In general, what is an element that a financial institution or business does not have to specifically address in an anti-money laundering program?

According to the Bank Secrecy Act (BSA), a financial institution or business must establish an anti-

money laundering (AML) program that includes at least four elements: (a) a system of internal

policies, procedures and controls to prevent, detect and report money laundering and other illicit

activities; (b) a designated compliance officer who is responsible for overseeing the implementation

and effectiveness of the AML program; © an ongoing employee training program that covers the

legal and regulatory obligations, the risks and red flags of money laundering, and the roles and

responsibilities of the staff in the AML program; and (d) an independent audit function that tests and

evaluates the adequacy and compliance of the AML program12.

While the Office of Foreign Assets Control (OFAC) is a key agency that enforces economic and trade

sanctions against targeted foreign countries, entities and individuals, it is not part of the BSA or the

AML program requirements. However, financial institutions and businesses are expected to comply

with OFAC regulations and screen their customers and transactions against the OFAC lists of

sanctioned parties. Failure to do so may result in civil or criminal penalties34. Therefore, it is

advisable for financial institutions and businesses to have an OFAC program that is integrated with

their AML program, but it is not a mandatory element that they have to specifically address in their

AML program.

1: Financial Crimes Enforcement Network (2020). Anti-Money Laundering Programs

2: ACAMS (2020). CAMS Certification Package (6th Edition)

3: Office of Foreign Assets Control (2023). Sanctions Programs and Country Information

4: Moses & Singer LLP (2023). Anti-Money Laundering, Bank Secrecy and OFAC Regulations