Introductory BSA/AML Examiner School, Providence, RI

F I N C E N G U I D A N C E

remain liable under the rules for the existence of these respective policies, procedures, and controls. Moreover, each MSB remains independently and wholly responsible for implementing adequate AML program requirements. 7 Accordingly, neither the agent nor the principal can avoid liability for failing to establish and maintain an effective AML program by pointing to a contract assigning this responsibility to another party (whether the agent or principal).

Under 31 CFR § 1022.210, an MSB’s AML program must, at a minimum: •• Incorporate policies, procedures, and internal controls reasonably designed to assure compliance with the BSA and its implementing regulations •• Designate a person to assure day to day compliance with the program and the BSA and its implementing regulations •• Provide education and training of appropriate personnel concerning their responsibilities under the program, including training in the detection of suspicious transactions to the extent that the money services business is required to report such transactions under the BSA •• Provide for independent review to monitor and maintain an adequate program

An MSB principal is exposed to risk when an agent engages in transactions that create a risk for money laundering, terrorist financing, or other financial crime. In order to reduce exposure to such risks, for example, the MSB principal must have procedures in place to identify those agents conducting activities that appear to lack commercial purpose, lack justification, or otherwise are not supported by verifiable documentation. The principal must implement risk-based procedures to monitor the agents’ transactions to ensure that they are legitimate. The procedures must also ensure that, if the agents’ transactions trigger reporting or recordkeeping requirements, the principal handles the information in accordance with regulatory reporting and recordkeeping obligations. In addition, the MSB principal should implement procedures for handling non-compliant agents, including agent contract terminations.

7. 31 CFR § 1022.210(d)(1)(iii).

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