You may have yawned when reading about Section 352 of the USA PATRIOT Act which requires all financial institutions to establish an anti-money laundering program, figuring you probably had all the necessary bases covered. Perhaps you do, but we offer a few suggestions.
Develop a thorough understanding of the three stages of money laundering- placement, layering and integration.
Study the SAR Activity Review to become familiar with trends in suspicious activity and money laundering in order to develop specific safeguards.
Review the FATF recommendations that apply to financial institutions (Recommendations 10 through 21) and determine which ones should be incorporated into your program and in what form;
Familiarize yourself with FATF's list of non-cooperating countries and territories (the NCCT list) and determine what precautions should be taken when a transaction includes an individual or entity who resides in such a country, does business in such a country, or in some way involves such a country.
Develop a way to monitor the NCCT list for changes;
Determine what money laundering scenarios have been seen by other financial institutions in your area, as well as other like-sized financial institutions;
Formulate a training program to teach your employees to recognize and prevent money laundering;
Identify appropriate products and services your institution should be using for anti-money laundering purposes, based upon your size, location and activities and incorporate them into your program. From software to help you spot structuring to I.D. guide books to help CSRs authenticate identification documents presented in the new account area;
Make a decision about whether you intend to share information with other financial institutions and associations relating to possible money laundering and/or terrorist activities. If so, file a Certification of Intent to Share Information form (described below);
Make sure you have adequate resources available to your employees for confirming the validity of various pieces of identification, whether they are commercially available tools (such as the ones from driverslicenseguide.com), or ones you have developed in-house.
The original version appeared in the March 2002 edition of the Oklahoma Bankers Association Compliance Informer.
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