AML (Anti-Money Laundering)

AML (Anti-Money Laundering) laws were added to the BSA (Bank Secrecy Act) to strengthen banks’ abilities to prevent illegal money-laundering activities.

In addition to other stipulations of the BSA, the AML specifically helps banks identify and fight terrorist financing, money laundering, securities fraud, and market manipulation.

FINRA (Financial Industry Regulatory Authority) sets forth the rules that banks must follow to remain compliant. Each bank and financial institution can create its own written AML compliance program, but it must qualify under the following guidelines.

• The program must be reasonably designed to detect and report suspicious activity.
• It must have a risk-based customer identification program (CIP) in which the financial institution is confident (within reasonable parameters) that they know who they are working with.
• It must be independently tested to guarantee compliance and effectiveness.
• There must be a named and registered (with FINRA) AML compliance officer.
• Each FINRA authorized institution must provide ongoing staff training as needed to remain compliant with updated AML and BSA laws.