What is the Bank Secrecy Act?
The Bank Secrecy Act (BSA) is the United States of America’s most crucial anti-money laundering regulation. The US Bank Secrecy Act (BSA) is being implemented in 1970 and still continues to be one of the most crucial sources of regulation for American and global financial systems with wide-ranging effects across the sector. While BSA serves as a primary tool to obligate financial institutions to aid the government in efforts to fight money laundering and other financial crimes. Since it’s implementation, it’s being amended several times and it’s roles in money laundering and financing of terrorism is shared with the USA Patriot Act.
The BSA is intended to fight against money laundering and to ensure that banks and financial institutions are not used as tools to facilitate it. Under the BSA, institutions have to work to detect and monitor potential money laundering activities and report them to authorities to enforce activities.
The Bank Secrecy Act is administered by the Financial Crimes Enforcement Network (FinCEN) which imposes a variety of obligations to financial institutions. To meet those obligations, senior management must make sure that they have a full understanding of the legislation itself.
What is the role of the compliance officer?
The compliance officer follows the regulations concerning the company. They are the most effective people in protecting the company from financial crimes. A compliance officer is responsible for controlling everyone involved with the company. It is obliged to provide evidence during the audit. Compliance officers use compliance software such as Sanction Scanner when checking. A principal should be appointed to oversee the development and application of their institution’s program. Additionally, providing oversight for internal controls, the Compliance Officer’s responsibility is to arrange independent auditing and analyzing their institutions’ AML compliance program.
What you should know about BSA Compliance
Currency Transaction Reports (CTR): Currency transaction reports have to be filed for cash transactions above $10,000. This demand concerns only the physical exchange of money (cash and paper) between parties.
Suspicious Activity Reports (SAR): A report that should be made from a financial institution, such as a bank, credit union, or money services, if firms believe that a customer's behavior is suspicious.
Foreign Bank and Financial Account Report (FBAR): An annual filing demand for individuals holding accounts with foreign banks equal to or above than $10,000. While the FBAR is generally filed by the account-holder, financial professionals filing on behalf of a client has to register the file as an institution.
Why is the Bank Secrecy Act Compliance Important?
The BSA demands financial institutions to maintain detailed records of all transactions, file reports regarding all transactions, currency exchanges and the transportation of certain monetary instruments more than $10,000. Those requirements were intended to increase the difficulty of engaging successfully in money laundering and the financing of terrorism.
Individuals and financial institutions that fail to satisfy BSA requirements can face severe penalties that include up to tens of thousands of dollars to hundreds of millions or billions of dollars and for more severe offenses, prison sentences can go up to five years to 20 years.
Sanction Scanner is an AML compliance software. With the Sanction Scanner compliance software, you can easily comply with global and local regulations. Please contact us for more information.