The US Federal Financial Institutions Examination Council (FFIEC) has released several updates to the Bank Secrecy Act/anti-money-laundering 'examination' (regulatory inspection) manual. The idea is to offset some of the uncertainty caused by the Coronavirus.

The regulators have written: "The manual update, which supports tailored examination work, has been in process for an extended period and should not be interpreted as new instructions or as a new or increased focus." The exact meaning of this is unclear.

The updates establish no new obligations for firms. Instead, they tell examiners how to "risk-focus" BSA/AML visists to firms and how to assess banks' BSA/AML compliance.

The Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Treasury’s Financial Crimes Enforcement Network and the State Liaison Committee worked together on the updates.

Significant revisions include the following.

Risk-focused BSA/AML supervision. The manual tells examiners how to tailor BSA/AML examinations to this-or-that bank’s risk profile, dictating the shape of testing procedures, risk-focused testing and analytical reviews.   

Assessments of firms' BSA/AML compliance efforts. The manual tells examiners how to determine whether these are adequate, containing a minimum set of procedures for 'full-scope' BSA/AML examinations. It contains separate sections about internal controls, independent testing, BSA compliance officers and training.

BSA/AML risk assessments. Examiners, who in the US do not have any particular reputation for competence, are told how to identify specific risk categories (e.g., products, services, customers and geographic locations) that are unique to the bank in question and how to analyse the information that they glean, the better to assess the risks inherent in each category. There is no particular method or format that a bank must use.

How to reach conclusions and finish off. Minor weaknesses, deficiencies and technical infractions alone are not indicative of a bad effort to comply. New and revised sections of the manual are marked with a note in the table of contents that says '2020' and in the notes on the FFIEC BSA/AML 'InfoBase.' More updates are to come.