In simpler times, the Bank Secrecy Act (BSA) regulated the Anti-Money Laundering (AML) activities of banks, as the name implies. In our globalized and networked world, it has expanded to cover financial institutions ranging from the biggest banks to mom and pop check cashing, or money transfer operations running out of storefronts in a mall. The Financial Crimes Enforcement Network (FinCEN) has launched actions against businesses across this spectrum for violations of BSA/AML requirements.
One thing all these businesses have in common is a culture of compliance with BSA/AML regulations—or not. Enforcement actions have identified a weak culture of compliance as one of the causes of violations, which can result from the actions of employees at virtually any level of an organization.
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The United States imposes sanctions against foreign governments, individuals, and organizations to achieve specific foreign policy objectives, either unilaterally or as part of a coalition. Since these sanctions have the force of law, they prohibit or restrain certain actions of ordinary U.S. persons (citizens and permanent residents), companies, and organizations that might have dealings with the foreign entities. The government publishes a list of foreign countries, persons, or organizations (Specially Designated Nationals, or “SDNs”) whose assets are blocked and who cannot be part of a transaction.
Sanctions are administered and enforced by the Department of the Treasury’s Office of Foreign Assets Control (OFAC). It’s important to understand that OFAC operates under the President’s national security mandate, so it has wide latitude to devise and enforce guidelines for financial institutions’ compliance. The coverage of this authority is very broad, including all U.S. persons and organizations, including foreign branches. It even prohibits a U.S. entity from facilitating a sanctioned activity by a 3rd party foreign entity. … Continue reading