The BSA was the first law enacted to combat money laundering and laid the foundation for subsequent AML statutes. Originally designed to assist the US government with detection and investigations of money laundering activities by identifying the volume, source, and movement of currency and monetary instruments through reporting and recordkeeping requirements and penalties, it has gradually evolved to include requirements to establish AML compliance programs, designate compliance officers, provide ongoing training to employees, and test the programs through independent audits.
FinCEN has the authority to investigate financial institutions for compliance with, and violation of, the BSA. This includes “[o]verall authority for enforcement and compliance, including coordination and direction of procedures and activities of all other agencies exercising delegated authority under this chapter. . . .”1 Under this authority, FinCEN may impose civil monetary penalties when financial institutions “willfully” violate the BSA. Enforcement actions by FinCEN over the past 20 years have generally involved the failure to maintain an adequate anti-money laundering program and/or failure to file Suspicious Activity Reports.2 The DOJ has authority to prosecute criminal violations of the BSA, where a showing of willful violation of the statute is required.3
To establish that a financial institution or individual acted “willfully,” the government need only show that the financial institution or individual acted with either reckless disregard or willful blindness. The government need not show that the entity or individual had knowledge that the conduct violated the BSA, or that the entity or individual otherwise acted with an improper motive or illegal purpose.
1 31 CFR § 1010.810.
2 31 USC § 5318(g)-(h); 31 CFR §§ 1020.210, 1020.320.
3 See 12 USC §§ 1956-57; 31 USC § 5322.