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.
Amongst other provisions; the BSA demands financial institutions to maintain detailed records of all transactions, file reports (Currency Transaction Reports [CTRs] or Report of International Transportations of Currency or Monetary Instruments [CMIRs]) regarding all transactions, currency exchanges and the transportation of certain monetary instruments more than $10,000 (may reach within a single transaction or transfer of a series that appears to be linked) and notifying the government of all transactions that appears as suspicious regardless of the amount. Additionally, all financial institutions have to create Monetary Instrument Logs (MLIs) for purchases of monetary institutions such as money orders, cashier’s checks and traveler’s checks totaling around $3,000 to $10,000. those requirements were intended to increase the difficulty of engaging successfully in money laundering, tax evasion and 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.