Alert May 04, 2010

FFIEC Releases Updated Bank Secrecy Act/Anti-Money Laundering Manual

The Federal Financial Institutions Council (“FFIEC”) released the 2010 version of its Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual (the “Revised Manual”).  The Revised Manual is the result of a joint effort by the Federal Reserve Board, the FDIC, the NCUA, the OCC, the OTS, the State Liaison Committee, and FinCEN, with input from OFAC on appropriate sections.  The updates to the Revised Manual, which the FFIEC explained has been revised to further clarify supervisory expectations since the last update in August 2007, are based on feedback provided by the banking industry and examination staff. 

In releasing the Revised Manual, the FFIEC stated that the most significant updates include:  (1) addition of a new section on bulk currency shipments; (2) substantial revisions to the section on Enterprise-Wide BSA/AML Compliance programs, which has been retitled “BSA/AML Compliance Program Structures,” including an enhanced discussion of consolidated compliance programs; (3) streamlining and reorganization of core examination procedures for evaluating BSA/AML compliance; (4) further guidance to examiners for determining when a violation is systemic or recurring; (5) updates to address new regulations and guidance in the Revised Manual’s sections regarding currency transaction reporting (“CTR”) exemptions, reporting of foreign bank and financial accounts (“FBARs”), electronic banking, and third party payment processers; (6) revisions to reflect industry practices and developments in the Revised Manual’s sections regarding funds transfers, ACH transactions, and trade finance activities; (7) an enhanced and reorganized section regarding suspicious activity reporting (“SARs”), including the addition of a new Appendix S regarding the key components of a SAR monitoring program; and (8) updates to the Revised Manual’s section on electronic cash to include a more detailed discussion of prepaid cards.  The sections of the Revised Manual with the most significant updates have been identified by noting them with the year (2010) in the table of contents.