As 2015 comes to a close, we are pleased to share our most popular articles from the Risk Management Blog in 2015.

1. 4 Red Flags of Money Laundering or Terrorist Financing

One of the most important aspects of BSA/AML compliance is the responsibility it places on regulated financial entities to report suspicious transactions. This responsibility requires an organization to be able to monitor and identify transactions, evaluate them in real time, and flag the ones that are suspicious. In many cases, a Suspicious Activity Report (SAR) should be filed with the Financial Crimes Enforcement Network (FinCEN).

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2. 5 Key Components of a BSA/AML Compliance Program

You are most likely familiar with the Financial Crimes Enforcement Network (FinCEN) which is a bureau of the Treasury Department. FinCEN’s mission is “to safeguard the financial system from illicit use and combat money laundering and promote national security” through the use of financial services information.

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3. The Important Role of Internal Controls for AML Compliance

It is well understood that money launderers use deceit or theft to capture the processes of financial entities for illicit purposes. As a result, your AML compliance program must implement internal control designs that increase the chances of preventing or detecting such activities.

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Both the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) mandate that covered financial entities—and this includes all banking institutions, virtually all money service businesses, and many cash-intensive non-bank businesses—establish an Anti Money Laundering (AML) compliance program.

Compliance is not an optional choice, and that imposes costs. The good news is that the costs of compliance can be managed relative to each business’ risk profile with respect to money laundering. In other words, a smaller business with limited risk can establish an effective compliance program that will stand up to scrutiny at a lower cost than a big bank with lots of foreign transactions. FinCEN and OFAC promote risk-based compliance programs in recognition of this reality.

However, every business that is covered by BSA/AML requirements should be looking at similar factors in building a risk profile, the first step toward a compliance program. The risk factors common to all financial businesses include business lines (type of business function), customers (meaning any person or entity that can engage in financial transactions), products and services, and location. … Continue reading