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11/20/2020

FinCEN and Federal Banking Agencies Clarify BSA Due Diligence Expectations for Charities and Non-Profit Customers …

FinCEN and Federal Banking Agencies Clarify BSA Due Diligence
Expectations for Charities and Non-Profit Customers
November 19, 2020

WASHINGTON—In coordination with the Federal Banking Agencies, the U.S. Department of
the Treasury’s Financial Crimes Enforcement Network (FinCEN) today issued a joint fact sheet
to provide clarity to banks on how to apply a risk-based approach to charities and other
non-profit organizations (NPOs).
The joint fact sheet highlights the importance of ensuring that legitimate charities have
access to financial services and can transmit funds through legitimate and transparent
channels, especially during the current COVID-19 pandemic. Also, the joint fact sheet
reminds banks to apply a risk-based approach to customer due diligence (CDD) requirements
when developing the risk profiles of charities and other non-profit customers. The fact sheet
rea irms that the application of a risk-based approach is consistent with existing CDD and
other Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance requirements.
More broadly, the U.S. government does not view the charitable sector as presenting a
uniform or unacceptably high risk of being used or exploited for money laundering, terrorist
financing, or evasion of sanctions. This perspective is in line with the standards of the
Financial Action Task Force (FATF), which is the AML/countering the financing of terrorism
(CFT) and proliferation international standard setting body, with whose standards 205
countries around the world have agreed to comply. Although some charities and other NPOs
have been misused to facilitate terrorist financing, the U.S. government recognizes that most
charities and other NPOs fully comply with the law and properly support only charitable and
humanitarian causes. This is consistent with the findings included in the 2020 National
Strategy for Combatting Terrorist and other Illicit Financing
(https://home.treasury.gov/system/files/136/National-Strategy-to-Counter-IllicitFinancev2.pdf

) and the 2018 National Terrorist Financing Risk Assessment

(https://home.treasury.gov/system/files/136/2018ntfra_12182018.pdf

), published by the

Treasury Department in February 2020 and December 2018, respectively. Further, given the
current COVID-19 pandemic, the U.S. Treasury Department has also committed to ensuring
https://home.treasury.gov/news/press-releases/sm1183

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11/20/2020

FinCEN and Federal Banking Agencies Clarify BSA Due Diligence Expectations for Charities and Non-Profit Customers …

the international flow of humanitarian aid continues through legitimate and transparent
channels. See https://home.treasury.gov/news/press-releases/sm969.
“The U.S. Department of the Treasury recognizes the important role played by the charitable
sector, especially during the COVID-19 pandemic, as it supports communities and provides
life-saving assistance,” said Deputy Secretary of the Treasury Justin G. Muzinich.
FinCEN Director Kenneth A. Blanco noted, “FinCEN appreciates the critical role of those
charities and NPOs who are on the front lines of the COVID-19 pandemic. FinCEN
demonstrates in this communication our joint resolve and the importance of ensuring their
access to banking services, while at the same time protecting our national security, keeping
our citizens safe from harm, and safeguarding our financial system.”
The U.S. Department of the Treasury is committed to working with the private sector,
including financial institutions and non-profit organizations, to provide guidance and
clarification on AML/CFT and sanctions obligations relevant to the charitable sector.
The fact sheet does not alter existing BSA/AML legal or regulatory requirements or establish
new supervisory expectations. It was developed with the Federal Reserve Board, the Federal
Deposit Insurance Corporation, the National Credit Union Administration, and the O ice of
the Comptroller of the Currency.

https://home.treasury.gov/news/press-releases/sm1183

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