The Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a statement this week setting forth its approach to enforcing the rules and regulations within the Bank Secrecy Act (BSA). According to FinCEN, it aims to provide clarity and transparency to its approach when contemplating compliance or enforcement actions against covered financial institutions that violate the BSA. 

Specifically, the statement outlines the administrative actions available to FinCEN, and provides an overview of the information FinCEN analyzes in order to determine the appropriate outcome to violations of the BSA.

FinCEN has authority to take the following actions when it identifies an actual or possible violation of the BSA or any BSA regulation or order:

• No Action. FinCEN may close a matter with no additional action. FinCEN may reopen the matter if FinCEN obtains new material information concerning the matter or becomes aware of additional or subsequent violations;
• Warning Letter. FinCEN may issue a warning through a supervisory letter or similar communication;
• Equitable Remedies. FinCEN may seek an injunction or equitable relief to enforce compliance when FinCEN believes an entity or individual has violated, is violating, or will violate the BSA or any BSA regulation or order;
• Settlements. As part of a settlement, FinCEN may require both remedial undertakings and civil money penalties;
• Civil Money Penalties. FinCEN may assess a civil money penalty;
• Criminal Referral. If circumstances warrant, FinCEN may refer a matter to appropriate law enforcement agencies for criminal investigation and/or criminal prosecution.

In all matters, FinCEN will consider the need to impose compliance commitments deemed necessary and appropriate to ensure that financial institutions are fully complying with their BSA obligations.

FinCEN considers a range of factors when evaluating an appropriate disposition upon identifying actual or possible violations of the BSA. The factors FinCEN considers include, but are not limited to, the following:

• Nature and seriousness of the violations, including the extent of possible harm to the public and the amounts involved;
• Impact or harm of the violations on FinCEN’s mission to safeguard the financial system from illicit use, combat money laundering, and promote national security;
• Pervasiveness of wrongdoing within an entity, including management’s complicity in, condoning or enabling of, or knowledge of the conduct underlying the violations;
• History of similar violations, or misconduct in general, including prior criminal, civil, and regulatory enforcement actions;
• Financial gain or other benefit resulting from, or attributable to, the violations;
• Presence or absence of prompt, effective action to terminate the violations upon discovery, including self-initiated remedial measures;
• Timely and voluntary disclosure of the violations to FinCEN;
• Quality and extent of cooperation with FinCEN and other relevant agencies, including as to potential wrongdoing by its directors, officers, employees, agents, and counterparties;
• Systemic nature of violations. Considerations include, but are not limited to, the number and extent of violations, failure rates (e.g., the number of violations out of total number of transactions), and duration of violations; and
• Whether another agency took enforcement action for related activity. FinCEN will consider the amount of any fine, penalty, forfeiture, and/or remedial action ordered.