he realm of regulations can be similar to a bowl of alphabet soup at times. US money laundering regulations aren' exception. We have compiled an index of the top 10 money laundering acronyms as well as their definitions.
AML - Anti money laundering is the word for activities created for curbing the era of the money laundering. Money laundering is a region of focus for regulators, and an important tool in fighting against drug trafficking and terrorist financing.
BSA - The Bank Secrecy Act was the original US regulation targeting money laundering. At first the regulation was primarily focused entirely on tax evasion and organized crime. BSA focused entirely on establishing a paper trail for cash transactions over $10,000. Most people consult your entire selection of anti money laundering regulations because BSA.
KYC - Know your customer is the very idea of understanding who your customer is. Various components of what the law states require finance institutions to make sure that the identity of customers. Banks must know what normal activity is good for given customers. , and without knowing what behavior you may anticipate it's tricky to spot what activity is suspicious.
CIP - Portion of KYC, the Customer Identification Program has been available since the USA PATRIOT Act. CIP requires finance companies to collect five pieces of facts about new customers. That doctor needs to collect name, dob, an actual address, ss # (or tax id number), and proof of identity. CIP programs allow it to become more challenging for criminals to look at accounts without attracting attention.
CTR - A Currency Transaction Report is filed for any cash transaction above $10,000. CTRs may also be declared multiple transactions by precisely the same individual who total $10,000 within a given period. People that break transactions up to steer clear of the reporting threshold raise suspicion. So long as the source of funds is legitimate, there won't be negative consequences with a CTR filing. Such as a cash intensive business maybe a bar that deposits business receipts is definately not suspicious.
SAR - If a financial institution (very broadly defined) suspects than a transaction will be the proceeds of illegal activity, they are needed to file a Suspicious Activity Report. Someone is definately not notified when a SAR is filed against them, in an attempt to avoid tipping off potential criminals. SAR filings are sent to the money laundering Crimes Enforcement Network, who assess if further investigation is warranted.
FinCEN - The Financial Crimes Enforcement Network is definitely the US Government entity tasked with fighting financial crimes including money laundering. SAR reports are filed with FinCEN. Periodically FinCEN provides analysis based on the information provided in SAR reports.
USA PATRIOT Act - The Uniting and Strengthening America by Providing Appropriate Tools Forced to Intercept and Obstruct Terrorism Act was enacted after 9/11/2001. As possess, what the law states provided extensive tools for the police in the fight against terrorism. The law also made significant enhancements to money laundering laws. Notably it required the development of CIP programs.
PEP - Politically Exposed Persons are certainly high-ranking foreign government officials and associates. Because of the high-ranking the logic follows potentially they are an increased risk for corruption. There isn't any standard listing of PEPs like there may be for OFAC specific designated nationals. Loan companies will need to take a risk based method to addressing PEPs and are certainly not expressly forbidden from obtaining as customers. At a minimum, financial institutions must perform enhanced due diligence on PEPs.
OFAC - The Office of Foreign Asset Control is just not proportional to money laundering. OFAC enforces economic sanctions against foreign countries. Under OFAC rules, banks are prohibited from conducting monetary transactions with certain foreign countries. Assets of specific individuals and organizations will also be frozen. As OFAC rules contend with the transmission of clinking coins in relation to terrorist financing, many institutions combine these functional departments. OFAC also maintains a long list of specific designated nationals which loan companies are prohibited from working with.
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