BSA/AML/CFT: Non-Profit & Charitable Organizations
Back in November 2020, the Agencies issued a Joint Fact Sheet on Bank Secrecy Act Due Diligence Requirements for Charities and Non-Profit Organizations. It indicated that while the U.S. government does not view the charitable sector as a whole as presenting a uniform
or unacceptably high risk of being used or exploited for money laundering, terrorist financing (ML/TF), or sanctions violations…institutions are reminded that charities vary in their risk profiles and should be treated according to such profiles. Banks should apply the risk-based approach and evaluate charities according to their particular characteristics to determine whether they can effectively mitigate the potential risk some charities may pose. This approach helps to minimize illicit finance risks.
This Fact Sheet is still relevant today and while the overall risk is still not considered unacceptably high, there has been an increase in non-profits and charitable organizations being used to facilitate money laundering and/or other illicit activities. For instance, these organizations are often exploited by terrorist groups, not only as a means to raise funds but also to transfer money discretely. Staying on top of your customer due diligence and documentation processes is crucial to mitigate the risk the charities and non-profits present.
Kevin discussed non-profit and charitable organizations during the February meeting of our BSA/AML/CFT Group. Give it a listen!
BSA/AML/CFT: Countering the Financing of Terrorism
Have you explored the meaning behind Countering the Financing of Terrorism (CFT)? The good news is that while the term is new, the concept still aligns closely to what you are already doing as part of your existing BSA/AML program. This new, modernized terminology aims to help evolve and streamline compliance to fall in line with existing laws.
Kevin discussed this during our February BSA/AML/CFT Group. Here’s everything you need to know!
BSA/AML/CFT: Risk Assessment Breakdown
When it comes to doing a risk assesement for your BSA/AML/CFT program, there are generally a lot of different risks to consider and they are often impacted by the size of your institution and the complexity of your products and services. When you present your risk assessment, it’s important to consider your audience. For example, the sheer volume of information makes it easy to get lost in the weeds and can muddy the message especially for your management and Board of Directors. So, the summary you prepare for management might differ significantly from the detailed analysis you’ve completed for your own use. Knowing how to adapt your risk assessment to align with your audience’s needs is key to ensuring the information you are providing is appropriate.
Kevin discussed some ways to tailor your risk assessment during the February meeting of our BSA/AML/CFT Group. Give it a listen!
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Register here - https://store.bankerscompliance.com/link/AML-CFT-Group.
