Presentation is loading. Please wait.

Presentation is loading. Please wait.

FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Bank Secrecy Act, Anti-Money Laundering,

Similar presentations


Presentation on theme: "FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Bank Secrecy Act, Anti-Money Laundering,"— Presentation transcript:

1 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Bank Secrecy Act, Anti-Money Laundering, and OFAC Compliance IASA Central Illinois Spring Conference April 23,

2 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization History Bank Secrecy Act (1970) Money Laundering Control Act (1986) Anti-Drug Abuse Act of 1988 Annunzio-Wylie Anti-Money Laundering Act (1992) Money Laundering Suppression Act (1994) Money Laundering and Financial Crimes…(1998) 2001 – USA PATRIOT Act 2005 – Anti-Money Laundering for Insurance 2 FOR INTERNAL USE ONLY CONTAINS CONFIDENTIAL INFORMATION WHICH MAY NOT BE DISCLOSED WITHOUT EXPRESS WRITTEN AUTHORIZATION

3 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Bank Secrecy Act, Anti-Money Laundering and OFAC 3  The Bank Secrecy Act (BSA) is the primary U.S. anti-money laundering (AML) law. The BSA mandates recordkeeping and reporting requirements to help identify the source, volume, and movement of currency and other monetary instruments in or out of the U.S. or deposited in financial institutions. The BSA was amended to include the USA PATRIOT Act, which criminalizes the financing of terrorism.  There are Four Pillars of an effective Bank Secrecy Act / Anti-Money Laundering (BSA/AML) Compliance Program:  A system of internal controls to ensure ongoing compliance  Independent testing of BSA/AML compliance  Designation of an individual or individuals responsible for managing BSA compliance  Training for appropriate personnel  The Department of Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic sanctions against targeted foreign countries, regimes, terrorists, international narcotics traffickers, and persons engaged in activities related to the proliferation of weapons of mass destruction, among others.

4 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization BSA/AML and OFAC Regulatory Trends 4  Promoting a Culture of BSA/AML Compliance – FinCEN released Advisory FIN A007 to highlight the importance of a strong culture of BSA/AML compliance for the Board of Directors, senior management and leadership.  Regulatory authorities continue to issue enforcement actions including :  FINRA Fines Brown Brothers Harriman A Record $8 Million for Substantial Anti-Money Laundering Compliance Failures;  FinCEN Assesses $1 Million Penalty and Seeks to Bar MoneyGram Executive (CCO) from Financial Industry.  FinCEN Penalizes Pennsylvania Bank for Failing to Report Suspicious Activity Tied to Judicial Corruption.  The U.S. Department of the Treasury Office of Foreign Assets Control Announced a Settlement with PayPal, Inc. in the Amount of $7,658,300 for violations of US Sanctions.

5 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Board of Directors’ Responsibilities Ensure the presence of a comprehensive and effective AML/OFAC compliance program, including a governance and oversight framework reasonably designed to comply with relevant AML/OFAC laws and regulations, which may include the following:  A written Enterprise AML/OFAC Compliance Program.  Enterprise Policy - Anti-Money Laundering Compliance Enterprise Policy - Office of Foreign Assets Control Compliance.  Enterprise level AML and OFAC risk assessments.  Designate a qualified individual to serve as the Enterprise AML/OFAC Officer.  Ensure the AML/OFAC compliance functions have sufficient resources to effectively carry out their responsibilities.  Support senior management in maintaining a strong culture of compliance. 5

6 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Enterprise AML/OFAC Compliance Program  An effective Enterprise AML/OFAC Compliance Program includes written enterprise level policies to address Anti-Money Laundering Compliance and Office of Foreign Assets Control Compliance. Enterprise policies, combined with a written Enterprise Program that includes standards for the business lines, establishes a consistent and risk-based framework for compliance with AML and OFAC legal and regulatory requirements and expectations.  The objectives of an Enterprise AML/OFAC Compliance Program include:  Establish an AML/OFAC compliance policy management and governance structure across the organization;  Educate associates regarding requirements of AML/OFAC compliance;  Outline management and associate responsibilities and duties with respect to AML/OFAC compliance; and  Standardize and coordinate AML/OFAC compliance efforts throughout the enterprise. 6

7 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization AML Red Flags Lack of concern over investment performance, risks, or costs. Early surrender of life insurance. Policies with multiple insurers. Customer shows uncommon curiosity about internal systems and policies. Customer uses aliases and a variety of similar but different addresses. Customer is quick to volunteer that funds are "clean" or "not being laundered". Transaction is unnecessarily complex for its stated purpose. 7

8 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization AML Red Flags - continued A customer who refuses to provide information about his business or identity or avoids personal meetings. Larger cash deposits or purchases than expected from similar customers. Transactions that simply don’t make sense or don’t tie with customer’s business. Large or frequent transactions involving foreign banks or apparent shell corps. Unusual wire or other funds transfer activities. Any attempt to avoid reporting requirements. Activity and transactions like the "red flags" listed above may warrant attention. Although an activity may appear suspicious or would require a State Farm affiliate to file a report, it does not mean that the funds are associated with illicit activity. 8

9 FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization OFAC What is OFAC? What does OFAC do? What is the OFAC list or SDN list? Sanctions programs are constantly evolving. How do you comply with OFAC? Penalties for non-compliance. 9


Download ppt "FOR INTERNAL STATE FARM USE ONLY Contains information that may not be disclosed outside State Farm without authorization Bank Secrecy Act, Anti-Money Laundering,"

Similar presentations


Ads by Google