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

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12/09/2004 USA PATRIOT Act Monitor News Release: Interpretive Guidance for AML Programs of MSBs

FinCEN has posted interpretive guidance for money services businesses (soon to appear in the Federal Register), specifying AML program requirements for MSBs that use foreign agents and counterparties. Although the guidance reviews 31 CFR 103.125 (AML programs for MSBs), there are specifics in the guidance that should receive careful attention from covered institutions. The guidance notes that an MSB using foreign agents should have procedures for identifying material changes in an agent's risk profile, such as a change in ownership, business, or the regulatory scrutiny to which it is subject. A breakdown in a foreign agent's implementation of an effective anti-money laundering program should be detectable where "obvious." Transactional reviews should be able to identify suspicious activities involving wire activity, bulk sales or purchases of sequentially numbered instruments, multiple purchases or sales that appear to be structured, and illegible or missing customer information. The Interpretive Guidance will be discussed in detail in the January issue of the Monitor, and will be included in the forthcoming revision of Part II of Money Laundering, Terrorism and Financial Institutions.

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