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September 22
FinCEN's Beneficial Owners Proposal: What It Can Mean for You;
Sonja Kriegsmann and John Burnett

September 23
Bankruptcy 101;
Sam Ott

September 30
Revised Escrow Rules - Review and Update;
Jack Holzknecht and Mary Beth Guard

October 7
CRA - Digging for Credit;
Patricia Cashman

October 8
Applicants and Applications: Knowing the Players and the Rules;
David Dickinson

October 15
MasterCard and Reg E: Basic Debit Card Investigations;
Brian Crow



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#1600413 - 09/07/11 09:52 AM LIST OF HIGH RISK BUSINESSES
lpramey67 Offline
100 Club

Registered: 08/16/06
Posts: 127
Can someone please direct me to where there is a list of high risk businesses in the Exam Manual?

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BSA/AML/CIP/OFAC
#1600438 - 09/07/11 10:22 AM Re: LIST OF HIGH RISK BUSINESSES [Re: lpramey67]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17334
Loc: Another trip around the sun
There isn't one.

With the first publication of the Manual they changed their philosophy; i.e. it is up to each bank to establish its own list of high risk customers based on its own analysis. There is no business that automatically gets a high risk classification.

The manual does list customers "subject to expanded examination overview." They can and should be identified by every bank. Those customers should be the first analyzed to determine if they deserve a high risk classification, but not all of them will.
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The world is not a wish granting factory. Hazel Grace Lancaster

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#1600490 - 09/07/11 11:33 AM Re: LIST OF HIGH RISK BUSINESSES [Re: lpramey67]
Reads Regs Offline
Diamond Poster

Registered: 11/15/04
Posts: 2020
As Ken said, there isn't a list. Here's the section of the online manual that addresses risk assessment. http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_005.htm
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Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.

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#1601113 - 09/08/11 01:30 PM Re: LIST OF HIGH RISK BUSINESSES [Re: Reads Regs]
NewTooBSA Offline
Platinum Poster

Registered: 11/07/05
Posts: 562
Loc: Texas
With that being said, we have a list of businesses that we consider high risk and require enhanced due diligence. These accounts are coded when they are opened so BSA can do a back office review.

The businesses include: MSB/Check Cashers, Convenience Stores, Casinos/gaming establishments/card clubs, Non-profit/governmental agencies, car/boat/airplane dealerships, travel agencies, jewels/gems/precious metal dealers, import/export companies and real estate brokers/agents/management companies. We also look at professionals such as doctors and lawyers but do not code them as requiring enhanced due diligence.

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#1601299 - 09/08/11 03:53 PM Re: LIST OF HIGH RISK BUSINESSES [Re: NewTooBSA]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17334
Loc: Another trip around the sun
That's pretty much what they do not want you to do...
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The world is not a wish granting factory. Hazel Grace Lancaster

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#1601309 - 09/08/11 04:04 PM Re: LIST OF HIGH RISK BUSINESSES [Re: Ken_Pegasus]
ACBbank Offline
Power Poster

Registered: 07/26/06
Posts: 2586
Loc: New York City
Prior to my arrival at my current FI the OCC forced, yes, forced my FI to code all those types of businesses that NewToo mentioned as High Risk. I cannot count the number of hours’ wasted and false positives I had to deal with because of this "recommendation."

As Ken posted earlier, you're not required to code any one high risk from day one. Type of business is just one factor, which when examined with others, expected/actual activity, types of products/services needed by the customer, foreign vs. domestic activity, etc. which can lead to a high risk rating. This is all part of using a risk based approach. That is what the manual recommends.
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"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#1601611 - 09/09/11 10:54 AM Re: LIST OF HIGH RISK BUSINESSES [Re: NewTooBSA]
PeeWee Offline
100 Club

Registered: 08/31/07
Posts: 242
NewTooBSA, what is your process for the employee opening the account to "code" them so that BSA can review? For example, is this done by the SIC or NAICS code?

Thanks!

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#1602074 - 09/09/11 07:09 PM Re: LIST OF HIGH RISK BUSINESSES [Re: PeeWee]
WonderWoman Offline
Diamond Poster

Registered: 03/07/07
Posts: 1989
Loc: gone fishin'
We have a select list for employees to choose from (unfortunately we do not have NAICS or SIC code capability in our core system).

Examples:

A Attorney
ACCT Accountant
AG Agriculture / Farming
ATM ATM Provider
AUCT Auctioneer
AUTO Auto/Boat/Plane Dealer/Repair
C Construction Industry
CAR Car Wash
CHURC Church
CON Convenience Store/Gas Station


I can then pull queries from our core system to show me (for example): "All CIS records with "CON" in the profile code".


Also, all business risk assessment forms are forwarded to our BSA dept for review & we make sure the profile code matches.
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My opinions are my own, and not that of my employer.

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#1602537 - 09/12/11 03:55 PM Re: LIST OF HIGH RISK BUSINESSES [Re: WonderWoman]
NewTooBSA Offline
Platinum Poster

Registered: 11/07/05
Posts: 562
Loc: Texas
PeeWee
Our core processor does not have a way to code accounts using the NAICS or SIC codes either. However they do have an account type field that we utilize with a 3 digit code.

Convenience/Liquor Stores = 301
Check Cashers = 401
Personal Accts = 101
All other high risk commercial = 201

Using that along with the occupation/business we are able to identify the types of businesses and why they are coded as high risk. This also allows us to identify these accounts for annual OCC reporting of the MLR by pulling accounts by account type and sorting by occupation/business.

And in answer to Ken's response: I know we are not "supposed" to make a list of high risk customers based on their business/occupations but it is the only solution we could come up with to identify the information required to be provided to the OCC. Because we also have automated AML software, these same customers are risk rated based on their activity and that is where the true monitoring takes place.

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