Money laundering is the process by which the origin of funds generated through the exercise of some illegal or criminal activities (drug or narcotics trafficking, arms smuggling, corruption, fraud, prostitution, extortion, piracy, and terrorism) is disguised. The objective of the operation, which is generally carried out at several levels, is to make the funds or assets obtained through illicit activities appear to be the fruit of legitimate activities and circulate smoothly in the financial system.
In general terms, through banking, the national and international payment system is carried out, a cornerstone to allow better development of economic activities between citizens and countries, that is to say, the flow of capital and money is carried out through the channels offered by banking. Taking into account that a significant part of the advantages provided by the banking system is its 24/7 availability and banking secrecy.
Banking secrecy is the obligation of financial institutions to keep confidential the information and documentation related to the operations and services they provide. Therefore, in no case may they give news or information of deposits, operations, or services, except to the depositor, debtor, holder, beneficiary, legal representatives, or to those who have been granted power of attorney to dispose of the account or intervene in the operation. At the same time, the anonymity of client-bank relations is based on the client’s desire to remain anonymous concerning the banker.
In this globalized and increasingly technology-dependent world, technological advances have allowed a more excellent and more effective flow of capital, favoring international trade. Still, these facilities have also been exploited by organized crime, which, derived from the advantages of billions of lawful transactions and some of the principles and practices provided by financial channels, have rendered obsolete the traditional ways of combating types of crime which, taking on global proportions, have forced States to implement proportional policies against new forms of corruption that incorporate the most advanced technological resources. For this reason, the international community and the country were forced to respond uniformly to this phenomenon. Thus, several policies were adopted and implemented to prevent the introduction of illicit resources into the financial system and therefore hinder the commission of this crime.
The Bank Secrecy Act (BSA), 31 USC 5311 et seq, establishes the program, recordkeeping, and reporting requirements for national banks, federal savings associations, federal branches, and agencies of foreign banks. The OCC’s implementing regulations are found at 12 CFR 21.11 and 12 CFR 21.21. In addition, the BSA was amended to incorporate the provisions of the U.S. PATRIOT Act, which requires all banks to adopt a customer identification program as part of their anti money laundering and bank secrecy act compliance program.
The BSA requires traditional banks, credit unions, thrifts, and non-bank financial institutions, securities dealers, and money services businesses to conduct anti-money laundering and bank secrecy act compliance and maintain specific records of events that could indicate the occurrence of money laundering.
The Financial Crimes Enforcement Network (FinCEN) is the administrator of the BSA. And over the years, the BSA has been strengthened through subsequent anti-money laundering laws. That’s why having expert advice on anti-money laundering and bank secrecy act compliance can be the difference between sleeping accessible and facing a series of pretty severe problems.