BSA-AML Examiner School eBook

Bank Secrecy Act Assessment (Continued)

Back-up BSA Officer stated that management is currently reviewing the Risk Assessment. CEO committed to reviewing the BSA/AML/OFAC Risk Assessment and obtaining Board approval by December 2016.

INFORMATION SHARING Management has failed to meet the information sharing requirements of Section 314(a) of the USA PATRIOT Act. Between September 2015 and June 2016, 19 of the 27 FinCEN requests were either not verified or were verified several months after the due date. An apparent violation of Section 1010.520(b)(3)(i) of 31 CFR Chapter X is cited for failure to search records. Refer to the Violations of Laws and Regulations pages for further details. Management must ensure that there are at least two individuals designated as points of contact to receive notifications from FinCEN. The points of contact should download the files and conduct the necessary search of bank records to identify accounts or transactions of a named suspect. The points of contact must search bank records and report any positive matches to FinCEN within 14 days, unless otherwise specified in the information request. Requests are confidential and records should be maintained in a secure location. Management must retain documentation that all required searches were performed, including copies of the information request with a designated individual's sign-off that the records were checked, the date of the search, and the search results (e.g., positive or negative). For positive matches, copies of the form returned to FinCEN and the supporting documentation should be retained. Interim BSA Officer and back-up BSA Officer were designated as the two points of contact for FinCEN notifications as of June 2016. They have appropriately verified all requests within the required timeframes and retained the appropriate documentation that the verifications were performed since June 2016. PURCHASES AND SALES OF MONETARY INSTRUMENTS Recordkeeping procedures for sales of monetary instruments are unsatisfactory. Management has not maintained adequate documentation for sales of monetary instruments between $3,000 and $10,000. Management maintains a monetary instrument log to satisfy the recordkeeping requirements for monetary instruments purchased with cash; however, no records were maintained between January and July 2016. There was at least one instance where an official check was purchased with cash between $3,000 and $10,000 and no record was maintained to demonstrate verification of the purchaser's identity. Additionally, numerous official checks were purchased from funds in customer accounts, but it is unknown as to how many customers purchased official checks between $3,000 and $10,000 using currency that the customer first deposited into the account. These types of transactions are subject to the same recordkeeping requirements. An apparent violation of Section 1010.415(a) of 31 CFR Chapter X is cited due to inadequate recordkeeping procedures for the sale of a monetary instrument between $3,000 and $10,000. Refer to the Violations of Laws and Regulations pages for further details. Management should ensure that necessary employees receive training on the recordkeeping requirements for sales of monetary instruments. Management should ensure that appropriate documentation is obtained for purchases of monetary instruments and ensure that a periodic review is conducted for sales of monetary instruments to ensure that appropriate documentation is maintained. Interim BSA Officer stated that tellers received brief training regarding the monetary instrument log and the documentation requirements. Tellers were informed to consult with the head teller whenever an official

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