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Mutual Evaluation Report United States 2016 Anti-money laundering and counter-terrorist financing measures United States Mutual Evaluation Report December 2016 The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing standard.and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CTF) For more information about the FATF, please visit the website: www.fatf-gafi.org organisation, whose members and observers are committed to the effective implementation and The Asia/Pacific Group on Money Laundering (APG) is an autonomous and collaborative international enforcement of internationally accepted standards against money laundering and the financing of Forterrorism, more information in particular about the FATF the APG, Recommendations. please visit the website: www.apgml.org This document and/or any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. This assessment was adopted by the FATF at its October 2016 Plenary meeting. Citing reference: FATF (2016), Anti-money laundering and counter-terrorist financing measures - United States, Fourth Round Mutual Evaluation Report, FATF, Paris www.fatf-gafi.org/publications/mutualevaluations/documents/mer-united-states-2016.html © 2016 FATF and APG. All rights reserved. No reproduction or translation of this publication may be made without prior written permission. Applications for such permission, for all or part of this publication, should be made to the FATF Secretariat, 2 rue André Pascal 75775 Paris Cedex 16, France (fax: +33 1 44 30 61 37 or e-mail: ). Photocredits coverphoto: © Joe [email protected] CONTENTS EXECUTIVE SUMMARY ............................................................................................................................. 3 A. Key Findings ..................................................................................................................................... 3 B. Risks and General Situation .............................................................................................................. 5 C. Overall Level of Effectiveness and Technical Compliance .............................................................. 6 D. Priority Actions ............................................................................................................................... 11 E. Compliance and Effectiveness Ratings ........................................................................................... 13 MUTUAL EVALUATION REPORT ........................................................................................................... 15 Preface ....................................................................................................................................................... 15 CHAPTER 1. ML/TF RISKS AND CONTEXT ...................................................................................... 17 ML/TF risks and Scoping of Higher Risk Issues ....................................................................................... 17 Materiality .................................................................................................................................................. 22 Structural Elements .................................................................................................................................... 22 Background and other Contextual Factors ................................................................................................. 23 CHAPTER 2. NATIONAL AML/CFT POLICIES AND COORDINATION......................................... 37 Key Findings and Recommended Actions ................................................................................................. 37 Immediate Outcome 1 (Risk, Policy and Coordination) ............................................................................ 39 CHAPTER 3. LEGAL SYSTEM AND OPERATIONAL ISSUES ........................................................ 49 Key Findings and Recommended Actions ................................................................................................. 49 Immediate Outcome 6 (Financial intelligence ML/TF) ............................................................................. 52 Immediate Outcome 7 (ML investigation and prosecution) ...................................................................... 63 Immediate Outcome 8 (Confiscation) ........................................................................................................ 75 CHAPTER 4. TERRORIST FINANCING AND FINANCING OF PROLIFERATION ........................ 87 Key Findings and Recommended Actions ................................................................................................. 87 Immediate Outcome 9 (TF investigation and prosecution)........................................................................ 89 Immediate Outcome 10 (TF preventive measures and financial sanctions) .............................................. 99 Immediate Outcome 11 (PF financial sanctions) ..................................................................................... 107 CHAPTER 5. PREVENTIVE MEASURES .......................................................................................... 117 Key Findings and Recommendations ...................................................................................................... 117 Immediate Outcome 4 (Preventive Measures) ......................................................................................... 118 CHAPTER 6. SUPERVISION ............................................................................................................... 135 Key Findings and Recommended Actions ............................................................................................... 135 Immediate Outcome 3 (Supervision) ....................................................................................................... 136 CHAPTER 7. LEGAL PERSONS AND ARRANGEMENTS .............................................................. 153 Key Findings and Recommended Actions ............................................................................................... 153 Immediate Outcome 5 (Legal Persons and Arrangements) ..................................................................... 155 CHAPTER 8. INTERNATIONAL COOPERATION ............................................................................ 163 Key Findings and Recommended Actions ............................................................................................... 163 Immediate Outcome 2 (International Cooperation) ................................................................................. 163 Anti-money laundering and counter-terrorist financing measures in the United States – 2016 © FATF and APG 2016 1 TECHNICAL COMPLIANCE ANNEX..................................................................................................... 176 Recommendation 1 - Assessing Risks and applying a Risk-Based Approach ......................................... 176 Recommendation 2 - National Cooperation and Coordination ................................................................ 179 Recommendation 3 - Money laundering offense ..................................................................................... 180 Recommendation 4 - Confiscation and provisional measures ................................................................. 183 Recommendation 5 - Terrorist financing offense ................................................................................... 186 Recommendation 6 - Targeted financial sanctions related to terrorism and terrorist financing .............. 188 Recommendation 7 – Targeted financial sanctions related to Proliferation ............................................ 192 Recommendation 8 – Non-profit organizations (NPOs) ......................................................................... 194 Recommendation 9 – Financial institution secrecy laws ......................................................................... 196 Recommendation 10 – Customer due diligence ...................................................................................... 197 Recommendation 11 – Record-keeping ................................................................................................... 205 Recommendation 12 – Politically exposed persons ................................................................................. 207 Recommendation 13 – Correspondent banking ....................................................................................... 208 Recommendation 14 – Money or value transfer services ........................................................................ 209 Recommendation 15 – New technologies ................................................................................................ 210 Recommendation 16 – Wire transfers ...................................................................................................... 211 Recommendation 17 – Reliance on third parties ..................................................................................... 214 Recommendation 18 – Internal controls and foreign branches and subsidiaries ....................................
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