This page is a practical guide to U.S. AML compliance for financial institutions—covering BSA/AML compliance software, FinCEN SAR filing requirements, and OFAC sanctions screening, with clear regulatory expectations.
Last Updated: 2025-09-25
The United States maintains a robust AML/CFT framework centered on the Bank Secrecy Act of 1970 (BSA) and the USA PATRIOT Act of 2001. The U.S. Financial Crimes Enforcement Network (FinCEN) – a bureau of the Treasury Department – administers the BSA by issuing regulations, collecting financial intelligence (e.g. Suspicious Activity Reports), and coordinating AML efforts. Federal functional regulators (such as the Federal Reserve, OCC, FDIC, and NCUA for banks and credit unions, and the SEC and FINRA for securities firms) examine institutions for BSA/AML compliance, while the Department of Justice handles criminal enforcement of AML laws. The Office of Foreign Assets Control (OFAC) separately administers and enforces U.S. economic sanctions, prohibiting dealings with designated countries, entities, and individuals in support of U.S. foreign policy and national security. All banks, money services businesses (MSBs), securities broker-dealers, credit unions, fintech payment companies, and other covered financial institutions must comply with these laws and regulations. Key obligations include implementing customer due diligence programs, recordkeeping, reporting of large currency transactions (CTRs) and suspicious activities (SARs) to FinCEN, screening customers and transactions against sanctions lists, and maintaining strong internal controls and governance to ensure compliance.
Given these stringent requirements and oversight, U.S. institutions are increasingly turning to advanced BSA/AML compliance software – including transaction monitoring software and OFAC sanctions screening software – to meet their obligations efficiently.
The H3M KROTON compliance platform’s modules (including KYC Miner, Scenario Manager, Sanctions Miner, the RUMI adverse media screening tool, Link Miner, and Case Manager) digitize and automate key compliance workflows. For example, the platform verifies customer identities and beneficial owners during onboarding (fulfilling CIP/KYC requirements), monitors account activity in real time against risk-based rules to flag suspicious patterns, continuously screens clients and transactions against OFAC sanctions and PEP lists, and scours open sources for any adverse media on clients or beneficial owners. When a suspicious case is identified, the built-in Case Manager facilitates end-to-end investigation workflow and preparation of SAR filings (via FinCEN’s BSA E-Filing system). All compliance actions are recorded in audit logs and visualized through integrated dashboards, giving management real-time oversight and traceability. By integrating customer due diligence, transaction monitoring, sanctions screening, and case management in one platform, KROTON enables U.S. financial institutions to fulfill FinCEN and OFAC requirements more efficiently while strengthening their risk controls and audit readiness.
This report was prepared by H3M Analytics in collaboration with deRisk Partners.
Financial institutions generally must file a SAR within 30 calendar days of detecting the suspicious activity. If the suspect’s identity is not yet known, the timeframe can be extended to 60 days, but as a rule the SAR should be submitted to FinCEN as soon as possible and no later than the 30-day deadline.
Any cash transaction or series of related cash transactions that total $10,000 or more in one business day (such as deposits or withdrawals) triggers a CTR filing. Banks and other financial institutions must file a CTR with FinCEN for these currency transactions, generally within 15 days of the transaction.
FinCEN (a bureau of the U.S. Treasury) is the lead AML regulator administering the Bank Secrecy Act and its implementing regulations. Day-to-day supervision is carried out by federal regulators – for example, the OCC, Federal Reserve, FDIC, and NCUA examine banks and credit unions, while the SEC and FINRA oversee AML compliance for securities and brokerage firms. The Office of Foreign Assets Control (OFAC) separately enforces U.S. sanctions laws. Serious AML violations may also lead to investigations and prosecutions by the U.S. Department of Justice.
Penalties can be very severe. Financial institutions that fail to comply with BSA/AML requirements can face hefty civil fines (often millions of dollars) and regulatory enforcement actions such as cease-and-desist orders. In serious cases, individuals involved may face criminal penalties – including fines up to $250,000 per violation and five years imprisonment (or up to $500,000 and ten years if the violation is part of illegal activity). Violations of OFAC sanctions also carry strict penalties, including substantial fines for each violation. In short, non-compliance can result in major financial and legal consequences.
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