The Bank Privacy Act of 1970 ( BSA ), also known as the Currency and Foreign Transaction Reporting Act a US law that requires financial institutions within the United States to assist US government agencies to detect and prevent money laundering. In particular, the law requires financial institutions to keep records of cash purchases of negotiable instruments, report files if the daily aggregate exceeds $ 10,000, and report suspicious activity that may indicate money laundering, tax evasion, or other criminal activity.
BSA is sometimes referred to as an anti-money laundering law (AML) or jointly as BSA/AML.
Video Bank Secrecy Act
Histori
BSA was originally endorsed by the US Congress in 1970 and signed by President Richard Nixon into law on October 26, 1970. Shortly after passing, several groups sought to have an unconstitutional law rule court, claiming it violated both the Fourth Amendment right against unwarranted search and seizure, and the right of the Fifth Amendment of the legal process. Some cases were combined before the Supreme Court at California Bankers Assn. v. Shultz , 416 U.S. 21 (1974), who decided that the Act did not violate the Constitution. Until the 1980s there was a "prolonged period of lateness", but financial institutions eventually complied with BSA reporting requirements.
It has been amended several times, including the provisions of Title III of the US PATRIOT Act, which amend the BSA to require financial institutions to establish anti-money laundering programs by establishing internal policies, procedures and controls, appointing compliance officers, providing employee training, their programs through independent audits.
Maps Bank Secrecy Act
Report
BSA regulations require all financial institutions to submit five types of reports. Individuals must file individual archiving requirements.
Currency transaction report
The currency transaction report (CTR) reports cash transactions in excess of $ 10,000 within one business day, regardless of whether it's in a single transaction or multiple cash transactions. It was filed electronically with the Financial Crimes Enforcement Network (FinCEN) and identified as FinCEN Form 112 (formerly Form 104).
CTR includes individual bank account number, name, address, and social security number. A SAR report is required when a transaction demonstrates behaviors designed to avoid CTR (or many other types of suspicious activity), including somewhat more detailed information and usually includes investigation efforts on the part of a financial institution to assess the validity or nature of the transaction. One CTR submitted for a client account is usually unrelated to the authorities, while some CTRs from different agencies or SARs suggest that the activity may be suspicious.
Suspicious activity reports
A suspicious activity report (SAR) should report any cash transaction in which the customer appears to be trying to circumvent the BSA reporting requirements by not submitting a CTR or MIL, for example. SAR should also be filed if a customer's action indicates that he or she is washing money or violating federal criminal law and committing wire transfer scams, fraud checking, or mysterious disappearances. The bank should not let the customer know that the SAR is being filed. These reports are submitted to FinCEN and identified as Finance Department Form 90-22.47 and OCC Form 8010-9, 8010-1. This requirement and the accompanying oblique order accompanying it are added by the Annunzio-Wylie Anti-Money Laundering Act Ã,§ 1517 (b) (part of the Housing and Community Development Act 1992, Pub.L. 102-550, 106 Stat 3762, 4060).
Financial institutions are not allowed to notify businesses or consumers that SAR is being filed, and all reports mandated by the BSA are not covered under disclosure under the Freedom of Information Act.
FBAR
US citizens and residents with a financial interest or authority over a foreign bank account or "foreign financial account" with a total value of $ 10,000 are required to file a Foreign Bank Account Statement (FBAR) with the US Treasury on 15 October each year. These are identified as the FinCEN Forms 114 (formerly Treasury Department Form 90-22.1). In addition, they must report the account on Schedule B form 1040 Tax form. Critics argue that FBAR is wasting time and money, "undermining compliance" without the focus of "possible criminal activity". Recent district court cases in the Tenth Circuit have significantly expanded the definition of "interest" and "other authorities".
Other reports
The monetary instrument log (MIL) must show cash purchases of monetary instruments, such as money orders, checks, and travel checks worth between $ 3,000 and $ 10,000. This form should be kept in the notes at the financial institution for at least five years, and produced at the request of the examiner or audit to verify compliance.
"International Currency Transportation or Monetary Instrument Report", also referred to as the Currency and Monetary Instrument Report (CMIR), shall be filed by any person or institution that physically transports, mails or ships, or causes to be physically transported, shipped, sent, or received, currency, travelers checks, and certain other monetary instruments in aggregate amounts exceeding $ 10,000 into or out of the United States shall apply for CMIR. These are identified as the Report of FinCEN Form 105.
Banks are required to apply for Appointment of Released Persons (Form FinCEN 110) to appoint exempt customers for BSM CTR reporting purposes. In addition, banks use this form once every two years to update exceptions for business customers and unqualified payrolls are eligible.
It also requires that each business receive one or more cash payments associated with a total of more than $ 10,000 to apply for the IRS/FinCEN Form 8300.
Sanctions
There are severe penalties for individuals and financial institutions that fail to submit CTR, MIL, or SAR. There is also a punishment for the bank that discloses to his client that he has filed a SAR about the client. Penalties include heavy fines and imprisonment. IRC Ã,§6038D requires all US persons, individuals, companies, partnerships, LLC, and trusts, to provide timely information regarding their foreign accounts, otherwise $ 10,000 penalty will be generated for each month late (subject to certain maximum penalties).
In 1998, the Supreme Court ruled in the United States v. Bajakajian that the government should not confiscate money from a person for not reporting it to the Currency and Other Monetary Instruments Report (CMIR), as the punishment would be "highly disproportionate to gravity violations" and unconstitutional under the Excessive Penalty Clause of the Eighth Amendment. The pirates and their families have attempted to fetch $ 357,144 from the United States in their suitcases, and the government has seized it under the Bank Secrecy Act, which allows for the seizure of "any property, real or personal, involved in such offenses". This is the first time the Supreme Court has attacked the "aggressive use of foreclosures" by the federal government.
In March 2010, Wachovia admitted a "serious and systemic" violation of the Bank Secrets Act for laundering 378 billion dollars between 2004 and 2007, the biggest violation in the dollar amount. This allows Mexican and Colombian drug cartels to launder money through casia de cambio deliberately failing to administer an effective anti-money laundering program.
Additional information
The entire industry has developed around providing software to analyze transactions in an attempt to identify a transaction or transaction pattern called setup, which requires SAR archiving. Financial institutions are penalized for failing to document CTR and SAR, such as heavy fines and regulatory restrictions, including the lifting of charters.
This software application effectively monitors customer transactions on a daily basis, and uses previous customer transactions and account profiles, giving customers a "whole picture" to the bank management. Monitoring of transactions may include deposits and cash withdrawals, wire transfers, and ACH activities. In the banking industry, this application is known as "BSA software" or "anti money laundering software".
See also
References
External links
- Accounting Guidance Book of Banking Secrets Law of the Ministry of Finance, Currency Financial Supervisor, National Bank Administrator December 2000.
- 31 USC Sec 5311-5332
- Pattern of Abuse: Judging Bank Compliance and Law Enforcement Action: Hearing before Banking, Housing and Urban Affairs Committee, United States Senate, One Hundred Seventeen Congress, First Session, March 7, 2013
- Public Law 91-508, 91th Congress, H.R. 15073: Federal Deposit Insurance Act, amendment, Bank Secrecy Act 1970
- Section 16. Foreign Bank Account and Financial Account (FBAR)
Source of the article : Wikipedia
0 Comments