On August 11, 2014, in response to shortcomings identified in recent anti-money laundering (“AML”) enforcement actions, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued FIN-2014-A007, Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance (the “Advisory”). The Advisory provides general principles that FinCEN believes all financial institutions should utilize to improve and strengthen organizational compliance with Bank Secrecy Act (“BSA”) obligations.
The Advisory specifically highlighted six factors that a financial institution should ensure in its efforts toward establishing and maintaining a culture of AML compliance:
- Its leadership actively supports and understands compliance efforts;
- Efforts to manage and mitigate BSA/AML deficiencies and risks are not compromised by revenue interests;
- Relevant information from the various departments within the organization is shared with compliance staff to further BSA/AML efforts;
- The institution devotes adequate resources to its compliance function;
- Its compliance program is effective by, among other things, ensuring that it is tested by an independent and competent party; and
- Its leadership and staff understand the purpose of its BSA/AML efforts and how its reporting is used.
It is important that financial institutions incorporate the Advisory’s guidance in a manner that is commensurate with their risk profile and business model. Indeed, on August 12, 2014, Jennifer Shasky Calvery, Director of FinCEN, delivered keynote remarks at the 2014 Mid-Atlantic AML Conference, where she stated, “… to be truly effective, every financial institution needs to consider its own products and practices, assess its own risks, and develop a program that works best for the particular financial institution to mitigate its unique risks.”
The following is a link to the Advisory, which provides a more in-depth discussion on each of the six factors: http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2014-A007.pdf.
The following is a link to Director Jennifer Shasky Calvery’s remarks at the 2014 Mid-Atlantic AML Conference on August 12, 2014:http://www.fincen.gov/news_room/speech/pdf/20140812.pdf.