NYDFS Adopts Final Anti-Terrorism and Anti-Money Laundering Regulation

Anti-Money Laundering Bank Secrecy Act Sanctions

On June 30, the NYDFS adopted a final rule that requires regulated financial institutions to maintain a transaction monitoring program for potential BSA/AML violations and a filtering program intended to ban transactions prohibited by federal economic and trade sanctions. Further, the Board of Directors or Senior Officer(s) are required to submit annually, by April 15, a Board Resolution or Compliance Officer Finding, confirming the steps taken to ascertain compliance with the regulation and stating that, “to the best of the [Board or Officer’s] knowledge, the Transaction Monitoring and Filtering Program complies with [the regulation].” The law applies to Regulated Institutions, which include banks, trust companies, private bankers, savings banks and savings and loan associations chartered pursuant to the New York Banking Law, and all branches and agencies of foreign banking corporations licensed under the Banking Law to conduct banking operations in New York; and non-banks, which include check cashers and money transmitters licensed under the Banking Law.

Each Regulated Institution’s transaction monitoring system must be designed, reviewed, updated, and tested in accordance with the detailed parameters of the Rule. The required Filtering Program may be manual or automated, and must be “reasonably designed for the purpose of interdicting transactions that are prohibited by OFAC.” Like the Transaction Monitoring Program, the Filtering Program must also be designed, reviewed, updated, and tested in accordance with the detailed parameters of the Rule.