January 5, 2017
Contact: Richard Loconte, 212-709-1691
NEW YORK’S LANDMARK ANTI-TERRORISM TRANSACTION MONITORING AND FILTERING PROGRAM REGULATION TAKES EFFECT
As of January 1, 2017, Regulated Institutions Must Comply With the Necessary Rule to Combat Illegal Financial Transactions That May Fund Terrorist Activity.
Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services’s (DFS) landmark risk-based anti-terrorism and anti-money laundering regulation is now in effect. As of January 1, 2017, regulated institutions must maintain programs to monitor and filter transactions for potential Bank Secrecy Act (BSA) and anti-money laundering (AML) violations and prevent transactions with sanctioned entities, and certify compliance with the regulation annually to DFS.
“This regulation represents an important milestone in DFS’s longstanding mission to improve and strengthen BSA and AML compliance among New York’s financial institutions and make certain that banks are not being used to help finance terrorism and other illegal activities,” said Superintendent Vullo. “DFS will continue its mission to protect the integrity of New York’s financial system and will continue to take necessary enforcement action to protect against illicit activities.”
Since being confirmed in June 2016, Superintendent Vullo has led DFS enforcement actions for violations of AML laws against Intesa Sanpaolo S.p.A., which was fined $235 million; Agricultural Bank of China, which was fined $215 million; and Mega Bank of Taiwan, which was fined $185 million.
The new rule requires relevant regulated institutions to review transaction-monitoring and filtering programs and ensure that such programs are designed to comply with regulatory safeguards. The institutions also must adopt either an annual board resolution or senior officer compliance finding to certify compliance with the DFS regulation beginning April 15, 2018. The resolution or finding must state that documents, reports, certifications and opinions of officers and other relevant parties have been reviewed by the board of directors or senior official to certify compliance with the regulation.
In preparation for the regulation’s effective date, DFS has provided comprehensive training for all its bank examiners and has updated examination “first-day letters” to reflect the additional provisions that the new regulation requires.