FinCEN issued an advisory (FIN-2014-A007) to financial institutions on promoting a culture of BSA/AML compliance for senior management, leadership and owners of all financial institutions subject to FinCEN regulation, regardless of size or industry sector. The guidance outlines the following six ways that financial institutions can strengthen their BSA/AML compliance culture: by ensuring that (1) its leadership actively supports and understands compliance efforts; (2) efforts to manage and mitigate BSA/AML deficiencies and risks are not compromised by revenue interests; (3) relevant information from the various departments within the organization is shared with compliance staff to further BSA/AML efforts; (4) the institution devotes adequate resources to its compliance function; (5) the compliance program is effective by, among other things, ensuring that it is tested by an independent and competent party; and (6) its leadership and staff understand the purpose of its BSA/AML efforts and how its reporting is used.
Meanwhile, FinCEN issued another advisory to financial institutions regarding the Financial Action Task Force’s (FATF) updated list of jurisdictions with strategic AML/CFT deficiencies. Changes to this list may affect U.S. financial institutions’ obligations and risk-based approaches with respect to jurisdictions subject to FATF’s countermeasures or enhanced due diligence, as well as jurisdictions FATF identified AML/CFT deficiencies.
By directing the advisory to senior management, FinCEN’s message is clear: banks must foster a strong underlying BSA/AML institutional ideology in an effort to minimize addressing compliance issues after-the-fact. However, the high cost of ongoing compliance remains the predominant counter-force, especially smaller financial institutions with limited resources.