Knowledge Base
HANDOUT
ASK Webinar Series
Preparing for the AML Act of 2020
Handout available for August 17, 2021 webinar.
ARTICLE
OFAC Compliance Series | Part 5 of a 5 Part Series
Part 5: OFAC Independent Audits and Evaluations
By: Maleka Ali
Probably the best control an organization has in its OFAC controls arsenal is an OFAC scanning system. However, some organizations have been criticized for being too reliant on those systems when they weren't working properly. So, in order to list them as a control, you must ensure they are working properly.
That being said, regulations don’t say everyone and everything must be automated. It says manual or automated.
There may be certain transactions; say, for example, new employees, that your procedures/process is to check these manually, and that may be sufficient for the volume and the risk. However, scanning your entire database of customers every time there is an OFAC update is not something you could easily do manually. Whatever processes you use, you will have to justify that they are sufficient for catching transactions that are in violation of OFAC.
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OFAC Compliance Series | Part 4 of a 5 Part Series
Part 4: Internal Controls to Lower Your Inherent Risk of an OFAC Violation
By: Maleka Ali
During Parts 1 through 3 of our OFAC series, we reviewed program basics, building your risk assessment methodology and tips and tricks for your risk assessment. Now, let's talk about internal controls.
Controls might include infrastructure, detection tools and software, training, and independent audits. And of course, all of this needs to follow a risk-based approach. Your OFAC program and controls should also be tempered by the organization’s risk appetite and available resources to avoid both regulatory and OFAC violations, and your program’s policies and procedures must match or exceed the risk.
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OFAC Compliance Series | Part 3 of a 5 Part Series
Part 3: Tips and Tricks for a Successful OFAC Risk Assessment
By: Maleka Ali
OFAC risk assessments are the strength of any well-built OFAC compliance program. An efficient and effective program cannot be developed without knowing where the risks are hiding. Many businesses, both financial and non-financial institutions, are conducting assessments to uncover risks, design strong OFAC compliance programs, and mitigate their exposure.
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OFAC Compliance Series | Part 2 of a 5 Part Series
Part 2: OFAC Risk Assessment Methodology
By: Maleka Ali
Your company’s OFAC risk assessment is what drives your OFAC program’s policies and procedures and allows examiners to identify the strengths and weaknesses of your program.
• That being said, your OFAC program should be tempered by the Institution’s risk appetite and available resources to avoid both regulatory and OFAC violations.
• Your program’s policies and procedures must match or exceed the risk.
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OFAC Compliance Series | Part 1 of a 5 Part Series
Introduction: OFAC Compliance Obligations
By: Maleka Ali
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces sanctions based on U.S. foreign policy and national security goals against targeted individuals and entities.
OFAC acts under the President’s wartime and national emergency authorities, along with powers granted by legislation, to impose controls on transactions and freeze assets. Many of the sanctions are based on international mandates and involve cooperation with allied governments.
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NEW YORK STATE OF MIND
ACAMS Exclusive
By: Maleka Ali
“It comes down to reality and it’s fine with me ‘cause I’ve let it slide” might be lyrics from our favorite Billy Joel song, but to many of us a New York state of mind is a reality.
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TAILORING THE STAFFING ASSESSMENT
Using the Risk Assessment to Drive Staffing
By: Brienne Bryson
Like everything else in the AML/BSA/CTF program, the staffing assessment and resource allocation is risk-based.
Nearly as important as understanding the risk to an institution is understanding the staffing expertise and resources needed to adequately mitigate that risk. A lack of experienced and qualified staff may directly affect an institution’s ability to mitigate and manage the risks identified in risk assessment.
Attracting and retaining qualified resources is often a struggle for financial institutions that have a finite amount of monetary resources, especially for those that determine that investing in a “cost center,” such as compliance, is not as lucrative and beneficial to the business as a “revenue center.” However,
regulating agencies have shown through both their guidance and enforcement actions that failing to allocate adequate resources, personnel and financial, for the AML/BSA and CTF departments can be a costly mistake.
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AUDITING FOR EFFECTIVE TRAINING
By: Maleka Ali
“Banking organizations must develop, implement, and maintain effective AML programs that address the ever-changing strategies of money launderers and terrorists who attempt to gain access to the U.S. financial system.” (FFIEC BSA/AML Examination Manual-Introduction)
Anti-money laundering (AML) statutes were first introduced in the United States in the 1970s in the form of the Bank Secrecy Act. This established basic record keeping and reporting requirements and has since expanded in complexity to also require banks to establish procedures to ensure compliance with the Bank Secrecy Act (BSA).
The regulations dictated that financial institutions must establish and maintain a BSA/AMLcompliance program that includes the following four pillars:
1. A system of internal controls to ensure ongoing compliance
2. Independent testing of BSA compliance
3. A specifically designated person or persons responsible for managing BSA compliance
4. Training for appropriate personnel
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TO RISK OR NOT TO RISK
Five Questions to Ask Yourself Before Attempting to “De-risk” Your Institution
By: Maleka Ali
We have been getting mixed signals about a new anti-money laundering trend of banks ‘de-risking” undesirable accounts.
This was being accomplished by having bank examiners place pressure on banks to do more when it came to due diligence of higher risk businesses. Institutions unwilling or understaffed or unequipped to take on this additional monitoring were closing these businesses in order to avoid regulatory fines.
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WHEN WAS YOUR LAST CHECKUP?
Do Community Banks Pay the Price for Big Bank Crimes?
By: Maleka Ali
We have been getting mixed signals about a new anti-money laundering trend of banks ‘de-risking” undesirable accounts.
Just like avoiding the dentist, we can’t put off having a regular checkup of our BSA program to avoid serious problems. It might seem like a waste of time and resources especially if you feel you have low risk, but the consequences of not being prepared are huge.
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NINE COMMON WEAKNESSES IN A BSA/AML PROGRAM…
And How to Find Them Before Examiners Do.
By: Maleka Ali
Over the last several months, there have been headlines warning of increased scrutiny by examiners on BSA/AML and dire consequences for banks unprepared for their exams.
What should you be looking for and what can you do to shore up your BSA/AML program to ensure you don’t fall under the regulator’s lash? Let’s address nine of the most common weaknesses.
The first four weaknesses all address lack of structure or organization. Many institutions have been criticized for not having an effective suspicious activity monitoring program. It must be risk based, but to be effective it must also include four basic components.