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All in BSA
On 9/1/2020, the Financial Crimes Enforcement Network (FinCEN) released a statement advising against SAR Disclosure by various media outlets:
“The Financial Crimes Enforcement Network (FinCEN) is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed Suspicious Activity Reports (SARs), as well as…
On 8/21/2020, the joint agencies (Federal Reserve, FDIC, FinCEN, NCUA, and OCC) issued a joint statement clarifying that Bank Secrecy Act (BSA) due diligence requirements for customers who may be considered “politically exposed persons” (PEPs) should be commensurate with the risks posed by the PEP relationship. Of particular note, the statement clarifies that PEPs refer to senior foreign individuals and that “the Agencies do not interpret the term “politically exposed persons” to include U.S. public officials.”
On 8/18/2020, the Financial Crimes Enforcement Network (FinCEN) issued a statement that explains its approach to enforcing BSA/AML rules and regulations. This statement corresponds with the interagency statement issued on 8/13/2020 by the FDIC, Federal Reserve, OCC, and NCUA. In their release, FinCEN explains that this statement is intended to provide clarity and transparency to its approach when contemplating compliance or enforcement actions against covered financial institutions that violate the Bank Secrecy Act. The statement outlines administrative actions available to FinCEN, provides an overview of the information FinCEN analyzes in order to determine the appropriate outcome of BSA violations, and encourages financial institutions to voluntarily and promptly report violations as well as candidly and completely cooperate with any investigation.
On 8/13/2020, the joint regulators (FDIC, Federal Reserve, OCC, and NCUA) issued an updated joint statement on enforcement of BSA/AML requirements. As explained in the FDIC’s release (FIL-76-2020), this statement - which runs about 13 pages long - does not create new expectations or standards, but describes circumstances in which an agency will issue a mandatory cease and desist order to address noncompliance with BSA/AML requirements.
On 8/3/2020, the Financial Crimes Enforcement Network (FinCEN) issued responses to three frequently asked questions (FAQs) regarding customer due diligence requirements for covered financial institutions. These FAQs are in addition to those published on July 19, 2016 and April 3, 2018. The first FAQ discusses the collection of customer information for CDD, while the second question focuses on establishing a customer risk profile. The third question relates to performing ongoing monitoring of the customer relationship.
On 7/30/2020, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to alert financial institutions to potential indicators of cybercrime and cyber-enabled crime observed during the COVID-19 pandemic. This advisory provides a number of red flags for financial institutions to look for and includes SAR filing instructions of including the key term “COVID19-CYBER FIN-2020-A005”. Institutions filing SARs should also select SAR field 42 (Cyber Event) for each applicable filing.
On 7/16/2020, the Financial Crimes Enforcement Network (FinCEN) issued an alert regarding a high-profile scam that uses Twitter accounts to solicit fraudulent payments denominated in convertible virtual currency. In their release, FinCEN explains that hackers compromised the accounts of financial institutions, organizations, and even public figures to solicit payment to vertual currency accounts. The scam claimed that any virtual security sent to the wallet address provided by the hacked accounts would be doubled and returned to the sender.
On July 14, 2020, FinCEN released an advisory on the FATF-identified jurisdictions with AML/CFT deficiencies. This advisory, known as FIN-2020-A004, relays information to US financial institutions regarding countries the Financial Action Task Force (FATF) has identified as having deficiencies.
FATF is an intergovernmental body comprised of 37 nations that work together to create uniform anti-money laundering standards. When countries don’t meet their standards, FATF communicates deficient countries to the FinCEN, who then provides communication to financial institutions.
This current advisory noted that FATF has temporarily paused its review process for most countries with strategic deficiencies due tot he COVID-19 pandemic. In their advisory, FinCEN explains that FATF made the initial determination
On 7/7/2020, the Financial Crimes Enforcement Network (FinCEN) issued advisory FIN-2020-A003 to alert financial institutions to potential indicators of imposter scams and money mule schemes, which are two forms of consumer fraud that have been discovered so far during the COVID-19 pandemic. This advisory contains descriptions of imposter scams and money mule schemes, financial red flag indicators for both, and information on reporting suspicious activity.
On 6/29/2020, FinCEN issued guidance (FIN-2020-G001) to address BSA/AML requirements for hemp-related business customers. This guidance supplements the December 3, 2019 interagency statement on providing financial services to customers engaged in hemp-related businesses and focuses on the due diligence for financial institutions servicing hemp-related businesses. The guidance also explains the type of information and documentation financial institutions can collect from hemp-related businesses to comply with BSA/AML rules.
