Evaluate the level of exceptions to determine whether the bank is effectively implementing its CIP (making or approving exceptions cannot be allowed by policy, however, isolated, non-systemic errors [such as an insignificant number of data entry errors] may be deemed as not compromising the program’s effectiveness). Obtain a written description of the bank’s rationale for exempting existing customers from its CIP Based on a risk assessment, prior examination reports, and a review of the bank’s audit, select a sample of relationships with third parties upon whom the bank relies or uses to perform its CIP (or portions of the CIP), if applicable. If the bank is using the provision:” “reliance Determine whether the third party is a federally regulated financial institution subject to the BSA/AML program requirements of 31 U.S.C. 5318(h). Review the contract between the parties, annual certifications, and other information, such as the third party’s CIP. Determine whether reliance is reasonable. The contract and certification will provide a standard for a bank to demonstrate that it has satisfied the “reliance provision,” unless the examiner has reason to believe that the bank’s reliance is not reasonable (e.g., the third party has been subject to an enforcement action for AML or BSA deficiencies or violations).
Evaluate the level of exceptions to determine whether the bank is effectively implementing its CIP (making or approving exceptions cannot be allowed by policy, however, isolated, non-systemic errors [such as an insignificant number of data entry errors] may be deemed as not compromising the program’s effectiveness). Obtain a written description of the bank’s rationale for exempting existing customers from its CIP Based on a risk assessment, prior examination reports, and a review of the bank’s audit, select a sample of relationships with third parties upon whom the bank relies or uses to perform its CIP (or portions of the CIP), if applicable. If the bank is using the “reliance provision:” Determine whether the third party is a federally regulated financial institution subject to the BSA/AML program requirements of 31 U.S.C. 5318(h). Review the contract between the parties, annual certifications, and other information, such as the third party’s CIP. Determine whether reliance is reasonable. The contract and certification will provide a standard for a bank to demonstrate that it has satisfied the “reliance provision,” unless the examiner has reason to believe that the bank’s reliance is not reasonable (e.g., the third party has been subject to an enforcement action for AML or BSA deficiencies or violations).
BSA_Audit_Worksheets.docx