BSA Exemption Review

This is a BSA Exemption Review Form by Brenda S. Canterbury, Senior Compliance Manager, Specialty Businesses, RBC Bank (USA)

A Bankers' Threads user asked if anyone would be willing to share their procedures for exempting "non-listed" businesses under the Bank Secrecy Act Phase II rules. The poster noted he was interested in seeing what types of due diligence are being performed on customers that the bank wants to exempt under Phase II and what types of documentation are being gathered and maintained for regulatory review.

This BSA Exemption Review Form is designed for our account officers to use in documenting eligibility for exemption under Phase II rules. Each officer is asked to conduct an on-site visit of the business prior to exemption and then periodically based upon the nature of its business activities. Visits to high risk businesses (whether exempted or not) are conducted more often.

I am in the process of revising our procedures to require account officers to submit evidence of registration for businesses operating as MSBs. As BSA Compliance Officer, I review submitted information and make the final determination as to whether the business will be exempted.

We obtain a new form to document retail business activities prior to biennial renewal, and more often for higher risk businesses or if we note a change in pattern or nature of transactions.

[Editor's note: With Brenda's permission, we have brought the form up to date to reflect the 1//5/2009 changes to the exemption regulatory requirements.]