Which act provides the foundational framework for anti-money laundering (AML) compliance in the United States?

Which act provides the foundational framework for anti-money laundering (AML) compliance in the United States?

• A. Bank Secrecy Act
• B. Patriot Act
• C. Dodd-Frank Act
• D. Sarbanes-Oxley Act

Answer: (A)

The Bank Secrecy Act provides the foundation for AML compliance in the United States. Enacted in 1970, it established the basic requirements for financial institutions to detect and deter money laundering. It mandates a formal AML program within institutions, appointing a designated compliance officer, ongoing employee training, and the retention and reporting of records. Importantly, it requires reporting large cash transactions through Currency Transaction Reports and reporting suspicious activity through Suspicious Activity Reports, and it introduced customer identification program requirements. While later laws like the Patriot Act expanded and strengthened these measures and others like Dodd-Frank and Sarbanes-Oxley addressed additional financial and governance aspects, the BSA is the starting point that forms the core framework for AML compliance.