BSA/AML Student Exercises Dec. 2022

A threshold of $1,000 in money services business activity with the same person (in one type of activity) on the same day in one or more transactions is required for businesses in the first four categories. However, a business is considered an MSB if the business provides money transfer services in any amount. With limited exceptions, MSBs are subject to the full range of BSA regulatory controls, including the anti-money laundering program rule, suspicious activity and currency transaction reporting rules and various other identification and recordkeeping rules. Many MSBs, including the vast majority of money transmitters in the United States, operate through a system of agents. While agents are not presently required to register with FinCEN, they are MSBs that are required to establish anti-money laundering programs and comply with other recordkeeping and reporting requirements described above. The range of products and services offered, and the customer bases served by MSBs, are equally diverse. In fact, many MSBs only offer money services as an ancillary component to their primary business, such as a convenience store that cashes checks or a hotel that provides currency exchange. Other MSBs offer a variety of services, such as check cashing and stored value card sales. Minimum Bank Secrecy Act Due Diligence Guidelines The minimum due diligence requirements associated with opening and maintaining accounts for MSBs are: 1. Application of the Bank's Customer Identification Program Policy; 2. Confirmation of FinCEN registration, if required; 3. Confirmation of compliance with state or to call licensing requirements, if applicable; 4. Confirmation of agent status, if applicable; and 5. The BSA Dept. will determine if further enhanced due diligence is required after account has been opened and monitored. New accounts personnel, at the time of account opening, should complete BSA questionnaire for each customer that is considered a MSB. The completed form, in addition to any support documentation, should be forwarded to the BSA Department for review. The BSA Department will rely on the information received on the MSB from the Internal Revenue Service as confirmation that the MSB has registered with FinCEN. Such proof is to be attached to the BSA Money Services Business Questionnaire and filed in the Bank's MSB file for historical and compliance reference. Generally, MSB customers should be able to provide such correspondence and be prepared to provide it upon request; however, it may take 60 days or more after an MSB files its registration form for the business to receive an acknowledgment letter from the Internal Revenue Service. The acknowledgment letter from the Internal Revenue Service will be the only confirmation received by the MSB. As an alternative, if the MSB has filed its registration, but has not yet received its acknowledgement letter, it is the responsibility of the BSA Department to rely on a copy of the registration form submitted by the MSB until the MSB either receives its acknowledgement letter or appears on the MSB registration list published by FinCEN (accessible at www.msb.aov). This documentation is to be placed in the Bank's MSB file for further reference. Bank personnel may inform MSB customers who are required to register with FinCEN of the following information that will assist them with their registration requirements. Customers can register by: 1. Visiting http://www.msb.qov; 2. Calling FinCEN's Regulatory Helpline at 1-800-949-2732; 3. Obtaining free educational materials produced by FinCEN for MSBs are available by: A. Submitting an online order form through the http://www.msb.gov website;

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