FinCEN advisory defines ‘culture of compliance’

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) defined the concept of a “culture of compliance” in a six-page advisory  Monday that was aimed at senior management, leadership and owners of financial institutions subject to FinCEN’s regulations.

“These leaders are responsible for understanding an institution’s responsibilities regarding compliance with the BSA and creating a culture of compliance at that institution. The commitment of an organization’s leaders should be visible within the organization, as such commitment influences the attitudes of others within the organization,” the advisory said.

It also said that any financial institution can strengthen its Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance culture by ensuring that its leadership actively supports and understands that the effort to manage and mitigate BSA/AML deficiencies and risks are not compromised by revenue interests.

Every senior executive and leader of the organizations must also know how its reporting is used and how the compliance program is being tested.

And such testing should be performed by an independent, unbiased and competent party, the advisory said.

FinCEN also stressed the importance of information-sharing among the various departments within an organization, and each department with the compliance team, to further BSA/AML compliance efforts.

And it underscored the the need for firms to provide adequate human and technological resources to their compliance staff.

FinCEN said it was sharpening its focus on the gaming industry, broker-dealers, money services businesses, and other non-bank institutions, noting that each institution should incorporate its guidance “in a manner commensurate with their risk profile and business model.”

On Tuesday, FinCEN director Jennifer Shasky Calvary followed up the advisory in a speech that exhorted financial firms to create risk-based AML regimes.

She said FinCEN’s recent guidance to firms about when to file a Suspicious Activity Report (SAR) should be consulted, as new tips on dealing with marijuana-related businesses and those targeted at common carriers of currency (like armored vehicles) are important for compliance professionals to understand.

“Once you have a strong culture in place, including the support of your institution’s leadership, you have a firm foundation on which to build an effective program,” she reminded listeners.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.