Thread Options
#968589 - 06/03/08 08:17 PM Risk Assessment - Red Flags
Spenser Offline
Member
Joined: Apr 2006
Posts: 52
Washington state
I'm updating our BSA/AML Risk Assessment and I have an internal audit issue. During our last internal audit, our auditor indicated that we should be addressing the Red Flags listed in the BSA Examination manual. She wrote a finding regarding the Red Flags, listing several of the 'flags' and noting that the monitoring of these should be enhanced, even though it would require BSA software, which we are in the process of installing, or would not involve the core system (i.e. Safe Deposit Boxes) Now, our Audit Committee believes that we should address each of the manual's 'red flags' in our BSA Risk Assessment. Has anyone else dealt with the specific red flags in their Risk Assessments? Any recommendations?...

Return to Top
BSA/AML/CIP/OFAC Forum
#968660 - 06/03/08 09:12 PM Re: Risk Assessment - Red Flags Spenser
WonderWoman Offline
Diamond Poster
WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
No. I address all the red flags in my BSA Policy.
_________________________
My opinions are my own, and not that of my employer.

Return to Top
#968670 - 06/03/08 09:19 PM Re: Risk Assessment - Red Flags WonderWoman
Compliance1 Offline
Platinum Poster
Joined: Mar 2006
Posts: 651
(not as)newbsa, do you have a sub-section under your CIP section in your BSA policy with the Red Flag issues? It was my understanding that one needed a seperate Red Flag policy etc..

Return to Top
#968682 - 06/03/08 09:31 PM Re: Risk Assessment - Red Flags Compliance1
Ted Dreyer Offline
Diamond Poster
Ted Dreyer
Joined: Apr 2001
Posts: 2,245
Just to avoid confusion, there are BSA Red Flags for money laundering and terrorist financing in Appendix F of the BSA Exam manual and then there are the Red Flag requirements for detecting and preventing Identity Theft that are included in the new FACT Act regulations. They are entirely separate.

Return to Top
#968703 - 06/03/08 10:01 PM Re: Risk Assessment - Red Flags Ted Dreyer
WonderWoman Offline
Diamond Poster
WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
Lis ... I am talking about the BSA Red Flags (which I do incorporate in my BSA/AML/CIP/OFAC policy)

not the ID Red Flags ... which you are correct ... would have to be a seperate deal.
_________________________
My opinions are my own, and not that of my employer.

Return to Top
#968870 - 06/04/08 12:00 PM Re: Risk Assessment - Red Flags Spenser
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The Appendix that Ted references has this preface:

Quote:
The following are examples of potentially suspicious activities, or “red flags” for both money laundering and terrorist financing. Although these lists are not all-inclusive, they may help banks and examiners recognize possible money laundering and terrorist financing schemes.


It's a bit scary that your committee thinks this is the checklist of things you are supposed to look for. Like "red flags" listed in a variety of sources, it is a list of examples; i.e. it is only supposed to make bankers think about the variety of activities that may be suspicious. Assuming "If we look for these things we've got it covered" is a mistake.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#968892 - 06/04/08 12:35 PM Re: Risk Assessment - Red Flags Elwood P. Dowd
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
We include a link to the red flags appendix from the BSA manual in our BSA policy as a reference to folks so they're aware of them. We also share the list with applicable staff during our BSA training sessions.
Last edited by Pizza Queen; 06/04/08 12:35 PM.
Return to Top
#969586 - 06/04/08 10:06 PM Re: Risk Assessment - Red Flags Spenser
Spenser Offline
Member
Joined: Apr 2006
Posts: 52
Washington state
Thanks for everyone's input. I was referring to the Red Flags listed in Appendix F of the exam manual. I appreciate the confirmation of my thoughts on the subject. It will help my 'cause'!

Return to Top

Moderator:  Andy_Z