(a) Anti-money laundering program requirement.
(1) Each dealer shall develop and implement
a written anti-money laundering program reasonably designed to prevent
the dealer from being used to facilitate money laundering and the
financing of terrorist activities through the purchase and sale of
covered goods. The program must be approved by senior management.
A dealer shall make its anti-money laundering program available to
the Department of Treasury through FinCEN or its designee upon request.
(2) To the extent that
a retailer’s purchases from persons other than dealers and other retailers
exceeds the $50,000 threshold contained in section 1027.100(b)(2)(i),
the anti-money laundering compliance program required of the retailer
under this paragraph need only address such purchases.
(b) Minimum requirements. At a minimum, the anti-money laundering program shall:
(1) Incorporate policies, procedures, and
internal controls based upon the dealer’s assessment of the money
laundering and terrorist financing risks associated with its line(s)
of business. Policies, procedures, and internal controls developed
and implemented by a dealer under this section shall include provisions
for complying with the applicable requirements of the Bank Secrecy
Act (31 U.S.C. 5311 et seq.), and this chapter.
(i) For
purposes of making the risk assessment required by paragraph (b)(1)
of this section, a dealer shall take into account all relevant factors
including, but not limited to:
(A) The type(s) of products the
dealer buys and sells, as well as the nature of the dealer’s customers,
suppliers, distribution channels, and geographic locations;
(B) The extent to which the dealer
engages in transactions other than with established customers or sources
of supply, or other dealers subject to this rule; and
(C) Whether the dealer engages
in transactions for which payment or account reconciliation is routed
to or from accounts located in jurisdictions that have been identified
by the Department of State as a sponsor of international terrorism
under 22 U.S.C. 2371; designated as non-cooperative with international
anti-money laundering principles or procedures by an intergovernmental
group or organization of which the United States is a member and with
which designation the United States representative or organization
concurs; or designated by the Secretary of the Treasury pursuant to
31 U.S.C. 5318A as warranting special measures due to money laundering
concerns.
(ii) A dealer’s program shall incorporate
policies, procedures, and internal controls to assist the dealer in
identifying transactions that may involve use of the dealer to facilitate
money laundering or terrorist financing, including provisions for
making reasonable inquiries to determine whether a transaction involves
money laundering or terrorist financing, and for refusing to consummate,
withdrawing from, or terminating such transactions. Factors that may
indicate a transaction is designed to involve use of the dealer to
facilitate money laundering or terrorist financing include, but are
not limited to:
(A) Unusual payment methods, such as the use
of large amounts of cash, multiple or sequentially numbered money
orders, traveler’s checks, or cashier’s checks, or payment from third
parties;
(B) Unwillingness
by a customer or supplier to provide complete or accurate contact
information, financial references, or business affiliations;
(C) Attempts by a customer or
supplier to maintain an unusual degree of secrecy with respect to
the transaction, such as a request that normal business records not
be kept;
(D) Purchases
or sales that are unusual for the particular customer or supplier,
or type of customer or supplier; and
(E) Purchases or sales that are not in conformity
with standard industry practice.
(2) Designate a compliance
officer who will be responsible for ensuring that:
(i) The
anti-money laundering program is implemented effectively;
(ii) The anti-money laundering
program is updated as necessary to reflect changes in the risk assessment,
requirements of this chapter, and further guidance issued by the Department
of the Treasury; and
(iii) Appropriate personnel are trained in accordance with paragraph
(b)(3) of this section.
(3) Provide for on-going education and
training of appropriate persons concerning their responsibilities
under the program.
(4) Provide for independent testing to monitor and maintain an adequate
program. The scope and frequency of the testing shall be commensurate
with the risk assessment conducted by the dealer in accordance with
paragraph (b)(1) of this section. Such testing may be conducted by
an officer or employee of the dealer, so long as the tester is not
the person designated in paragraph (b)(2) of this section or a person
involved in the operation of the program.
(c) Implementation date. A dealer must develop and implement an anti-money laundering program
that complies with the requirements of this section on or before the
later of January 1, 2006, or six months after the date a dealer becomes
subject to the requirements of this section.
