On June 30, 2016, the New York State Department of Financial Services (NYDFS) adopted a final rule imposing new anti-money laundering (AML) and economic sanctions requirements on banks and other financial institutions regulated by the agency.
The rule applies to: (1) banks, trust companies, private bankers, savings banks, and savings and loan associations chartered under the New York Banking Law; (2) all branches and agencies of foreign banking corporations licensed under the Banking Law to operate in New York; and (3) check cashers and money transmitters licensed under the Banking Law (collectively, Regulated Institutions).
The rule requires Regulated Institutions to:
- Maintain a “Transaction Monitoring Program” that is “reasonably designed” for post-transaction detection of violations of AML laws and to allow appropriate filing of suspicious activity reports as required under the Bank Secrecy Act (BSA).
- Maintain a “Filtering Program” reasonably designed to interdict transactions prohibited by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).
- Provide an annual board resolution, or finding by one or more “senior officers,” that the Regulated Institution complies with all Transaction Monitoring and Filtering Program requirements.
For more information on this new rule, please see Crowell’s Client Alert.