BSA Update

What's hot in the Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) arena?

1.  When the USA PATRIOT Act Correspondent Account Rules don't apply:  FinCEN's Jan. 30, 2008 Guidance says that financial institutions don't have to worry about those rules if they process negotiable instruments drawn on foreign banks.  No matter how many checks drawn on a single foreign bank you (as a bank) may process for customers, that foreign bank is not your correspondent.  That is not a "formal relationship."

Good to know!  Here's the link:  http://www.fincen.gov/fin-2008-g001.html

2.  New Guidance about how to fill out a Currency Transaction Report (CTR) when there's a sole proprietor involved:  Previously, CTR instructions said to file two Section A's (Persons on whose behalf the  transaction is conducted) as if Multiple Persons are involved in the transaction.  This is still permissible, but the new instructions recognize that the individual is the sole proprietorship, calling for the completion of only one Section A which indicates the individual's name and places the sole proprietorship name in the DBA box.  Use the individual's address.

LInk to new CTR instructions:  http://www.fincen.gov/fin-2008-r001.html

3.  NOT A MONEY SERVICES BUSINESS (MSB): If a business cashes its own employees' payroll checks or cashes checks for customers and applies a portion of the check proceeds to obligations owed to the business it is not a "check casher" and is not required to register as an MSB with FinCEN.

Link to Letter Ruling:  http://www.fincen.gov/FIN-2007-R002.pdf

4.  We really mean it!  FinCEN assessed a $12 Million fine against Sigue Corporation and Sigue, LLC, money service businesses (MSBs) in San Fernando, California.  This civil money penalty was assessed pursuant to a consent order.  At the same time, the Justice Department hit Sigue with $15 Million forfeiture under a deferred prosecution agreement for failing to maintain an effective Anti-Money Laundering (AML) program.  FinCEN's $12 M is included in payment of $15M under the Justice Department forfeiture.

Link: http://www.fincen.gov/20080128.pdf

5.  The Federal Reserve Board and the Indiana Dept. of Financial Institutions announced Monday that they had entered into a Written Agreement with Salin Bank & Trust, Indianapolis, Indiana.  The Written Agreement requires Salin Bank & Trust to bring its BSA/AML Program up to standard.

Link:  http://www.federalreserve.gov/newsevents/press/enforcement/20080201a.htm

(ag) Feb. 5, 2008, in BSA/AML

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