A significant AML compliance threat awaits the lenders giving financial support to small businesses owing to the coronavirus outbreak as fulfilling the obligations to pass regulatory scrutiny may not be as easy as thought. The Bank Secrecy Act authorizes the Secretary of Treasury to issue guidelines requiring certain financial institutions to keep records and file reports that the secretary determines its level of usefulness in criminal or offensive proceedings. The BSA captures banks, credit unions, thrift institutions, certain broker-dealers, currency exchanges, insurance companies, money transmitters, and loan or finance companies as financial institutions.
Henceforth, in all cases companies involved in the $350 billion Paycheck Protection Program established to cushion the effect of coronavirus must as a matter of responsibility must comply with some requirements under the BSA. The requirements include observing AML Program Requirements which include designating a compliance officer who will implement the program effectively, installing policies for internal control, training appropriate persons about their responsibilities and independent testing.
The other requirements under the BSA that must be adhered to include reporting suspicious activity which is above $5000 or more to the Financial Crimes Enforcement Network and also maintaining records that can assist law enforcement in tracing any suspicious transactions.
