Real estate transactions are the easiest way to launder money due to the size of the transactions and the amount of money that can be “cleaned”. All financial institutions are required to comply with the Bank Secrecy Act.
Money laundering may also involve tax fraud as well as other potential crimes. All “financial institutions” must comply. According to the Bank Secrecy Act, a “financial institution” includes an exhaustive list of entities, including but not limited to: insured banks of the FDIC; commercial banks; trust companies, private bankers; an agency or branch of a foreign bank in the U.S.; credit unions; thrift institutions; SEC broker or dealers, insurance companies; loan or finance companies; licensed senders of money; other persons who engage in the transmission of funds, including any person who engages as a business in an informal money transfer system; any network of people engaging as a business in facilitating the transfer of money domestically or internationally outside of the conventional financial institutions system; persons involved in real estate closings and settlements; any other business designated by the Secretary whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters.
§ 1020.210 Anti-money laundering program requirements for financial institutions regulated only by a Federal functional regulator, including banks, savings associations, and credit unions.
A financial institution regulated by a Federal functional regulator that is not subject to the regulations of a self-regulatory organization shall be deemed to satisfy the requirements of 31 U.S.C. 5318(h)(1) if the financial institution implements and maintains an anti-money laundering program that:
(a) Complies with the requirements of §§ 1010.610 and 1010.620 of this chapter;
(b) Includes, at a minimum:
(1) A system of internal controls to assure ongoing compliance;
(2) Independent testing for compliance to be conducted by bank personnel or by an outside party;
(3) Designation of an individual or individuals responsible for coordinating and monitoring day-to-day compliance;
(4) Training for appropriate personnel; and
(5) Appropriate risk-based procedures for conducting ongoing customer due diligence, to include, but not be limited to:
(i) Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and
(ii) Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.
(c) Complies with the regulation of its Federal functional regulator governing such programs.
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