Payments Law Tool Kit

Venable / 8 7 / Venable action in response to such findings, including by filing suspicious activity reports (or working with a financial institution partner to file such a report) Venable counsels clients on the full spectrum of laws and regulations that impact AML compliance, including the Bank Secrecy Act (BSA), FinCEN regulations, OFAC sanctions, and criminal money laundering statutes. Our attorneys also routinely work with counsel outside the U.S. to ensure compliance with the AML laws in other countries in which our clients conduct business. Our focus is on providing clients with internal procedures that are as uniform as possible, while meeting the standards required by all applicable jurisdictions. Anti-Money Laundering Regulations In a fast-changing regulatory environment, complying with domestic and international anti-money laundering (AML) laws and regulations is an ongoing challenge. This is especially true for payments companies, which can be directly subject to federal AML requirements as money services businesses (MSBs) and indirectly subject to them through their relationships with banks, credit unions, and other financial institutions. At the federal level, the Financial Crimes Enforcement Network (FinCEN) regulations impose reporting, registration, and recordkeeping requirements on banks and other financial institutions, including MSBs. In addition, the Office of Foreign Assets Control (OFAC) is responsible for implementing U.S. economic sanction programs against targeted countries, entities, and individuals. Complying with the various AML and OFAC rules requires covered entities to implement dedicated compliance programs that address the following topics: • Customer Identification Programs (CIP) and Customer Due Diligence (CDD) – These programs allow a financial institution to understand the nature and purpose of its customer relationships, which includes understanding the types of transactions in which a customer is likely to engage. The beneficial ownership rule requires covered financial institutions to verify the identity of a legal entity customer and the identities of its beneficial owners • OFAC Screening – All U.S. persons are subject to OFAC’s economic sanctions programs. The OFAC regulations prohibit U.S. persons from doing business with targeted countries, entities, and persons • Monitoring and Reporting of Transactions – Whether directly or indirectly subject to the AML laws, a financial institution is expected to monitor its customers’ transactions for suspicious activities. In addition to traditional chargeback and return rate monitoring, payments companies are expected to review customer transactions for signs of fraud or criminal activity, and then take appropriate