BSA/AML Examiner Training Series 2

31 CFR Chapter X – Financial Crimes Enforcement Network (Continued)

Code

Providing services to prohibited countries or entities, as established by Special measures Multiple sections of the Treasury Department’s Bank Secrecy Act regulations, including Section 1010.651, 1010.652, 1010.653, 1010.654 and 1010.655 establish prohibitions for covered financial institutions on directly or indirectly providing banking services to listed countries or entities. Failure to establish and maintain written procedures to identify and verify beneficial owners of legal entity customers Section 1010.230(a) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution to establish and maintain written procedures that are reasonably designed to identify and verify beneficial owners of legal entity customers. This Section further requires these procedures to be part of the covered financial institution’s anti-money laundering compliance program. Failure to identify beneficial owners of legal entity customers at account opening Section 1010.230(b)(1) of the Treasury Department’s Bank Secrecy Act regulations specifies that a covered financial institution’s customer due diligence procedures shall enable the institution to identify the beneficial owner(s) of each legal entity customer at the time a new account is opened, unless the customer is otherwise excluded pursuant to 1010.230(e) or the account is excluded pursuant to 1010.230(h). Failure to verify the identity of beneficial owners of legal entity customers Section 1010.230(b)(2) of the Treasury Department’s Bank Secrecy Act regulations specifies that a covered financial institution’s customer due diligence procedures shall enable the institution to verify the identity of each beneficial owner identified that, at a minimum, contain the elements required for verifying the identity of customers that are individuals under 1020.220(a)(2). Failure to establish procedures to understand the nature and purpose of customer relationships Section 1020.210(a)(2)(v)(A) of the Treasury Department’s Bank Secrecy Act regulations specifies that a financial institution’s anti-money laundering program shall include appropriate risk-based procedures for conducting ongoing customer due diligence that enable the institution to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile. Failure to establish procedures to ID/report suspicious transactions, maintain, update customer info Section 1020.210(a)(2)(v)(B) of the Treasury Department’s Bank Secrecy Act regulations specifies that a financial institution’s anti-money laundering program shall include appropriate risk-based procedures for conducting ongoing customer due diligence that enable the institution to conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.

76,000

77,000*

77,001*

77,002*

78,000*

78,001*

Revised 5/3/2023

15