31 USC §§ 5311 + 5318 - Bank Secrecy Act Purpose + AML Program Four Pillars

What 31 USC §§ 5311 + 5318 - Bank Secrecy Act Purpose + AML Program Four Pillars requires

31 USC §§ 5311 (Declaration of Purpose) and 5318 (Compliance Program Requirements) form the substantive heart of the Bank Secrecy Act (Pub. L. 91-508, signed 26 October 1970, as substantially revised by USA PATRIOT Act 2001 Pub. L. 107-56 and Anti-Money Laundering Act of 2020 within the NDAA FY2021 Pub. L. 116-283 Div F Title LXI § 6101(a) effective 1 January 2021): §5311 establishes five legislative purposes - (1) requiring reports and records useful in criminal, tax, and regulatory investigations and counterintelligence activities to protect against terrorism; (2) preventing money laundering and terrorism financing through risk-based programs by financial institutions; (3) facilitating tracking of criminally-sourced money or funds intended for criminal/terrorist activity; (4) assessing money laundering, terrorism finance, tax evasion, and fraud risks to safeguard the US financial system and national security; (5) establishing information-sharing frameworks among financial institutions, regulators, Treasury, and law enforcement; §5318(h) requires anti-money laundering programs with the Four Pillars - (i) internal policies, procedures, and controls; (ii) designation of a compliance officer; (iii) ongoing employee training program; (iv) independent audit function to test programs - reasonably designed to assure and monitor compliance with AML requirements; the AMLA 2020 added a fifth pillar in many regulatory implementations - Customer Due Diligence (CDD) with risk-based monitoring proportionate to customer risk profiles; §5318(g) requires Suspicious Activity Report (SAR) filing for transactions involving funds from illegal activity, transactions designed to evade BSA requirements, or transactions with no apparent lawful purpose; §5318(i) requires Currency Transaction Reports (CTR) for cash transactions exceeding $10,000; §5318(l) requires Customer Identification Programs (CIP) under USA PATRIOT Act §326 implemented via FinCEN regulations at 31 CFR 1020.220 for banks, 1023.220 for broker-dealers, and parallel parts for other financial institutions.

Pillar: Financial Crime, AML & Sanctions · Authority: United States Congress (Bank Secrecy Act, Pub. L. 91-508, 26 October 1970; USA PATRIOT Act 2001 Pub. L. 107-56; Anti-Money Laundering Act of 2020 within NDAA FY2021 Pub. L. 116-283 Div F Title LXI § 6101(a) effective 1 January 2021; codified at 31 USC §§ 5311 + 5318) · Version: 1.0.0 · Last updated: 2026-06-02

Primary source: https://www.govinfo.gov/link/uscode/31/5318

SHA-256 integrity: f2cafed5ea2dfd89fc16bad48a57c5ba454d86bfdf6d803477b2419620e542e3

Primary Citations — 5 traced to source

• 31 USC §5311 DECLARATION OF PURPOSE (AMLA 2020 REVISION): five legislative purposes - (1) require reports/records useful in criminal, tax, regulatory investigations and counterintelligence activities to protect against terrorism; (2) prevent money laundering and terrorism financing through risk-based programs by financial institutions; (3) facilitate tracking of criminally-sourced money or funds intended for criminal/terrorist activity; (4) assess money laundering, terrorism finance, tax evasion, and fraud risks to safeguard the US financial system and national security; (5) establish information-sharing frameworks among financial institutions, regulators, Treasury, and law enforcement
• 31 USC §5318(h)(1) ANTI-MONEY LAUNDERING PROGRAM FOUR PILLARS: financial institutions shall establish AML programs that include (A) the development of internal policies, procedures, and controls; (B) the designation of a compliance officer; (C) an ongoing employee training program; and (D) an independent audit function to test programs

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