The FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual has undergone a number of changes in 2020 and 2021 thus far. It was most recently updated on February 25, 2021, and again on June 21, 2021. Overall, the revisions include more detailed instructions for examiners as they examine a bank’s BSA/AML compliance program. The instructions provide transparency for examiners as they assess a bank’s compliance with BSA regulatory requirements.
Some of the key updates which have been made to the FFIEC BSA/AML Examination Manual in 2021 include:
- Assessing Compliance with BSA Regulatory Requirements – this section of the examination manual was updated to provide a high-level overview of how examiners should complete their scope and plan for examinations. The updates also encourage examiners to focus on the actual processes followed by bank in addition to their policies and procedures.
- Customer Identification Program – this section of the examination manual was updated to include guidance for opening accounts for customers who have applied for a tax identification number, but who have not yet received. It also clarifies the expectation for the procedures that banks are expected to follow when making and maintaining a record of a customer’s identity. A new subsection was also added which provides guidance to examiners regarding “exemptions”.
- Currency Transaction Reporting – this section of the examination manual was updated to provide clearer descriptions for aggregation requirements. Guidance is also added which addresses “structured transactions” and “identification required”. These updates also clarify the expectations that banks must follow when receiving errors subsequent to filing CTRs, back filing, and amending CTRs.
- Transaction of Exempt Persons – this section of the examination manual was updated to reaffirm the expectations for banks to conduct an annual review of exemption eligibility for customers who were previously exempt from CTR reporting. This section also provided guidance which expands the type of customer for which the bank is not required to confirm eligibility for exemption. A new “operating rules” subsection was added to this section, and clarification was provided regarding the bank’s obligations for recordkeeping and reporting requirements as it relates to other regulations.
- International Transportation of Currency or Monetary Instruments Reporting – this section of the examination manual was updated to outline the regulatory requirements for banks regarding international transportation of currency or monetary instruments including the bank’s obligation to complete a Report of International Transportation of Currency or Monetary Instruments (CMIR).
- Purchase and Sale of Monetary Instruments Recordkeeping – this section of the examination manual was updated to provide clear guidance regarding the regulatory recordkeeping requirements banks must comply with and the limitations banks must follow for the purchase or sale of monetary instruments.
- Reports of Foreign Financial – this section of the examination manual further explains the reporting requirements and filing instructions regarding the required Report of Foreign Bank and Financial Accounts (FBAR), which must be filed for certain foreign transactions.
- Special Measures – this section of the manual was updated to provide more transparent guidance regarding five special measures which must be imposed, individually, jointly or in any combination.
It is important to note that while there have been a number of updates to the FFIEC BSA/AML Examination Manual, the manual itself does not establish any new requirements for financial institutions. Also, financial institutions should not interpret the updates as new instructions or as new or increased areas of focus for BSA/AML Examinations. These updates are considered further transparency into the examination process and should aid examiners in the support of risk-focused examination work.