VIDEO: BSA Changing to AML CFT?
In this Compliance Clip (video), Adam answers the question “Is BSA changing to AML/CFT and do we need to make changes to our BSA department names and titles?” Adam clarifies the origin of the term CFT and what financial institutions should really be focusing on in terms of BSA.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to answer the question, is BSA changing to AML/CFT? Here's the question that I saw this week. It says, “We just went through a BSA exam and it was mentioned that the new term for a BSA examination is an AML/CFT examination. Has anyone heard anything like that? Do we need to change our department names, our titles, and all of that? Are we going away from BSA?”
The answer is no. The Bank Secrecy Act is the law in the United States. If you look at the FFIEC BSA exam manual, you'll still see that it is the BSA/AML Exam Manual. So everything mentioned in the BSA/AML Exam Manual and from our regulators still talks about BSA and AML, using those terms, especially for a BSA officer. They still use that term in the BSA Exam Manual. However, the question is, what is CFT? If you actually go back to the implementation of the Bank Secrecy Act, back in the 1970’s, the Bank Secrecy Act was also known as the Currency & Foreign Transactions Act. So that was another name for it. So CFT has actually been around for decades and we have always used the term BSA. That said, I think that that's probably not the real concern. I think what's really happening is we look at the Financial Action Task Force.
The Financial Action Task Force is an international body. It's the United States with Europe, with Canada, with a whole bunch of the largest countries. Last time I checked it was 36 nations coming together who set recommendations for anti-money laundering and anti-terrorist financing laws for countries to implement in their countries. And if your country doesn't meet par, then you're gonna be on the naughty list and you're gonna have problems. So this international group known as the Financial Action Task Force, FATF, they're the ones that set these recommendations and based on the recommendations, countries implement laws to comply so that they're not on the bad list and don't have sanctions against them. That's how the Financial Action Task Force works.
Now, the Financial Action Task Force has been evolving over time. One of their shifts has been towards anti-terrorism financing. That's one of the things that we are seeing now and where CFT comes from, most likely is Counter-Terrorism Financing or countering the financing of terrorism to put the acronym in the right order. So that is a focus. It's been a focus for some time. In the United States, we still refer to it as BSA/AML, but we're also supposed to be looking to counter-terrorism financing in what we do. So I think the added focus from this examiner must be coming from the Financial Action Task Force.
The question is, do you need to change your title and your department from the BSA Department to the AML/CFT Department? No, you don't because the Bank Secrecy Act is the law that implements the anti-money laundering and counter-terrorism financing rules in the United States. On an international level, AML and CFT are more commonly used but in the United States, BSA is the law we use, so it's fine to use that. I see no reason to change your titles and your department names. But understand, over the last decade there has been a shift towards countering terrorism and that's probably where the CFT is coming from.
That's it for this Compliance Clip.