Exemption from mandatory policies and procedures

(Sec. 352): The BSA has, for some time, required financial institutions to have policies and procedures to prevent money laundering. The Act has now added to those requirements some minimum standards for the institution’s policies and procedures. In particular, an institution must first have policies and procedures to deal with money laundering. The policies and procedures must provide for a compliance officer, ongoing education for employees on money laundering, and an independent audit program. The Act also authorized the Secretary of the Treasury to exempt from coverage institutions that are not subject to the BSA regulations. This amendment takes effect at the end of the 180‑day period after enactment—October 26, 2001. The Secretary must prescribe regulations before the end of this 180-day period.

The Secretary issued interim regulations in April of 2002. The interim regulations simply provided that an institution would be deemed in compliance if it complied with pre‑existing BSA requirements concerning money-laundering programs. [See the Federal Register for April 29, 2002, beginning at page 21109.] The Treasury issued a proposed regulation in September of 2002. [See the Federal Register for September 26, 2002, beginning at page 60617.]