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.
Like every other important function in a financial entity, a BSA/AML compliance program cannot be expected to operate on autopilot. Managers and employees have to be aware of their responsibilities in the compliance program, and contribute actively as needed. Appropriate training is necessary to transform a compliance program design into an effective on-going operation.
The content and depth of training protocols will vary depending on the size, type, complexity, and risk profile of the organization. However, the Bank Secrecy Act and related laws require that covered organizations have the ability to implement business-specific anti-money laundering programs to help enforce the laws. Broadly speaking, the training program that will enable the organization to do this has five elements.
1. The Board of Directors and Senior Management have to maintain oversight.
As part of a “culture of compliance,” top managers have to be fully informed about the policy issues involved in BSA regulations and authorize the resources needed to comply. They should periodically monitor and evaluate the compliance program based on a risk adjusted evaluation (audit) as well as reports on internal controls. Ultimately, the organizational risk due to money laundering needs to be fully understood at this level, both with respect to the consequences of the crime as well as of non-compliance. … Continue reading