Comment on this discussion post, summarize and explain why you agree with itCompliance boils down to following regulations, so Anti$-$Money Laundering $($AML$)$ compliance means following AML regulations. But nobody wants to just hear $$Follow the rules.$$ You want to know more. AML compliance is imperative for multiple reasons. To give you a real$-$world situation, I will use my agency as an example to explain how this week$$s reading ties into my agency$$s compliance program... and how it does not. I will also share the advantages and disadvantages of AML compliance based on my experience.

My agency is a money services business $($MSB$).$ MSBs are considered a high AML risk $($ACFCS$,2014,$ p$.236*).$ In $2023,$ we sold over $63\mathrm{.}3$ million money orders, averaging $209,000$ money orders per day. We also sell open$-$loop and closed$-$loop stored$-$value $($gift$)$ cards. Financial instruments are considered high$-$risk products $($ACFCS$,2014,$ pp$.236-237*).$ As an MSB$,$ we are required to comply with federal AML regulations, including the Bank Secrecy Act $($BSA$),$ follow regulatory guidance, and adhere to U$.$S$.$ sanctions as outlined by the Office of Foreign Assets Control $($OFAC$).$ Our regulator is the U$.$S$.$ Financial Intelligence Unit $($FIU$),$ which is the Financial Crimes Enforcement Network $($FinCEN$).$ As an MSB$,$ the agency is required to be registered with FinCEN and have an effective AML compliance program in place. My agency$$s AML compliance program is described as consisting of the four required pillars listed below, which were also mentioned in this week$$s reading $($ACFCS$,2014,$ p$.234*).$

Dedicated, qualified BSA$/$AML Compliance Officer $($self$-$explanatory$)$

Written comprehensive AML policies, procedures and internal controls to effectively and timely detect, deter and report financial activity potentially related to money laundering, terrorist financing or proliferation financing

AML software is utilized to flag suspicious activity based on various combinations of criteria.AML software triggers Suspicious Activity Reports $($SARs$)$ and Currency Transaction Reports $($CTRs$),$ which are filed with FinCEN in batch filings.Various internal reports provide additional intelligence around activity requiring further research $($e$.$g$.,$ elder financial exploitation$).$Internal controls are in place at point$-$of$-$sale to prompt collection of customer identification and completion of Funds Transactions Reports when transactions meet the reporting threshold.Internal controls prompt frontline internal Suspicious Transaction Reports based on observations and answers to prompts by retail personnel.Both preventive $($e$.$g$.,$ annual risk assessment$)$ and detective $($e$.$g$.,$ investigation of unusual activity$)$ controls exist.Compliance personnel follow procedures to ensure all BSA$/$AML$-$related forms are completed timely and properly.Compliance personnel follow procedures to respond to all law enforcement requests for BSA$/$AML supporting documentation.Compliance personnel conduct sanctions monitoring of transactional activity against OFAC$$s Specially Designated Nationals $($SDN$)$ list $($OFAC$,2024).$BSA$/$AML Compliance Officer follows procedures to respond to all subpoenas.Analyst personnel follow procedures to conduct investigative research and prepare$/$file Continuing Activity Reports $($a form of SARs$)$ as discrete filings with FinCEN.Transactional monitoring software and reports are continually being enhanced and improved based on risk appetite, trends and typologies; this includes ongoing testing of current features.Internal confidential policy and procedure manuals are maintained by BSA$/$AML staff, reviewed annually and updated as required.