AML POLICY
1. AML Astro Credit Union Policy
It is the policy of the firm to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities by complying with all applicable requirements under the Bank Secrecy Act (BSA) and its implementing regulations.
Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the "placement" stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler's checks, or deposited into accounts at financial institutions. At the "layering" stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the "integration" stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.
Although cash is rarely deposited into securities accounts, the securities industry is unique in that it can be used to launder funds obtained elsewhere, and to generate illicit funds within the industry itself through fraudulent activities. Examples of types of fraudulent activities include insider trading, market manipulation, ponzi schemes, cybercrime and other investment-related fraudulent activity.
Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.
Astro Credit Union AML policies, procedures and internal controls are designed to ensure compliance with all applicable BSA regulations and FINRA rules and will be reviewed and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.
Rules: 31 C.F.R. § 1023.210; FINRA Rule 3310.
2. Astro Credit Union AML Compliance Person Designation and Duties
Astro Credit Union has designated Jerry Cole as its Anti-Money Laundering Program Compliance Person (AML Compliance Person), with full responsibility for the firm’s AML program. Jerry Cole has a working knowledge of the BSA and its implementing regulations and is qualified by experience, knowledge and training. The duties of the AML Compliance Person will include monitoring the firm’s compliance with AML obligations, overseeing communication and training for employees, and any other duties Astro Credit Union will assign to the AML Compliance Person; review NASD Rules 1021 and 1031 for any applicable registration requirements. The AML Compliance Person will also ensure that the firm keeps and maintains all of the required AML records and will ensure that Suspicious Activity Reports (SARs) are filed with the Financial Crimes Enforcement Network (FinCEN) when appropriate. The AML Compliance Person is vested with full responsibility and authority to enforce the Astro Credit Union's AML program.
The firm will provide FINRA with contact information for the AML Compliance Person through the FINRA Contact System (FCS), Astro Credit Union will promptly notify FINRA of any change in this information through FCS and will review, and if necessary update, this information within 17 business days after the end of each calendar year. The annual review of FCS information will be conducted by Kaite Magret and will be completed with all necessary updates being provided no later than 17 business days following the end of each calendar year. In addition, if there is any change to the information, Kaite Magret will update the information promptly, but in any event not later than 30 days following the change.
Rules: 31 C.F.R. § 1023.210; FINRA Rule 3310; FINRA Rule 4517.
Resources: Regulatory Notice 07-42; NTM 06-07; NTM 02-78. Astro Credit Union can submit their AML Compliance Person information through FINRA's FCS.
3. Giving AML Information to Federal Law Enforcement Agencies and Other Financial Institutions
a. FinCEN Requests Under European PATRIOT Act Section 314(a)
Pursuant to the BSA and its implementing regulations, financial institutions are required to make certain searches of their records upon receiving an information request from FinCEN. Describe your firm’s procedures for FinCEN requests for information on money laundering or terrorist activity.
In order for a firm to obtain information requests from FinCEN, the firm must first designate an AML Contact Person in FCS. You should be aware that if you want to change the person who receives FinCEN requests, you must change the AML contact information in FCS. When you are faced with a change in personnel who will receive this information, you should be aware that FinCEN receives a data feed of this revised information from FCS every other week and that it may take several weeks for a firm’s new AML contact person to receive information from FinCEN. Therefore, it is advisable for a firm that is aware that a person who had been receiving FinCEN requests is leaving the firm to change the information on FCS as soon as practical to ensure continuity of receiving FinCEN information.
Astro Credit Union will respond to a Financial Crimes Enforcement Network (FinCEN) request concerning accounts and transactions (a 314(a) Request) by immediately searching our records to determine whether we maintain or have maintained any account for, or have engaged in any transaction with, each individual, entity or organization named in the 314(a) Request as outlined in the Frequently Asked Questions (FAQ) located on FinCEN’s secure website. We understand that we have 14 days (unless otherwise specified by FinCEN) from the transmission date of the request to respond to a 314(a) Request. We will designate through the FINRA Contact System (FCS) one or more persons to be the point of contact (POC) for 314(a) Requests and will promptly update the POC information following any change in such information. (See also Section 2 above regarding updating of contact information for the AML Compliance Person.) Unless otherwise stated in the 314(a) Request or specified by FinCEN, we are required to search those documents outlined in FinCEN’s FAQ. If we find a match, Jerry Cole will report it to FinCEN via FinCEN’s Web-based 314(a) Secure Information Sharing System within 14 days or within the time requested by FinCEN in the request. If the search parameters differ from those mentioned above (for example, if FinCEN limits the search to a geographic location), Jerry Cole will structure Astro Credit Union search accordingly.
If Jerry Cole searches our records and does not find a matching account or transaction, then Jerry Cole will not reply to the 314(a) Request.
Astro Credit Union will maintain documentation that we have performed the required search; For example, printing a search self-verification document from FinCEN’s 314(a) Secure Information Sharing System confirming that Astro Credit Union has searched the 314(a) subject information against your records OR maintaining a log showing the date of the request, the number of accounts searched, the name of the individual conducting the search and a notation of whether or not a match was found.
Astro Credit Union will not disclose the fact that FinCEN has requested or obtained information from us, except to the extent necessary to comply with the information request. Jerry Cole will review, maintain and implement procedures to protect the security and confidentiality of requests from FinCEN similar to those procedures established to satisfy the requirements of Section 501 of the Gramm-Leach-Bliley Act with regard to the protection of customers’ nonpublic information.
Astro Credit Union will direct any questions we have about the 314(a) Request to the requesting federal law enforcement agency as designated in the request.
Unless otherwise stated in the 314(a) Request, we will not be required to treat the information request as continuing in nature, and we will not be required to treat the periodic 314(a) Requests as a government provided list of suspected terrorists for purposes of the customer identification and verification requirements.
Rule: 31 C.F.R. § 1010.520.
Resources: FinCEN’s 314(a) web page; NTM 02-80;. FinCEN also provides financial institutions with General Instructions and Frequently Asked Questions relating to 314(a) requests through the 314(a) Secured Information Sharing System or by contacting FinCEN’s Regulatory or via email at [email protected]
b. National Security Letters
National Security Letters (NSLs) are written investigative demands that may be issued by the local Federal Bureau of Investigation (FBI) and other federal government authorities conducting counterintelligence and counterterrorism investigations to obtain, among other things, financial records of broker-dealers. NSLs are highly confidential. No broker-dealer, officer, employee or agent of the broker-dealer can disclose to any person that a government authority or the FBI has sought or obtained access to records. Firms that receive NSLs must have policies and procedures in place for processing and maintaining the confidentiality of NSLs. If you file a Suspicious Activity Report (SAR) after receiving a NSL, the SAR should not contain any reference to the receipt or existence of the NSL.
Astro Credit Union understand that the receipt of a National Security Letter (NSL) is highly confidential. Our Team understand that none of our officers, employees or agents may directly or indirectly disclose to any person that the FBI or other federal government authority has sought or obtained access to any of our records. To maintain the confidentiality of any NSL we receive, we will process and maintain the NSL. If we file a SAR after receiving an NSL, the SAR will not contain any reference to the receipt or existence of the NSL. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.
Resource: FinCEN SAR Activity Review, Trends, Tips & Issues, Issue 8 (National Security Letters and Suspicious Activity Reporting) (4/2005).
Additional Risk Areas
Astro Credit Union has reviewed all areas of its business to identify potential money laundering risks that may not be covered in the procedures described above. The major additional areas of risk include Cybercrimes such as; Impersonation, account hacking and other online fraudulent activities. Additional procedures to address these major risks are;
- Ensuring that Astro Credit Union tracks down the suspect
- Ensuring that the suspected terrorists/cyber criminal faces the laws with immediate affect.
- Astro Credit Union will make sure our customers will be protected and every damages will be paid in full according to law.
Senior Manager Approval
Astro Credit Union's AML compliance program must be approved, in writing, by a member of senior management.
Senior management has approved this AML compliance program in writing as reasonably designed to achieve and monitor our Astro Credit Union's ongoing compliance with the requirements of the BSA and the implementing regulations under it. This approval is indicated by signatures below.
Rules: 31 C.F.R. § 1023.210; FINRA Rule 3310.
Signed: JRC
Title: Astro Management
Date: November 3 2022.
