OFAC Spells Out BSA/AML Enforcement Measures

WASHINGTON-Treasury’s Office of Foreign Assets Control recently issued guidelines explaining the sanctions for Bank Secrecy Act and anti-money laundering violations. Economic Sanctions Enforcement Procedures for Banking Institutions Regulated by FFIEC-member Supervisory Agencies, which was published in the Federal Register Jan. 12, works hand-in-hand with the Federal Financial Institutions Examination Council’s Bank Secrecy Act Anti-Money Laundering Examination Manual, published in June. NCUA is a member of the FFIEC. OFAC calls the guideline’s enforcement approach “institutional-rather than transactional.” It takes into account the risk-based efforts financial institutions make to ensure compliance. “As the administrator of U.S. economic sanctions, OFAC emphasizes in these internal procedures that the primary goal of enforcement actions is to promote more effective compliance within the particular institution, as well as throughout the industry,” OFAC Director Robert Werner said. “OFAC recognizes the uniqueness of every institution’s compliance program and how each program must be geared toward the size of a bank’s accounts, its business volume, its customer base, and its product lines.” OFAC will notify the regulators of its concerns and the regulators, in turn, will share their respective institutions’ evaluations with OFAC. OFAC will review for apparent violations periodically “in the context of each institution’s overall OFAC compliance program and specific OFAC compliance record.” These reviews will include: *The opinion of a bank’s primary federal regulator; *The institution’s history of OFAC compliance; *The circumstances surrounding any apparent violation, including any patterns or weaknesses in an institution’s compliance program and whether those weaknesses indicate negligence or fundamental flaws; *Whether violations were voluntarily disclosed; *Enforcement information provided by the institution to OFAC; *The number of transactions or accounts that the institution handled improperly during the period under review and its responses to OFAC administrative subpoenas; *The number of transactions successfully blocked or rejected by the bank during the period; and *The actions taken by the bank to correct any violations and to ensure that similar violations do not recur. OFAC will then contact the institution with a preliminary assessment. Upon a final decision, OFAC will notify the institution in writing and provide a copy of the evaluation letter to the appropriate financial regulator. If OFAC notifies the institution it intends to pursue a civil penalty, the existing civil penalty procedures, including the opportunity for settlement, will be followed. The guidelines become final Feb. 13, but OFAC is seeking comments through March 13. Comments can be submitted to The Federal eRulemaking Portal (http://www.regulations.gov) and OFAC’s Web site (http://www. treas.gov/offices/enforcement/ofac/comment.shtml). The guidelines are available at http://www.treas. gov/offices/enforcement/ofac/legal/regs/fr71_1971.pdf. -