Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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10/17/2005 FFIEC Exam Manual Sets Due Diligence Expectations for Bank Examinations

Is your institution prepared to determine the purpose or ideology of its charity clients, and to understand the ideologies of their donor and volunteer bases?  Are you familiar with the charity’s affiliations with governments and other groups?  Will you be able to establish that your foreign branches comply with local anti-money laundering requirements and that those branch operations are consistent with the U.S. bank’s BSA/AML standards?  Are compliance personnel aware that U.S. examiners have criteria for considering whether examination work should be conducted in the host country of a foreign branch? Banks entering examinations by federal regulators may be surprised by some expectations of examiners concerning BSA/AML compliance. The recently issued FFIEC BSA/AML Examination Manual is more detailed than prior exam manuals issued by the banking regulators separately, particularly as to issues involving electronic operations, organizational structures, and relationships with other financial institutions.  Subscribers to Money Laundering, Terrorism and Financial Institutions will find that the Bank Compliance Checklist (updated at http://www.civicresearchinstitute.com/moneylaundering/checklists.html) has had to be increased from 119 to 159 pages to incorporate the new exam guidance. The new questions and issues will, for a time, be set in blue typeface so that those already using the compliance checklist may more easily see what has changed. Highlights of the Exam Manual will also be described in detail in the November and December issues of the Monitor.  

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