Bank Secrecy Act (BSA)

The Bank Secrecy Act (BSA) is a federal law enacted in the United States to prevent money laundering and other financial crimes. It requires financial institutions, including banks, to implement and maintain specific procedures and controls to detect and report suspicious activities that may indicate money laundering or other illegal activities.

The BSA mandates that financial institutions establish a robust anti-money laundering (AML) program, including customer identification and due diligence, ongoing monitoring, and reporting suspicious transactions or activities known as Suspicious Activity Reports (SARs). It also requires financial institutions to maintain records of transactions, such as cash deposits and withdrawals, wire transfers, and account openings, to facilitate further investigations if necessary. These measures help law enforcement agencies to trace and prevent money laundering, terrorist financing, tax evasion, and other financial crimes, therefore safeguarding the integrity of the financial system. Compliance with the BSA is overseen by the Financial Crimes Enforcement Network (FinCEN), which enforces the regulations and ensures that financial institutions meet their obligations to fight against money laundering and other illicit activities. Overall, the Bank Secrecy Act serves as a critical tool in combating financial crimes by promoting transparency, reporting, and cooperation between financial institutions and law enforcement agencies.

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