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Best Practices for US Money Services Businesses

Anti-Money Laundering and Counter-Financing of Terrorism Compliance Program

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Statement of Purpose

This Best Practices guide is designed to assist Money Services Businesses (“MSBs”) with developing a compliance program to meet applicable requirements established by the Financial Crimes Enforcement Network (“FinCEN”), its implementing regulations under 31 CFR § 1022, FinCEN’s Bank Secrecy Act (“BSA”)/Anti-Money Laundering (“AML”) Examination Manual Money Services Businesses, sanctions laws/regulations, and relevant guidance. Like the underlying laws, these best practices are not designed to be a “one-size-fits-all” solution to complying with regulations, but should be implemented on a risk-basis commensurate to the size of the MSB, the services it offers, the geographies in which it operates, and other pertinent factors. The practices discussed in this document were formulated as best-in-industry principles to assist any MSB in meeting its regulatory obligations. To this end, these best practices also take into account virtual currency and financial-technology “FinTech” companies recognizing their integration into the financial services landscape and accompanying AML obligations.

In addition to assisting with general regulatory requirements, banks and other financial institutions will be encouraged to confidently engage in relationships with MSBs that utilize these standards and best practices. Further, banks and other financial institutions can utilize these best practices to address the regulatory expectations described in the FFIEC BSA/AML Examination Manual. These expectations include:

  • That “[t]he BSA does not require, and neither FinCEN nor the federal banking agencies expect, banks to serve as the de facto regulator” of any Money Services Business;
  • That “[w]hile banks are expected to manage risk associated with all accounts, including MSB accounts, banks will not be held responsible for the MSB’s BSA/AML program;” and
  • That “[n]ot all MSBs pose the same level of risk, and not all MSBs will require the same level of due diligence. Accordingly, if a bank's assessment of the risks of a particular MSB relationship indicates a lower risk of money laundering or other illicit activity, a bank is not routinely expected to perform further due diligence (such as reviewing information about an MSB's BSA/AML program) beyond the minimum due diligence expectations. Unless indicated by the risk assessment of the MSB, banks are not expected to routinely review an MSB's BSA/AML program.”

As described in this best practices document, an MSB should address its AML risk in accordance with relevant government regulation and the risk posed by its own business model. MSBs are diverse entities engaging in many types of commerce, including dealers in foreign exchange, check cashers, sellers of prepaid access, providers of prepaid access, issuers or sellers of traveler’s checks or money orders, and money transmitters. However, the principles described in this best practices document can guide the implementation of an AML program for any MSB involved in any activity regardless of the MSB’s services, size, or geographic reach. Overall, these industry best practices should enable an MSB to develop and maintain an AML program to meet its obligation to detect, report, and prevent money laundering and terrorist financing. This best practices document is not intended to be exhaustive and MSBs should review the materials cited herein and comply with all applicable laws and regulations.