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HMDA – Beyond the Input
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Automated Monitoring Systems: Implementation to Validation
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MasterCard & Reg E Error Resolution
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#1085321 - 11/20/08 03:31 PM BSA/AML High Risk Businesses
BSAlearner Offline
New Poster

Registered: 11/20/08
Posts: 1
Loc: Ohio
Is there a place where I can get a listing of high risk businesses or lines of business? I know that the FFIEC manual has them scattered througout. We use NAICS codes and are creating a new list of high risk businesses for BSA/AML purposes.

Risk Management
#1085404 - 11/20/08 04:47 PM Re: BSA/AML High Risk Businesses [Re: BSAlearner]
Kathleen B Online

10K Club

Registered: 12/27/00
Posts: 19193
The list in the manual is a starting point and individual customers within those industries may or may not be high risk - that is determined by the products that they use and actual activity.

You should look to your bank's SARs and see if there are any patterns for sources of SARs....used car dealers, etc. Add those to the list of customers to consider. Any cash business is worth consideration as well, as well as any industries that involve import/export.

Keep in mind however that while you might start out flagging all customers in a particular industry you must then assess each customer and make a determination based upon their own behavior.
Kathleen Blanchard CRCM "Kaybee"

#1086642 - 11/24/08 08:29 AM Re: BSA/AML High Risk Businesses [Re: Kathleen B]
P*Q Offline

Power Poster

Registered: 05/29/01
Posts: 7426
Loc: By the ocean
We started with the BSA exam manual and have since added folks that we've filed SARs on and others whose behaviors just aren't "normal", as Kaybee suggests.

#1106244 - 01/06/09 03:18 PM Re: BSA/AML High Risk Businesses [Re: BSAlearner]
Orrsislander Offline
100 Club

Registered: 01/29/02
Posts: 109
Here is a list we used in the beginning:
High-Risk” Examples include:
 Nontraditional financial entities, such as:
 Currency exchange houses, also known as giros or casas de cambio.
 Money transmitters.
 Check cashing facilities.
 Casinos and card clubs.
 Offshore corporations and banks located in tax and/or secrecy havens.
 Leather goods stores.
 Car, boat, and plane dealerships.
 Used automobile or truck dealers and machine parts manufacturers.
 Travel agencies.
 Brokers/dealers.
 Jewel, gem, and precious metal dealers.
 Import/export companies.
 Auctioneers.
 Deposit brokers.
 Pawn brokers.
 Professional service providers (lawyers, accountants, investment brokers).
 Cash-intensive businesses, such as convenience stores, restaurants, retail stores, and parking garages.
 Ship, bus, and plane operators.
 Telemarketers.

Banking functions and transactions
 Private banking.
 Trust departments.
 Offshore international activity.
 Deposit-taking facilities.
 International correspondent banking activity.
 Internet banking.
 Wire transfers/cash management functions.
 Transactions in which the primary beneficiary or counterparty is undisclosed.
 Loan guarantee schemes.
 Transactions involving large amounts of traveler’s checks, official bank checks, money orders, and stored value cards.
 Pouch activity.
 Electronic transactions that permit the rapid movement of currency (e.g., foreign exchange transactions followed by payment into another jurisdiction).
 Trade financing transactions with unusual pricing features.

High-Risk Countries
 Countries in which the production or transportation of illegal drugs may be taking place.
 Bank secrecy havens.
 Emerging countries that may be seeking hard currency investments.
 Countries identified in FinCEN advisories.
 Major money laundering countries and jurisdictions.


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