The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Treasury Department and the delegated administrator of the Bank Secrecy Act.  Among its many responsibilities, FinCEN issues 314(a) requests, approximately every two weeks.  When these notices, which identify individuals and entities suspected of illegal activities, are received, each Broker/Dealer is required to access the secure website at https://www.fincen.gov/314a/, log-in and review the lists of businesses and individuals to determine if there is a relationship with any party identified on the system.  To ensure that proper personnel receives these e-mail notifications, a firm must make sure the individual is appropriately reflected on the NASD contact system, that their email address is properly recorded and that the firm’s email server does not filter the notice as spam or junk mail.  These requests are not to be printed or maintained at the firm and the information listed is to be kept confidential as the individuals and firms listed are only “suspected” of criminal activity.  For more information about FinCEN you can log onto their website at www.FinCEN.gov.

The Office of Foreign Assets Control (OFAC) is also a bureau of the U.S. Treasury Department that administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals.  Each Broker/Dealer is required to do an OFAC search for each potential customer and employee to verify they are not on the government’s watch list and maintain evidence regarding the results of the search.  The NASD website has a direct link for this OFAC search in an easy format that provides the capability to do one search or multiple searches simultaneously.  The link for this is http://www.nasd.com/ofac/.  Information on OFAC was included in NASD NTM 97-4 and 97-35. For more information on OFAC you can visit their website at www.treasury.gov .

Many are asking what is the difference between FinCEN and OFAC.  Both are bureaus of the U.S. Treasury department; however, FinCEN requires searches for suspected criminals and OFAC queries identify known criminals.

What else do BD’s need to know with regard to FinCEN notices and OFAC checks? The firm’s AML compliance manual should provide specific procedures in relation to the review of FinCEN notices, keeping the NASD contact information up-to-date and the firm’s responsibilities with regard to OFAC.  If you have any questions about AML, please contact our Compliance Partners area at 603-434-3594 ext. 28 and speak with Beverly Fetcko.