Bank Secrecy ActBSA

The foundational US anti-money-laundering law.

It is the law that requires banks and other financial businesses to keep records and report certain transactions, so authorities can trace dirty money.

US legislation requiring recordkeeping and reporting to help detect money laundering and financial crime. It was enacted in 1970 and has been amended several times, including by the USA PATRIOT Act of 2001 and the Anti-Money Laundering Act of 2020.

The act and its rules create several core obligations:

• Customer identification, which requires a program to identify and verify customers who open accounts.
• Currency transaction reports (CTRs), which require reports of cash transactions above $10,000.
• Suspicious activity reports (SARs), which require reports of activity that may indicate money laundering or other crime.
• Recordkeeping, which requires institutions to keep records that help investigators.
• AML programs, which require written programs with internal controls, a compliance officer, training, and independent testing.

The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, administers the act and writes much of its detailed regulation.

The Bank Secrecy Act sits next to terms that are easy to mix up:

• Customer identification program (CIP) is the identification requirement that the law creates.
• Suspicious activity report (SAR) is the filing the law requires for suspicious activity.
• Structuring / smurfing is breaking up transactions to avoid the reporting threshold, which the law makes a crime.