The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 DIVISION OF BANKING SUPERVISION AND REGULATION SR 06-11 July 28, 2006 TO THE OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL RESERVE BANK AND EACH DOMESTIC AND FOREIGN BANKING ORGANIZATION SUPERVISED BY THE FEDERAL RESERVE SUBJECT: Release of the Revised Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual The Federal Financial Institutions Examination Council (FFIEC) issued today a revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The revised manual reflects the ongoing commitment of the federal banking agencies and the Financial Crimes Enforcement Network (FinCEN) to provide current and consistent risk-based guidance for banking organizations to comply with the BSA and safeguard operations from money laundering and terrorist financing.1 The manual has been updated to further clarify supervisory expectations and incorporate regulatory changes since the manual's 2005 release. The attached statement from the federal banking agencies and FinCEN outlines the significant revisions and updates to the manual that include: risk assessment, automated clearing house transactions, trade finance activities, regulatory and supervisory guidance, emerging money laundering risks, and reformatting of the manual. As with the 2005 FFIEC BSA/AML Examination Manual, the revised manual does not set new standards; instead, it is a compilation of existing regulatory requirements, supervisory expectations, and sound practices in the BSA/AML area. To foster consistency, the manual includes the examination procedures that will be used by each agency's examiners and will be provided to state banking agencies. The manual underscores the importance of banking organizations effectively managing their BSA/AML risk (i.e., the risk of abuse by money launderers or terrorist financiers) by developing BSA/AML compliance programs tailored to their organizations' risk profiles. Similarly, banking organizations are expected to establish risk-based programs to comply with the requirements of the Office of Foreign Assets Control (OFAC). The development of strong, risk-based programs should enable banking organizations to assure effective risk management and efficient use of resources. In order to provide examiners the ability to tailor each examination to the profile of a specific banking organization, the manual uses a "core" and "expanded" format. The core sections are the foundation for all BSA/AML reviews. They include guidance and procedures for examination scoping and planning, and for reviewing the components of the BSA compliance program, other BSA/AML requirements, and policies and procedures to support compliance with the sanctions administered by OFAC.2 The expanded sections allow an examiner to tailor the examination scope by selecting procedures relevant to the risk profile of the banking organization. The expanded sections provide detailed guidance and discussions on specific lines of business, products, or entities that may present unique BSA/AML challenges and exposures for which banks should appropriately tailor policies, procedures, and processes. Importantly, the expanded procedures include a section on enterprise-wide BSA/AML compliance, which is increasingly important for large banking organizations that provide a wide variety of financial services. Federal Reserve examiners should begin using the examination procedures as set forth in the manual for all BSA/AML examinations beginning August 1, 2006. With the release of the manual, the 2005 FFIEC BSA/AML Examination Manual is now retired. Reserve Banks are asked to distribute this SR letter to the chief executive officers of domestic and foreign banking organizations supervised by the Federal Reserve, as well as to supervisory and examination staff. Questions concerning the FFIEC BSA/AML Examination Manual should be addressed to Bridget M. Spaniel, Senior Special Anti-Money Laundering Examiner, (202) 728-5827, or Suzanne L. Williams, Manager, BSA/AML Risk Section, (202) 452-3513. Roger T. Cole Acting Director Attachments: FFIEC BSA/AML Examination Manual Interagency Statement (22 KB PDF) Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation National Credit Union Administration Office of the Comptroller of the Currency Office of Thrift Supervision Financial Crimes Enforcement Network Supersedes: SR letter 05-12 Notes: 1. The federal banking agencies are the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision. In addition, through the Conference of State Bank Supervisors, the state banking agencies played a consultative role in the preparation of the revisions. Return to text 2. The federal banking agencies consulted with OFAC in the development of these sections of the manual. Return to text SR letters | 2006 Home | Banking information and regulation Accessibility | Contact Us Last update: September 1, 2006
@FedFRASER