BSA/AML Examiner Training Series 2

Federal Reserve - VIOLATION CODE QUICK REFERENCE GUIDE BSA / Financial Recordkeeping Version 1 (May 2023) Code Violation Description Code Violation Description BSA Compliance Program-12 CFR Part 208.63 Reg H CDD Rule / Beneficial Ownership - 31 CFR 80000 Failure to develop or implement adequate BSA Compliance Program 208.63(a) 77000 Failure to establish and maintain written procedures to identify and verify beneficial owners of legal entity customers 1010.230(a) 80001 Failure to have adequate written Board approved BSA Compliance Program 208.63(b)(1) 77001 Failure to identify beneficial owners of legal entity customers at account opening 1010.230(b)(1) 80002 Failure to implement a Customer Identification Program 208.63(b)(2) 77002 Failure to verify the identity of beneficial owners of legal entity customers 1010.230(b)(2) 80003 Inadequate system of internal controls for BSA compliance 208.63(c)(1) 78000 Failure to establish procedures to understand the nature and purpose of customer relationships 1020.210(a)(2)(v)(A) 80004 Lack of independent testing of BSA Compliance 208.63(c)(2) 78001 Failure to establish procedures to ID/report suspicious transactions, maintain, update customer info 1020.210(a)(2)(v)(B) 80005 Failure to designate individual(s) responsible for BSA compliance 208.63(c)(3) Customer Identification Program - 31 CFR Chapter X 80006 Failure to provide adequate BSA training 208.63(c)(4) 72000 Failure to implement a written Customer Identification Program 1020.220(a)(1) Suspicious Activity Reports- 12 CFR Part 208.62 Reg H 72001 Failure of Customer Identification Program to specify what identifying information will be obtained 1020.220(a)(2)(i)(A) 81000 Failure to file SAR for funds derived from illegal activities 208.62(c)(4)(i) 72002 Failure to obtain minimum information prior to account opening 1020.220(a)(2)(i)(A)(1) through (4) 81001 Failure to file SAR for transactions designed to evade BSA regulations 208.62(c)(4)(ii) 72003 Failure to properly address situations where TIN is not obtained 1020.220(a)(2)(i)(B) 81002 Failure to file SAR for transactions with no business or apparent lawful purpose 208.62(c)(4)(iii) 72004 Failure of Customer Identification Program to contain procedures for verifying customer identity 1020.220(a)(2)(ii) 81003 Failure to file a timely SAR 208.62(d) 72005 Failure of Customer Identification Program to contain procedures setting forth documents that will be used 1020.220(a)(2)(ii)(A) 81004 Failure to maintain copies of SARs filed and supporting docs 208.62(g) 72006 Failure of Customer Identification Program to contain procedures that describe non-documentary methods used 1020.220(a)(2)(ii)(B) 81005 Failure to notify Board of SARs filed 208.62(h) 72007 Failure of non-documentary procedures to address certain situations 1020.220(a)(2)(ii)(B)(2) 81006 Failure to maintain confidentiality of SARs 208.62(j) 72008 Customer Identification Program does not address when to obtain information about account authority or control 1020.220(a)(2)(ii)(C) 81007 Failure to file SAR in accordance with form’s instructions 208.62(i) 72009 Failure of Customer Identification Program to include procedures when customer’s identity is unknown 1020.220(a)(2)(iii) 81008 Failure to file SAR for insider abuse involving any amount 208.62(c)(1) 72010 Failure of Customer Identification Program to include recordkeeping procedures 1020.220(a)(3) 81010 Failure to file SAR for transactions aggregating $5,000 or more where a suspect can be identified 208.62(c)(2) 72011 Failure to keep minimum records required under Section 1020.220 1020.220(a)(3)(i)(A) through (D) 81011 Failure to file SAR for transactions aggregating $25,000 or more regardless of potential suspects 208.62(c)(3) 72012 Failure to keep CIP records for the required timeframes 1020.220(a)(3)(ii) Program Violation – any citation of this code may include a formal or informal action/order as per Federal Reserve Act Pillar Violation – any repeat citation of this code may include a formal or informal action/order as per Federal Reserve Act FinCEN 5 th Pillar – these codes together comprise the fifth pillar of BSA compliance programs under FinCEN regulations 72013 Failure of Customer Identification Program to include procedures for determining if customer is on terrorist list 1020.220(a)(4) 72014 Failure of Customer Identification Program to include procedures for providing adequate notice to customers 1020.220(a)(5)(i) 72015 Failure to meet certain conditions if relying on another institution to perform Customer Identification Program 1020.220(a)(6)