Appendix To Office of the Comptroller of the Currency Report to the Subcommittee on Financial Institutions April 14, 1986 1. Revised BSA Examination Procedures. 2. Comptroller's Manual for National Banks. BSA implementing regulations, 31 C.F.R. Part 103. 3. Banking Circulars a. b. c. d. e. f. g. h. Banking Circular 193, dated April 24, 1985 - reminds bank management of its ongoing responsibility to Banking Circular 193, Supplement 1, dated May 9, 1985 Banking Circular 193, Supplement 2, dated July 5, 1985 Banking Circular 193, Supplement 3, dated January 27, 1986 Banking Circular 193, Supplement 4, dated March 27, 1986 Banking Circular 207, dated September 18, 1985 - transmits the Criminal Referral Form. Banking Circular 171 and Supplements dated January 3, 1985 Banking Circular 141 and Supplements dated May 3, 1980 - advises banks of "advance fee schemes" by fraudulent brokers. - 2 4. 5. 6. 7. Examining Circular 228, dated April 24, 1985 sets out guidelines for ensuring that national banks and federal branches and agencies comply with the Bank Secrecy Act. Banking Bulletins a. b. Banking Bulletin 85-27, dated December 20, 1985 - transmits copy of IRS press release regarding the revised Form 4789. Banking Bulletin 86-9, dated April 9, 1986 - outlines procedure for correction and resubmission of Employee Newsletter Articles a. b. c. d. e. Bank Supervision Newsletter, dated July, 1985 discusses ramification of BSA for trust departments. Bank Supervision Newsletter, dated August, 1985 discusses changes to 31 CFR 103 promulgated through August, 1985. Bank Supervision Newsletter, dated October, 1985 - provides information relative to referring BSA violations to the Treasury Department. SuperVision, dated February, 1986 discusses IRS responsibilities for exemption lists. SuperVision, dated March, 1986 - provides IRS contact numbers for BSA inquiries. designed to make report filing more efficient for banks and more useful for law enforcement agencies in identifying patterns of criminal activity and apprehending persons who commit crimes involving national banks. MEMORANDUM To From Date Subject Comptroller of the Currency Administrator of National Banks Washington, D. C. 20219 David D. Queen. Deputy Assistant Secretary (Enforcement and Operations) John F. Downey. Chief National Bank Examiner mey March 27, 1986 Revised Bank Secrecy Act Examinations Procedures Over the past several months, representatives of the Office of With the exception of the NCUA, who is continuing to evaluate Enclosed, for your use, is a copy of the revised procedures. If Enclosure cc: Richard Schrieber, Board of Governors of the Federal Reserve Michael Bianchetta, Federal Deposit Insurance Corporation Cynthia Graae, Federal Home Loan Bank Board Hattie Ulah, National Credit Union Administration Brian Bruh, Internal Revenue Service Bill Landreth, Department of the Treasury Financial Recordkeeping and Reporting Regulations Introduction General In As a means to detect the incidence of money laundering, for any of a multitude of illicit activities, the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Reporting Act, the Bank Secrecy Act, was enacted October 26, 1970. Among other things, the Act allows the Department of the Treasury (Treasury) to delegate certain compliance responsibilities to other governmental agencies. an effort to ensure compliance with the Act by bank and nonbank financial institutions, Treasury delegated supervisory authority to the financial institution regulators. Different methods are available for selecting financial institutions for examination. These include: о Scheduled examinations - an identified core group of institutions which will be examined on a regular basis. Targeting identifying financial institutions for special investigations based upon analyses of financial or other data, and/or о Sampling selecting institutions for examination by Each regulatory agency has its own policy which addresses the examination schedule. The use of the above methods is determined independently by each agency. Procedural The following procedures for testing compliance with Financial Recordkeeping and Reporting Regulations (Bank Secrecy Act), 31 CFR 103, are set forth in two separate modules which are progressively extensive in scope. The first module includes "stops" which provide the examiner with the opportunity to determine whether the examination can be concluded or whether the examiner should continue. Module I requires the examiner to establish that the examined institution has appropriate operating and auditing standards. In addition, it requires the examiner to conduct a detailed review of the institution's internal audit function and entails the examination of procedures and selected workpapers, reports and responses. The review of auditing methodology and implementation enables the examiner to determine the scope of the examination. Module II sets forth guidelines for the examiner in conducting a review of a sample of actual transactions and related documentation. |