0. 1. 00(ff)(4)(iii). Frequently Asked Questions Final Rule- Definitions and Other Regulations Relating to Prepaid Access (1. The exclusions include arrangements that: Provide closed loop prepaid access to funds (i.
Provide prepaid access solely to funds provided by a government agency. Provide prepaid access to funds for pre- tax flexible spending for health and dependent care, or from Health Reimbursement Arrangements for health care expenses.
There are two types of prepaid access arrangements that have a qualified exclusion. Open loop prepaid access that does not exceed $1,0. Prepaid access to employment benefits, incentives, wages or salaries ("payroll"). These arrangements are not prepaid programs subject to BSA regulatory requirements unless they can: Be used internationally. Allow transfers of value from person to person within the arrangement, or Be reloaded from a non- depository source.
If any one of these features is part of the arrangement, it will be a covered prepaid program under 3. CFR 1. 01. 0. 1. 00. Administrators and Exchangers of Virtual Currency. Fin. CEN's regulations define currency as "the coin and paper money of the United States or of any other country that is designated as legal tender; and that circulates; and is customarily used and accepted as a medium of exchange in the country of issuance." In contrast, "virtual" currency is a medium of exchange that operates like a currency in some environments, but does not have legal tender status in any jurisdiction.
Virtual currency must be converted into U. S. dollars through the services of an administrator or exchanger prior to deposit into the banking system. An administrator or exchanger of virtual currency is an MSB under Fin.