Question

Determine, list and describe how each successive Act modified the original BSA (1970)

Based on our discussion and perusal of SARs and CTRs, which amendments would you recommend improving anti-money laundering efforts?

Answer 1

When illegal money is circulated in the financial system to appear it as a legal money is known as money laundering. Money laundering generally exaggerate drug trafficking and terrorism and adversely effect the global economy at a massive scale.

To safeguard the financial system from money laundering Bank Secrecy Act (BSA) was established in 1970. Since then, various other laws came up and modified the original BSA (1970). Below are the various successive Acts:

Money Laundering Act, 1986: This Act criminalized the Money-laundering and directs bank to maintain the procedures of BSA.

Anti- Drug Abuse Act, 1988: it was established for Drug Trafficking offences and to levy minimum penalties for such offence.

Annunzio -Wylie Anti-Money Laundering Act, 1992: It gave treasury the authority of financial guidance through Know Your Customer (KYC) rule.

Money-Laundering Suppression Act,1994: It provides guidlines for both mandatory and discretionary exemptions from monetary transaction reporting requirements for depository institutions.

Money-Laundering and Financial Crimes Strategy Act, 1998: It requires the banking agencies to develop anti money-laundering training to examiners and formulating strategies and creating high intensity task-force.

USA PATRIOT Act, 2001: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001

Intelligence Reform and Terrorism Prevention Act, 2004: It requires certain financial institutions to report cross-border electronic transmittals of funds.

Suspicious Activity Report (SAR) helps to identify customers involving in the money-laundering and terrorist funding. It is filed by financial institution for any suspicious activity in financial transactions.

Currency Transaction Report (CTR) is used by banks to report currency transaction above $10,000 to prevent money laundering.

Both the reports are important, but CTR filling will help significantly in tracing the suspicious accounts.