Bank Secrecy Act (BSA) is a United States law. The purpose is to prevent criminals from using banks for money laundering. Banks must provide authorities with records. This occurs when people make suspicious money transactions above $10,000. The law facility authorities’ understanding of these transactions.

How the Bank Secrecy Act Works?

Transactions over $10,000 aren’t automatically recorded. The Internal Revenue Service (IRS)  requires filling the Form 8300 for cash deals above $10,000. It doesn’t matter whether from one or more transactions. This regulation covers individuals, businesses, and  corporations.

One must submit the Form 8300 within 15 days after a cash transaction. But only if it involves money transactions in the United States.

Also, a court order is not required for law enforcement agencies to access the data. Hence, the BSA has gained criticism. Because there isn’t enough criteria defining what is considered suspicious activity.

How the Bank Secrecy Act (BSA) Affects Banks?

FinCEN recognizes agencies to operate criminal investigations using BSA data. The BSA is valuable in protecting people from fraud and other unlawful concerns in the United States. Reducing crime of these schemes has been a priority for both the law enforcement.

How Financial Institutions Comply with It?

Financial institutions must submit Suspicious Activity Reports. The BSA E-Filing System can be used until to complete this report.

A financial institution must file the report within 30 days to submit a suspicious activity report. A financial institution can postpone filling a suspicious activity report. It has time for up to 30 calendar days in order to find a suspect. If one was not identified on the date of the incident, reporting cannot be postponed for longer than 60 days. It starts from the date on which a reportable transaction was made.

Financial institutions are obligated by the Bank Secrecy Act (BSA) to support American government authorities in their efforts to identify and stop money laundering, including:

• Maintain documentation of all cash acquisitions of negotiable instruments.
• Report any cash transactions that total more than $10,000 (the daily aggregate amount) and report any unusual conduct that could be a sign of illegal activity (such as tax evasion or money laundering).
• The USA Patriot Act, which mandates that all banks implement a client identification scheme as part of their BSA compliance procedure, is included into the BSA through an amendment.