The BSA applies to:
- domestic financial institutions;
- US branches of foreign financial institutions operating within the United States;
- non-US operations of foreign financial institutions due to their relationship with their US-based operations, particularly through correspondent banking relationships;
- financial institutions operating exclusively outside the US if their transactions are processed through a US financial institution, or if US sanctions affect the financial institutions or the countries in which they operate; and
- US person[s], defined as “an individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, an Indian Tribe (as that term is defined in the Indian Gaming Regulatory Act), and all entities cognizable as legal personalities.”1
Note that a foreign subsidiary or branch of a US financial institution also must comply with the AML laws and regulations of the jurisdictions where it operates.
All financial institutions subject to FinCEN regulations are required to maintain risk-based AML programs.2 “Risk-based” is not specifically defined in the FinCEN regulations. A February 2012 report by the Financial Action Task Force (FATF), an intergovernmental organization created by the G7 to develop AML policies, discusses how countries should identify, assess, and understand money laundering and terrorist financing risks, and then take action to apply resources to effectively mitigate those risks in ways commensurate with the risks identified.3
Whether other AML regulatory requirements (i.e., risk assessments, compliance programs, transaction monitoring, and reporting) apply depends on the type of financial institution. Note that certain reporting requirements apply to non-financial institutions, as well.4 To determine which requirements apply to a particular type of financial institution, see 31 CFR Chapter X.
For more on the regulatory requirements for AML compliance programs, see the Overview of Effective AML Compliance Programs topic in the Anti-Money Laundering Compliance programs section.
The MLCA’s money laundering provisions apply to all US persons and foreign persons when (1) the conduct occurs in whole or in part in the US; (2) the transaction involves property in which the US has an interest pursuant to a forfeiture order; or (3) when the foreign person is a financial institution with a US bank account.5
The MLCA’s criminal spending provision applies to US persons and foreign persons when the offense takes place in the US or a special maritime or territorial US jurisdiction.6
1 31 USC § 5312; 31 CFR § 1010.100(mm) (definition of US persons).
2 31 CFR §§ 1010-1020.
3 FATF, International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (Feb. 2012), available here.
4 31 CFR Chapter X.
5 18 USC § 1956(b)(2).
6 18 USC § 1956(f).