5. After applying the customer
identification program, and confirming registration, licensing, and
agent status, as applicable, and when a banking organization’s risk
assessment of a money-services-business customer indicates a low risk
of money laundering or other illicit activity for the particular customer,
is a banking organization required to perform further due diligence?
No. After assessing basic information of a particular
money-services-business customer, including (1) the products and services
offered by the money-services business; (2) the locations and markets
served by the money-services business; (3) anticipated account activity;
and (4) purpose of the account, if a banking organization determines
that its relationship with the particular money-services business
constitutes a low risk of money laundering or other illicit activity,
a banking organization is not routinely expected to perform further
due diligence. Banking organizations should consider and perform further
due diligence, such as a review of a money-services business’s anti-money
laundering program, if the banking organization’s risk assessment
of a relationship with a particular money-services business indicates
heightened risks.
However, banking organizations are reminded that risk-based
monitoring of all accounts, regardless of the amount of due diligence
performed for a particular customer, is a key element of an effective
system to identify, and where appropriate, report suspicious activity.
Discovery of suspicious activity in transactions with a money-services
business initially deemed to represent low risk may necessitate further
due diligence.
6. Can a banking organization
open or maintain an account for a money-services business that has
not registered or obtained a state license because the customer was
unaware of applicable requirements? Should a banking organization
file a suspicious-activity report in such instances?
Yes. Banking organizations are not required to refuse
to open new accounts for money-services businesses that have failed
to comply with registration or licensing requirements. Similarly,
there is no requirement in the Bank Secrecy Act regulations that a
banking organization terminate existing accounts of customers based
solely on the discovery that the customer is a money-services business
that has failed to comply with licensing and registration requirements.
The decision to maintain or close an account should be made by a banking
organization’s management under standards and guidelines approved
by its board of directors.
However, continued noncompliance by a customer with applicable
licensing, registration, or other regulatory requirements after learning
of such requirements would likely be an indicator of heightened risk.
Banking organizations should file suspicious-activity reports if they
become aware that customers are operating in violation of the registration
or state licensing requirements.
7. Do FinCEN
and the federal banking agencies have an expectation that banking
organizations should educate money-services businesses about any requirements
of the Bank Secrecy Act?
No. The Bank Secrecy
Act does not require, and neither FinCEN nor the federal banking agencies
expect, banking organizations to serve as the de facto regulators
of the money-services businesses for which they maintain accounts.
Accordingly, banking organizations are not expected to educate money-services
businesses about the Bank Secrecy Act requirements that apply to the
industry. However, when a banking organization is conducting due diligence
with respect to its money-services-business customers, questions will
inevitably arise. In such cases, banking organizations can direct
inquiries by money-services businesses about applicable Bank Secrecy
Act requirements to existing regulatory resources such as www.msb.gov
or FinCEN’s Regulatory Helpline at 1-800-949-2732.
In addition, there are several ways for banking
organizations to obtain free educational materials produced by FinCEN
for money-services businesses:
- Submit an online order form through www.msb.gov (fastest
option).
- Print an order form from www.msb.gov and fax to 1-800-773-8356
or mail to: Money Services Business Program Office
P.O. Box 39 Vienna, VA 22183
- Phone an order to 1-800-386-6329.
Interagency guidance of April 26, 2005 (SR-05-8).