Answer:
Answer by Ken Golliher:
Section 352 of the Patriot Act requires financial institutions to establish anti-money laundering programs in the time frame you note. BSA's definition of "financial institution" extends well beyond banks, but there is an underlying debate as to the application of this section to banks. The ABA testified before Congress that most banks already have such programs (not my belief by a long shot) and this portion of the statute should not increase their burdens. In parallel, regulatory agencies have already pressured some banks into developing such policies by citing them to the "program regs," the agencies' regulations that require banks to have BSA compliance programs.
The end result is that your bank needs an AML program, whether the impetus is this statute or the program regs. It would be time well spent to start listing your internal controls and sketching a policy, but I would encourage you to wait at least until proposed regulations are issued before you build a new program or rebuild an old one.
The regulations will indicate if the AML policy must be separate from the BSA policy. As a matter of personal opinion, AML, BSA and OFAC involve related tasks, personnel and objectives. They also have the same required elements: internal controls, independent testing, training and the appointment of an individual responsible for compliance. The most efficient way to implement all three programs would be to develop an integrated policy and procedures; there is no advantage to requiring separate policies and procedures. If you take this approach, it would be wise to clearly indicate the multiple objectives of the policy, mentioning each specifically several times.
Answer:
Answer by Mary Beth Guard:
I think it is instructive to look at the summaries of the USA PATRIOT Act drafted by the regulatory agencies and see what they have to say about the Section 352 requirements.
The Federal Reserve's summary says:
"Section 352 of the Act imposes on all financial institutions an anti-money laundering program requirement. The program must include components similar to those found in the Federal Reserve Board's Regulation H requirements at 12 CFR 208.63. Further guidance will be issued in the event that future Treasury regulations result in any change in the application of Regulation H to banking organizations supervised by the Federal Reserve."
The OCC's summary says:
"Section 352 requires all financial institutions to have a Bank Secrecy Act (BSA) program that contains the four basic components of a typical BSA program. See, e.g., 12 CFR 21.21(c) (describing minimum requirements for BSA compliance programs of national banks). (The term "financial institution" is defined in Subchapter II of Chapter 53 of USC Title 31 to include brokers, dealers, MSBs, currency exchanges, insurance companies, travel agencies, car dealers, casinos, and realtors.)"
The OTS's summary says:
"The Act imposes an anti-money laundering program requirement on all financial institutions. Theprogram must include components similar to those found in OTS’s rules at 12 CFR 563.177. The OTSwill issue further guidance in the event that future Treasury regulations result in any new requirements."
The bottom line is that the regulators are generally referring to the Section 352 requirements as being "similar" to those in the BSA rules, but the new regulations, when they come out, could shed a whole new light on the matter.
First published on BankersOnline.com 4/01/02
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