Compliance with OFAC, AML, and USA Patriot Act Toolkit

Resources to assist financial institutions in complying with OFAC, anti-money laundering, and USA Patriot Act requirements.

Practical Law Finance

Financial institutions are under heightened scrutiny of financial institution compliance with applicable anti-money laundering (AML) and Office of Foreign Assets Control (OFAC) regulations.

They are subject to comprehensive AML and OFAC compliance program requirements, which require, among other things:

  • Internal controls.

  • Independent testing and auditing.

  • A dedicated compliance officer.

  • Ongoing employee training.

  • A customer identification program (CIP).

Institutions that are subject to regulatory actions, such as cease and desist orders or civil monetary penalties, are typically guilty of one or some of the following compliance program failures:

  • Failing to have a written program that adequately covers the required elements.

  • Failing to properly implement and maintain the program.

  • Defective programs allowing suspicious activity to go unreported.

  • Structuring transactions to avoid reporting requirements or cases of insider complicity.

  • Failing to file required Bank Secrecy Act reports, such as suspicious activity reports (SARs) or customer transaction reports.

  • In the lending context in particular, financial institutions may be required to follow CIP and other reporting requirements. Relevant covenants and warranties may also be negotiated in loan agreements.

Practical Law provides several know-how resources on AML and OFAC requirements for financial institutions, including:

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