Generic AML Regulatory Guidance Document

signers, legal persons and trusts; ongoing due diligence; and general requirements for designated nonfinancial businesses and professions (DNFBPs) (e.g., casinos, accountants, attorneys, dealers in precious metals and stones, real estate agents). For additional guidance, please refer to the Financial Action Task Force and Mutual Evaluations sections. For additional guidance on international perspectives, please refer to the International Perspectives and Initiatives section. 14. What are the consequences of not complying with AML laws and regulations? The consequences of noncompliance with AML laws and regulations may include regulatory enforcement actions, civil and criminal penalties, seizure and forfeiture of funds, and incarceration for the individuals involved. Depository institutions also may be subject to restrictions on growth and expansion and, in the extreme, may have their charters/licenses revoked, a consequence known as the “death penalty.” For additional guidance, please refer to the Enforcement Actions section. 15. What factors are considered by law enforcement when it assesses whether an institution or its personnel are guilty of aiding and abetting money laundering or terrorist financing? When assessing whether an institution or its personnel are guilty of aiding and abetting money laundering or terrorist financing, the authorities consider, among other factors, the following “standards of knowledge”: e Reckless Disregard — Careless disregard for legal or regulatory requirements and sound business practice ® Willful Blindness — Deliberate ignorance and failure to follow up in the face of information that suggests probable money laundering or illicit activity e Collective Knowledge - Aggregates/attributes the knowledge of employees to the employing company It is important to remember that under U.S. law, a company may, in general, be held liable for the actions of its employees, regardless of the number or level of employees involved in the wrongdoing. Overview of the U.S. Regulatory Framework Key U.S. Regulatory Authorities and Law Enforcement Agencies 16. Who has the authority to assess penalties for violations of AML laws and regulations? Authority to assess civil penalties rests with the Secretary of the Treasury and is delegated to the Financial Crimes Enforcement Network (FinCEN) and the primary federal regulators or Self-Regulatory Organizations (SROs) (e.g., Financial Industry Regulatory Authority [FINRA]). Some state regulatory agencies have their own authority to assess civil penalties, as well. Criminal penalties are determined through legal proceedings at state or federal levels. The Department of Justice (DOJ) can bring criminal and civil actions, as well as forfeiture actions. 17. Who are the primary federal banking regulators and what are their responsibilities? The five federal banking regulators include: e The Board of Governors of the Federal Reserve System (FRB) oversees state-chartered banks and trust companies that belong to the Federal Reserve System, financial holding companies, bank holding companies (BHC) and thrift holding companies. e The Federal Deposit Insurance Corporation (FDIC) regulates federally charted banks (e.g., state-chartered banks that do not belong to the Federal Reserve System) as well as state-chartered thrifts. e The Office of the Comptroller of the Currency (OCC) regulates federally chartered banks (e.g., banks that have the word “National” in or the letters “N.A.” after their names as well as federal thrifts). ¢ The National Credit Union Administration (NCUA) regulates federally chartered credit unions. protiviti 113 HOUSE_OVERSIGHT_024119