The BSA/AML Examination Manual for Money Services Businesses provides additional 7. of the Currency’s (OCC) “heightened expectations” on Bank Secrecy Act/anti-money laundering (BSA/AML) independent testing functions, and to identify steps to effectively manage regulatory expectations while providing effective assurance over BSA/AML compliance. Notably, “[i]f the bank’s independent testing is adequate, findings from the independent testing may be leveraged to reduce the examination areas covered and the testing necessary to assess the bank’s BSA/AML compliance program.” (b) Independent testing, pursuant to Rule 3310(c), must be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations.


The basic elements of such programs were to include: (i) a system of internal policies, procedures and controls; (ii) the designation of an AML Compliance Officer responsible for implementing and monitoring the day-to-day operations and internal controls of the program; (iii) ongoing employee training; and, (iv) independent testing of the AML Program. The OCC prescribes regulations, conducts supervisory activities and, when necessary, takes enforcement actions to ensure that national banks have the necessary controls in place and provide the requisite notices to law enforcement to deter and detect money laundering, terrorist financing and other criminal acts and the misuse of our nation's financial institutions. 2 Introduction and Overview The ank Secrecy Act and related federal and state law requirements (“SA/AML”) are a crucial component of money services businesses (“MS” or “MSs”) operations. The review will encompass the bank’s BSA / AML / OFAC risk assessment, policies, procedures, and processes and include the following: Compliance with institutional controls and procedures is tested utilizing several methods, including off-site/on-site inspection, document evaluation, and transaction testing. For BSA software, the question of what constitutes a model can be a bit gray. While the frequency of this audit is not specifically defined in any statute, a sound practice is for the financial institution to conduct independent testing every 12 to 18 months, commensurate with the BSA/AML risk profile of the bank. Independent Testing of AML Monitoring – FINRA also observed that some firms did not ensure the independent testing required under FINRA Rule 3310(c) included a review of how the firm’s AML program was implemented. The Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) review will be an independent review of the bank’s BSA / AML program, including requirements for the Office of Foreign Assets Control (OFAC). While the frequency of this audit is not specifically defined in any statute, a sound practice is for the financial institution to conduct independent testing every 12 to 18 months, commensurate with the BSA/AML risk profile of the bank. i) BSA/AML Compliance Officer and Staffing ii) Internal Controls iii) AML Training iv) Independent Testing v) Consumer Due Diligence and Beneficial Ownership For more details, please see the appended Compliance Supplement. AML Audit Services is an Anti-Money Laundering consulting firm, comprised of certified AML specialists with an expertise in independent testing. Completion of independent testing for BSA/AML compliance is one of the original pillars of a financial institution’s BSA program. AML Independent Testing, Audit … BSA independent testing Our independent testing services determine adequacy, completeness, and reasonableness based on your BSA/AML program’s size and complexity. However, many institutions don’t know what a model is, let alone when an independent third-party validation is required. The manual further provides procedures and guidance for assessing the adequacy of an institution’s BSA/AML compliance programme. procedures that will need to be performed depend on the BSA/AML risk profile of the MSB, the quality and quantity of independent testing, the MSB’s history of BSA/AML compliance, and other relevant factors. According to the FFIEC press release, additional revisions to other parts of the manual will be … Independent AML Testing of Introducing Broker-Dealers Author: Gina Storelli, CAMS-Audit In October of 2001, the United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (“USA PATRIOT” or “PATRIOT”) Act was enacted by Congress in response to the September 11, 2001 terrorist attacks.