For money service businesses throughout the country, compliance with anti-money laundering and Bank Secrecy Act laws is critical. Failure to comply with such regulations could lead to both civil and criminal penalties. As part of compliance with the Anti-Money Laundering (AML) laws and the Bank Secrecy Act (BSA), money service businesses must conduct independent reviews of their compliance programs. Here’s what you should know about the purpose of independent AML/BSA reviews and how Bates Group can help—
What Are Anti-Money Laundering Laws?
Anti-money laundering, or AML, refers to the set of rules, regulations, and laws that are intended to prevent financial crimes, primarily terrorism financing, the disguise of illegally obtained funds and money laundering, and other financial crimes. In short, money laundering laws are designed to prevent criminals from laundering money through a legitimate, cash-based business, making it difficult for the funds to be traced back to illegal activity. Under AML rules, financial institutions are required to design and implement compliance programs.
What Is the Bank Secrecy Act?
The Bank Secrecy Act and anti-money laundering laws go hand-in-hand. Under the Bank Secrecy Act, or BSA, financial institutions are required to work with the United States government to fight against financial crime. Like anti-money laundering laws, the BSA is primarily concerned with money laundering, although it has been expanded (most notably following 9/11 through the Patriot Act) to address and prevent terrorist-financing activities, too.
The Purpose of an Independent AML/BSA Review
Under the BSA, financial businesses are required to design, implement, and monitor anti-money laundering compliance programs. An AML-BSA compliance program must include written policies and procedures for preventing and handling money laundering, compliance training for employees, an assigned compliance officer—usually a principal employee of the firm, and an independent review and audit program.
The purpose of an independent audit, as explained by the Financial Crimes Enforcement Network, is to monitor and assess the efficacy of the money service business’s anti-money laundering program. A review, which should be conducted by an independent third-party, should answer questions about the money service business’s compliance with AML/BSA regulations, the adequacy of the written policies and procedures to address money laundering, and whether the business is adequately addressing the money-laundering risks it faces.
Learn More By Calling Bates Group Directly Today
To learn more about AML and BSA compliance and how to design an anti-money laundering compliance program that includes independent testing and meets requirements, please reach out to Bates Group today. Our experienced consultants specialize in AML and BSA compliance and can provide your financial business with the guidance it needs.