The answer depends on what services and products your business provides to the public. MSBs must comply with AML requirements applicable to financial institutions in addition to requirements applicable to MSBs. You may be an MSB if your business offers one or more of the following services:
Yes. Federal regulations require that all MSBs must be registered with FinCen. You may incur criminal and civil liabilities for failure to register with FinCen. Individual states have registration as well as business licensing requirements that you must also comply with.
It is imperative that as an MSB that you obtain and maintain in good standing appropriate state registration(s) and licensing in addition to registration with FinCen. Banking MSB is already difficult, for your bank to ensure you are following and complying with required regulations, they always confirm that their MSB customers have obtained necessary state licenses as part of managing their BSA risk.
If you are required to state as an MSB with a state and fail to do so, you may receive a letter informing you that you are in violation of state regulations. In some instances, you may be prohibited from conducting money services business in that state. In other cases, depending on the facts of your case, the state may require you enter a Consent Order which will require you to specified fine. Contact us with the letter and we may be able to help.
Yes. As a money service business, you must develop and implement an effective anti-money laundering compliance program that is designed to prevent your business from being used to launder money and/or assist in financing terrorist activities. The compliance program elements are specific and do-it-yourself programs may not past muster with regulators. Contact us for assistance in building and managing your compliance program.
An SAR is a Suspicious Activity Report. Certain MSBs are required to file SARs for any transaction that is both suspicious and over $2,000. A transaction is suspicious if the MSB has reason to believe that the transaction involves funds from an illegal activity, is designed to evade requirements of the Bank Secrecy Act (BSA) or serves no apparent lawful business. SARs must be filed electronically through the BSA E-Filing System.
As a money services business, it is important that you identify and assess the money laundering risks that may be associated with your unique products, services, customers, and geographic locations. You can only manage your risk if you know what those risks are. Your business should focus resources on the areas of your business that pose the greatest risks, and the level of sophistication of the associated internal controls should be appropriate for the size, structure, risks, and complexity of the money services business.
Contact us to discuss how our services can assist you in identifying your unique risk and mitigating those risks.
As an MSB, you are expected to develop written, risk-based policies, procedures and controls covering your responsibilities under the Bank Secrecy Act. Operations should then be managed to conform to the written compliance policies and tested periodically via the Independent Review process. We specialize in conducting customized risk assessments which we use to design and develop your policies and process document.
MSBs are required to provide appropriate training for their employees annually. Such training helps the MSB to ensure an effective implementation of its policies and procedures. The content of the training you provide to employees depends on the types of products and services you offer. At minimum, your training should include customer identification and verification; detection and reporting of suspicious activity; current transaction reporting thresholds, money transfer red flags; and record keeping requirements. We specialize in developing and providing training to both rank and file employees and management. Contact us to review your training needs.
Independent review refers to Third Party Independent Audit of your BSA/AML compliance program. The Bank Secrecy Act requires money services businesses to establish anti-money laundering programs that includes independent audit function to test their AML programs. The primary purpose of the independent review is to monitor the adequacy of the money services business’ anti-money laundering program. The review should determine whether the business is operating in compliance with the requirements of the Bank Secrecy Act and of the business’ own policies and procedures.
Because banks also require that MSB compliance programs be independently audited, it is best to hire a third-party independent review to provide unbiased review of your program. Contact us to work on your review.
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