Money Laundering

MONEY LAUNDERING

Federal financial regulators issued a statement outlining their policy for enforcing anti-money laundering provisions of the Bank Secrecy Act (BSA). The Interagency Statement of Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements promotes greater consistency among the regulators in enforcing the BSA.

The statement describes specific circumstances that would prompt the agencies to issue a cease and desist order against a regulated institution that fails to establish and maintain a BSA compliance program or to correct a previously identified problem. The statement also clarifies formal and informal enforcement actions regulators may take.

The statement, issued by the Federal Reserve Board, FDIC, Office of the Comptroller of the Currency, Office of Thrift Supervision and National Credit Union Administration, is available at www.federalreserve.gov/boarddocs/press/bcreg/2007/20070719/attachment.pdf .

Shortly after the new regulatory guidance was issued, FinCEN and the Federal Reserve announced on Aug. 6 that American Express Bank International (AEBI) of Miami had agreed to a $20 million civil penalty for BSA violations. FinCEN also fined American Express Travel Related Services Company Inc. of Salt Lake City $5 million for BSA violations. AEBI will pay another $55 million to settle forfeiture claims made by the Department of Justice. The Federal Reserve issued a cease and desist order requiring AEBI to take corrective actions.

AEBI agreed to the fines in connection with charges that it failed to maintain an anti-money laundering program. The travel services firm, a wholly owned subsidiary of AEBI, was fined for failing to file a “significant number” of suspicious activity reports in accordance with the BSA, according to a government press release. The full report is available at www.fincen.gov.