1. 1 Financial Crimes Enforcement Network “FinCEN” Anna Fotias Senior Regulatory Compliance Specialist Office of Regulatory Policy 202-354-6400 Anna.Fotias@fincen.gov Anti-Money Laundering (AML) Compliance Delaware On-Line Agents Meeting February 1, 2005

2. 2 Financial Crimes Enforcement Network “FinCEN” The following material constitutes the work of public employees and is in the public domain. Therefore, it is not subject to copyright or the exercise of proprietary rights on your behalf. Nothing in this language should be construed to limit the public’s rights and access to this material under 17 U.S.C. §§ 101, 105.

3. 3 FinCEN Mission Statement To safeguard our financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity BY:  Administering the Bank Secrecy Act;  Supporting law enforcement, intelligence, and regulatory agencies through sharing and analysis of financial intelligence;  Building global cooperation with our counterpart financial intelligence units; and  Networking people, ideas, and information.

4. 4 FinCEN Organization 2005 Director Deputy Director Chief of Staff Associate Director (Regulatory Policy, Programs & Enforcement) Associate Director (Administration & Communications) (CFO) Associate Director (Analysis) Associate Director (Client Liaison & Services) (CIO) Chief Counsel EEO/Diversity Manager Security Officer Regulatory Policy Regulatory Programs Strategic Tactical Data Retrieval, Statistics & Reporting Information Technology International Outreach & Coordination Liaison, Education & Training Systems

5. 5 Regulatory Policy and Programs Division Compliance Regulatory Policy Enforcement

6. 6 Responsibilities  Issues BSA regulations in key financial sectors  Identifies issues and areas of concern regarding existing BSA regulations  Provides interpretive guidance to clarify BSA regulations  Educates and trains financial institutions, regulatory and law enforcement partners  Facilitates the Bank Secrecy Act Advisory Group  Develops and administers BSA forms

7. 7 Bank Secrecy Act – Historical Time Line 1970 – Congress enacts the Bank Secrecy Act 1986 – Money Laundering Control Act criminalizes money laundering and prohibits structuring 1990 – FinCEN created 1994 – FinCEN given the responsibility to administer the BSA 1996 – Depository institutions begin filing SARs 2001 – Congress enacts the USA PATRIOT Act

8. 8  Securities Broker/Dealers  Futures Commission Merchants/Introducing Brokers  Mutual Funds  Banks, Thrifts, Credit Unions  Casinos/Card Clubs  Money Services Businesses  Operators of Credit Card Systems Bank Secrecy Act Jurisdiction

9. 9  Insurance Companies  Unregistered Investment Companies (UICs)  Dealers in Precious Metals, Stones, Jewels  Commodity Trading Advisors (CTAs)  Registered Investment Advisers (RIAs)  Businesses Engaged in Vehicle Sales  Travel Agencies  Persons Involved in Real Estate Closings and Settlements Other Financial Industries That May Become Subject to the BSA

10. 10 Anti-Money Laundering (AML) Compliance Program AML Programs must be in writing and must:  Include policies, procedures and internal controls  Designate compliance officer  Provide ongoing education/training  Provide periodic, independent review/audit

11. 11 SAR Data Quality SAR Narratives should: Provide a detailed description of the suspicious activity Identify “who,” “what,” “when,” “why,” and sometimes “how” Be chronological and complete Identify dates of any previously filed SARs on the same subject Note any actions (taken or planned), including any internal investigative numbers used to maintain records of the SAR Include information on persons to contact for additional information/documentation about the suspicious activity

12. 12 Regulatory Policy & Programs Division Compliance Regulatory Policy Enforcement

13. 13  Provides support for regulatory agencies that examine financial institutions for BSA/AML compliance –Formulates examination best practices across industries –Provides training to BSA/AML examiners –Tracks the performance of financial institutions experiencing significant BSA compliance deficiencies –Analyzes examination, BSA and other data to identify activities or financial institutions that may require further review –Identifies trends in BSA/AML compliance deficiencies and violations  Monitors and assesses the level of BSA compliance across industries  Communicates with industry representatives, regulatory partners and law enforcement concerning patterns and trends in BSA deficiencies and violations Responsibilities

14. 14 Regulatory Policy & Programs Division Compliance Regulatory Policy Enforcement

15. 15 Financial Institutions  to sanction egregious violations  to obtain corrective action  to deter future non-compliance Financial Industry  to educate and provide guidance  to deter non-compliance Enforcement Objectives

16. 16 BSA Civil Penalties (Willful) Currency Transaction Reports (CTRs) $25,000 to $100,000 per violation AML Compliance Program $25,000 per day Suspicious Activity Reports (SARs) $25,000 to $100,000 per violation Record-keeping $1,000 per violation Report of Foreign Financial Accounts (FBARs) $25,000 to $100,000 per violation Structuring Dollar Amount Involved in Transactions $10,000 Received by Trade or Business (8300s) $25,000 to $100,000 per violation International Counter- Money Laundering Provisions 2X Transaction Dollar Amount to $1M

17. 17 BSA Civil Penalties (Negligent)  Negligence - $500 per violation  Pattern of negligent activity - $50,000

18. 18 BSA Criminal Penalties General 5 Years Imprisonment $250,000 Fine Pattern of Illegal Activity 10 Years Imprisonment $500,000 Fine

19. 19 Information and Guidance FinCEN’s Web Site:  Consumer Alerts  Frequently Asked Questions  Interpretive Rulings  Industry Regulations  SAR Activity Reviews  National Money Laundering Strategy FinCEN’s Regulatory Helpline: 1-800-949-2732 www.fincen.gov

20. 20 Regulatory Helpline 1-800-949-2732 Financial Institutions Hotline* 1-866-556-3974 *The Financial Institutions Hotline should only be used to report suspected instances of recent or ongoing terrorist financing or money laundering activities. FinCEN Resources