AML Program

 

 
 
First State Financial Management, Inc.
Anti-Money Laundering (AML) Program: 
Compliance and Supervisory Procedures

 

 
1. Firm 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. Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful 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. Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal the origin or intended use of the funds, which will later be used for criminal purposes. 
 
 
2.  AML Compliance Officer Designation and Duties
 
The firm designates Susan M. Evans as its Anti-Money Laundering Program Compliance Officer, with full responsibility for the firm’s AML program.   Susan is qualified by experience, knowledge and training, including AML seminars and FINRA programs designed to help compliance officers monitor and correct all compliance problems. The duties of the AML Compliance Officer will include monitoring the firm’s AML compliance, overseeing communication and training for employees, keeping current AML procedures and arrange for annual testing. The AML Compliance Officer will also ensure that proper AML records are kept. When warranted, the AML Compliance Officer will ensure Suspicious Activity Reports (SARs) are filed. 
 
 
3.  Giving AML Information to Federal Law Enforcement Agencies and Other Financial Institutions
a.  FinCEN Requests Under PATRIOT Act Section 314
 
Under Treasury’s proposed regulations (published in the Federal Register on March 4, 2002), we will respond to a Financial Crimes Enforcement Network (FinCEN) request about accounts or transactions by reporting to FinCEN the identity of the specified individual or organization, the account number, all identifying information provided by the account holder when the account was established, and the date and type of transaction. We will report to FinCEN as soon as possible either by e-mail to patriot@fincen.treas.gov, by calling the Financial Institutions Hotline (1-866-556-3974), or by any other means that FinCEN specifies. 
 
 
b.  Sharing Information With Other Financial Institutions
We may share information about those suspected of terrorism and money laundering with other financial institutions for the purposes of identifying and reporting activities that may involve terrorist acts or money laundering activities. We will file with FinCEN an initial certification before any sharing occurs and annual certifications afterwards. We will use the certification form found at www.treas.gov/fincen. We will employ strict procedures both to ensure that only relevant information is shared and to protect the security and confidentiality of this information, including segregating it from the firm’s other books and records.
 
In addition to sharing information with other financial institutions about possible terrorist financing and money laundering, we will also share information about particular suspicious transactions with our clearing broker for purposes of determining whether one of us will file a SAR. In cases in which we file a SAR for a transaction that has been handled both by us and by the clearing broker, we may share with the clearing broker a copy of the filed SAR, unless it would be inappropriate to do so under the circumstances, such as where we filed a SAR concerning the clearing broker or one of its employees.
 
4.  Customer Identification an Verification
In addition to the information we must collect under FINRA Rules of Suitability and Books and Records, and SEC Rules, we will, at a minimum: verify, to the extent reasonable and practicable, the identity of any customer seeking to open an account; maintain records of information used to verify a customer's identity; and check that a customer does not appear on government terrorist lists, such as the list on Treasury's Office of Foreign Assets Control (OFAC) Web Site. The kinds of information that we will collect before opening different types of accounts are listed below.  
 
 
 
a.  Risk-Based Information On Various Account Types
We will collect the following information for all accounts, if applicable, for any person, entity or organization who is opening a new account (or is being granted trading authority over a new or existing account) and whose name is on the account or has authority over the account: the name and mailing and residential (or principal place of business) street address of the customer; the customer’s date of birth; and, for U.S. persons, the customer’s Social Security number or taxpayer identification number (including U.S. tax forms), or, for non-U.S. persons without a taxpayer identification number, an alien identification card number or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other biometric safeguard. Recognizing that different types of accounts pose different risks and trigger different requirements under the rules, we will gather the additional information specified below for each of the following categories of accounts we provide:
 
(1)   Individual Accounts –We will make reasonable efforts to obtain the customer’s net worth, annual income, occupation and employment data, such as the employer’s address, and the customer’s investment experience and objectives.  
 
(2)  Non-U.S. Person Accounts – We may inquire more fully depending on a number of factors, such as the country of origin of the account holder or persons authorized to trade. All such accounts will need to be pre-approved for investment activity.
 
(3)  Domestic Operating or Commercial Entities – We will collect information sufficient to determine the corporate or business entity’s identity, and the authority of its business representative to act on its behalf. 
 
 (4)  Domestic Trusts – We will identify the trustee, the activity the trust authorizes, and the authority of the trust’s representative to act on its behalf.
 
(5)  Foreign and Offshore Entities – We will identify the account holder and other persons or entities authorized to trade for the account and we will consider the entity’s country of incorporation, location and other factors to determine what additional identifying information is necessary and available. These accounts will need pre-approval before investment activity.
 
(6)  Institutional Accounts, Hedge Funds, Investment Funds and Other Intermediary Relationships – While our AML procedures cover institutional clients, we recognize that certain types of institutional accounts are different from retail accounts. Institutional accounts often are opened for financially sophisticated customers who trade frequently, in volume, and usually through an intermediary, some of whose AML policies and procedures are sufficient and verifiable. When dealing with an institutional client, we will consider whether it has an AML program and the quality of that program, the length and nature of our experience with the institution, and the history of the institution. In addition, in determining whether it is necessary to identify the investors of non-U.S. institutions, we will consider the regulation of the institution by its home country and whether the institution is located in a bank secrecy haven or a non-cooperative country. (See Sections 5 and 6 below for special procedures governing correspondent accounts for foreign shell banks and other foreign financial institutions and foreign private banking accounts.)
 
(7)  High Risk and Non-Cooperative Jurisdictions – We will especially scrutinize accounts that are located in problematic countries. We will check the lists and accompanying narrative information of the Financial Action Task Force (FATF) [http://www1.oecd.org/fatf/NCCT_en.htm], FinCEN [http://www.treas.gov/fincen/pub_main.html], and the “Major Money Laundering Countries” section of the “Money Laundering and Financial Crimes” part of the U.S. Department of State’s annual International Narcotics Control Strategy Report [http://www.state.gov/g/inl/rls/nrcrpt/2001/c6085.htm] to determine problematic countries and will factor this information into our decisions on whether to open or maintain accounts that are based in these jurisdictions. 
 
(8)  Senior Foreign Government/Public Officials – Firms must conduct enhanced scrutiny of accounts requested or maintained by or on behalf of senior foreign political figures (including their family members and close associates). This is addressed in greater detail below in Section 6 “Private Banking Accounts/Foreign Officials.” We will conduct enhanced due diligence of accounts of "senior foreign political figures," as well as their families and business associates, to detect and report transactions that involve the proceeds of foreign corruption. [For additional guidance see http://www.occ.treas.gov/ftp/bulletin/2001-9a.pdf]
 
(9)  Transferred Accounts – Although we are not required to verify the identity of a customer whose account is transferred to our firm if the customer does not initiate the transfer, we will still consider the scenarios above in deciding if the risks of a particular transferred account require our obtaining and verifying information from the transferred customer.
 
 
b.  Customers Who Refuse To Provide Information 
If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our firm will not open a new account and, will close any existing account. In either case, our Susan Evans will be notified so that we can determine whether we should report the situation to FinCEN. 
 
c.  Verifying Information
 
Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know the true identity of our customers by using risk-based procedures to verify and document the accuracy of the information we get about our customers. In verifying customer identity, we will analyze any logical inconsistencies in the information we obtain. 
 
We will verify customer identity through documentary evidence, non-documentary evidence, or both. We will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, we will supplement the use of documentary evidence by using the non-documentary means described below whenever possible. We may also use such non-documentary means, after using documentary evidence, if we are still uncertain about whether we know the true identity of the customer.
 
Appropriate documents for verifying the identity of natural persons include the following:
 
  • An unexpired driver’s license, passport, or other government identification showing nationality, residence, and photograph, or government issued identification showing nationality, residence and photograph. 
 
The following documents are appropriate for verifying the identity of businesses:
 
  • A certificate of incorporation, a government-issued business license, any partnership agreements, any corporate resolutions, or similar documents. 
 
Verification of customer identity through the use of non-documentary evidence is mandatory in the following situations: (1) when the customer is unable to present an unexpired identification card with a photograph or other biometric safeguard; (2) when the documents the customer presents for identification verification are unfamiliar to the firm; (3) when the customer and firm do not have face-to-face contact; and (4) when there are other circumstances that increase the risk that the firm will be unable to verify the true identity of the customer through documentary means. Under these circumstances, we will use the following non-documentary methods of verifying identity:
 
  • Contact the customer after the account has been opened (although we cannot rely solely on customer contact as a means for verification);
  • Obtain financial statements from the customer;
  • Compare information obtained from the customer against databases.
  • Compare information obtained from customer with information available from a trusted third-party source (such as a credit report);
  • Check references with other financial institutions; and
  • Any other non-documentary means deemed appropriate.
 
 
We will verify the information at the time new accounts are opened, if possible, but in most situations no later than five business days after opening. However, we recognize that there may be situations where even a five-day delay will be too long. Depending on the nature of the account and requested transactions, we may refuse to complete a transaction before we have verified the information, or in some instances when we need more time, we may restrict the types of transactions or dollar amount of transactions pending verification. We will document our verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancy in the identifying information. We will maintain those records for five years after the account has been closed or the customer's trading authority over the account has ended. 
 
As required under the BSA, we will record a current passport number or other valid government identification number for transfers or transmittals of $3,000 or more by or for non-resident alien accounts.
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d.  Using Government Provided Lists of Terrorists and Other Criminals.
 
Before opening an account, and on an ongoing basis, we will check to ensure that a customer does not appear on a list provided to us by the government, like Treasury’s OFAC “Specifically Designated Nationals and Blocked Persons” List (SDN List). We will also review existing accounts against these lists when they are updated and we will document our review.
 
In the event that we determine a customer, or someone with or for whom the customer is transacting, is on the SDN List or is from or engaging in transactions with a person or entity located in an embargoed country or region, we will reject the transaction and freeze the account and/or block the customer's assets and file a blocked assets and/or rejected transaction form with OFAC. We will also call the OFAC Hotline at 1-800-540-6322.
 
e.  Notice to Customers
The firm will provide notice to customers that it is requesting information from them to verify their identities, as required by Federal law.
 
f.  Additional Inquiries 
 
We recognize our obligations under suitability and fair dealing requirements to collect customer identification information. Depending on the nature of the account, we will take the following additional steps, to the extent reasonable and practicable, when we open the account: 
 
  • Inquire about the source of the customer’s assets and income so we can determine if the inflow and outflow of money and securities is consistent with the customer’s financial status.
 
  • Gain an understanding of what the customer’s likely trading patterns will be, so that any deviations from the patterns can be detected later on.
 
 
5.  Foreign Correspondent Accounts and Foreign Shell Banks
 
a.  Detecting and Closing Correspondent Accounts of Unregulated Foreign Shell Banks
 
We will not engage in any activity with Foreign Correspondent Accounts and Foreign Shell Banks. We will monitor all new accounts and activity to guarantee these type accounts are not opened by accident. Should they be opened by accident they will be frozen.
 
6.  Private Banking Accounts/Foreign Officials
We will not open or maintain any private banking accounts for foreign officials. We will monitor all new accounts and activity to guarantee these type accounts are not opened by accident. Should they be opened by accident they will be frozen.
 
 
7.  Supervisory Procedures for Opening Accounts
Our new account opening procedure is modified to collect and use information on the account holder’s wealth, net worth, anticipated transaction activity, and sources of income to detect and deter possible money laundering and terrorist financing. Susan will review documentation and information rejecting any account not meeting the requirements.
 
 
8.  Monitoring Accounts For Suspicious Activity
We will manually monitor a sufficient amount of account activity to permit identification of patterns of unusual size, volume, pattern or type of transactions. We will look at transactions, including trading and wire transfers, in the context of other account activity to determine if a transaction lacks financial sense or is suspicious because it is an unusual strategy for that customer. The AML Compliance Officer or her designee will be responsible for this monitoring, will document when and how it is carried out, and will report suspicious activities to the appropriate authorities. Among the information we will use to determine whether to file a SAR are exception reports that include transaction size, location, type, number, and nature of the activity. We will create employee guidelines with examples of suspicious money laundering activity and lists of high-risk clients whose accounts may warrant further scrutiny. Our AML Compliance Officer will conduct an appropriate investigation before a SAR is filed.
 
a.  Emergency Notification to the Government by Telephone 
 
When conducting due diligence or opening an account, we will immediately call Federal law enforcement when necessary, and especially in these emergencies: a legal or beneficial account holder or person with whom the account holder is engaged in a transaction is listed on or located in a country or region listed on the OFAC list, an account is held by an entity that is owned or controlled by a person or entity listed on the OFAC list, a customer tries to use bribery, coercion, or similar means to open an account or carry out a suspicious activity, we have reason to believe the customer is trying to move illicit cash out of the government’s reach, or we have reason to believe the customer is about to use the funds to further an act of terrorism. We will first call the OFAC Hotline at 1-800-540-6322. The other contact numbers we will use are: Financial Institutions Hotline (1-866-556-3974).
 
 
 
b.  Red Flags
Red flags that signal possible money laundering or terrorist financing include, but are not limited to:
 
  • The customer exhibits unusual concern about the firm's compliance with government reporting requirements and the firm's AML policies, particularly on his or her identity, type of business and assets, or is reluctant or refuses to reveal any information concerning business activities, or furnishes unusual or suspect identification or business documents.
 
  • The customer wishes to engage in transactions that lack business sense or apparent investment strategy, or are inconsistent with the customer's stated business or investment strategy.
 
  • The information provided by the customer that identifies a legitimate source for funds is false, misleading, or substantially incorrect.
 
  • Upon request, the customer refuses to identify or fails to indicate any legitimate source for his or her funds and other assets.
 
  • The customer (or a person publicly associated with the customer) has a questionable background or is the subject of news reports indicating possible criminal, civil, or regulatory violations.
 
  • The customer exhibits a lack of concern regarding risks, commissions, or other transaction costs.
 
  • The customer appears to be acting as an agent for an undisclosed principal, but declines or is reluctant, without legitimate commercial reasons, to provide information or is otherwise evasive regarding that person or entity.
 
  • The customer has difficulty describing the nature of his or her business or lacks general knowledge of his or her industry.
 
  • The customer attempts to make frequent or large deposits of currency, insists on dealing only in cash equivalents, or asks for exemptions from the firm's policies relating to the deposit of cash and cash equivalents.
 
  • The customer engages in transactions involving cash or cash equivalents or other monetary instruments that appear to be structured to avoid the $10,000 government reporting requirements, especially if the cash or monetary instruments are in an amount just below reporting or recording thresholds.
 
  • For no apparent reason, the customer has multiple accounts under a single name or multiple names, with a large number of inter-account or third party transfers.
 
  • The customer is from, or has accounts in, a country identified as a non-cooperative country or territory by the FATF.
 
  • The customer's account has unexplained or sudden extensive wire activity, especially in accounts that had little or no previous activity.
 
  • The customer's account shows numerous currency or cashiers check transactions aggregating to significant sums.
 
  • The customer's account has a large number of wire transfers to unrelated third parties inconsistent with the customer's legitimate business purpose.
 
  • The customer's account has wire transfers that have no apparent business purpose to or from a country identified as money laundering risk or a bank secrecy haven.
 
  • The customer's account indicates large or frequent wire transfers, immediately withdrawn by check or debit card without any apparent business purpose.
 
  • The customer makes a funds deposit followed by an immediate request that the money be wired out or transferred to a third party, or to another firm, without any apparent business purpose.
 
  • The customer makes a funds deposit for the purpose of purchasing a long-term investment followed shortly thereafter by a request to liquidate the position and transfer of the proceeds out of the account.
 
  • The customer engages in excessive journal entries between unrelated accounts without any apparent business purpose.
 
  • The customer requests that a transaction be processed to avoid the firm's normal documentation requirements.
 
  • The customer, for no apparent reason or in conjunction with other red flags, engages in transactions involving certain types of securities, such as penny stocks, Regulation S stocks, and bearer bonds, which although legitimate, have been used in connection with fraudulent schemes and money laundering activity. (Such transactions may warrant further due diligence to ensure the legitimacy of the customer's activity.)
 
  • The customer's account shows an unexplained high level of account activity with very low levels of securities transactions.
 
  • The customer maintains multiple accounts, or maintains accounts in the names of family members or corporate entities, for no apparent purpose.
 
  • The customer's account has inflows of funds or other assets well beyond the known income or resources of the customer.
 
c.  Responding to Red Flags and Suspicious Activity
When a member of the firm detects any red flag he or she will investigate further under the direction of the AML Compliance Officer. This may include gathering additional information internally or from third party sources, contacting the government, freezing the account, and filing a SAR.
 
 
9.  Suspicious Transactions and BSA Reporting 
 
 
a.  Filing a SAR
We will file SARs for any account activity (including deposits and transfers) conducted or attempted through our firm involving $5,000 or more where we know, suspect, or have reason to suspect: 1) the transaction involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity as part of a plan to violate or evade federal law or regulation, 2) the transaction is designed to evade the any requirements of the BSA regulations, 3) the transaction has no business or apparent lawful purpose or is not the sort in which the customer would normally be expected to engage, and we know, after examining the background, possible purpose of the transaction and other facts, of no reasonable explanation for the transaction, or 4) the transaction involves the use of the firm to facilitate criminal activity. 
 
We will not base our decision on whether to file a SAR solely on whether the transaction falls above a set threshold. We will file a SAR and notify law enforcement of all transactions that raise an identifiable suspicion of criminal, terrorist, or corrupt activities. In high-risk situations, we will notify the government immediately and will file a SAR with FinCEN. Securities law violations that are reported to the SEC or an SRO may also be reported promptly to the local U.S. Attorney as appropriate.
 
We will not file SARs to report violations of Federal securities laws or Self Regulatory Organization rules by our employees or registered representatives that do not involve money laundering or terrorism, but we will report them to the SEC or SRO.
 
 
All SARs will be periodically reported to the Board of Directors and senior management, with a clear reminder of the need to maintain the confidentially of the SAR. 
 
 
 
b.  Transaction Reports (CTR)
 
 
Our firm prohibits the receipt of currency and has the following procedures to prevent its receipt: All personnel are instructed to refuse currency and instruct clients to pay by check. If we discover currency has been received, we will file with FinCEN CTRs for transactions involving currency that exceed $10,000. Multiple transactions will be treated as a single transaction if they total more than $10,000 during any one business day. We will use the CTR form at http://www.treas.gov/fincen/f4789-1.pdf.
 
 
c.  Currency and Monetary Instrument Transportation Reports (CMIR)
 
Our firm prohibits the receipt of currency and has the procedures described in the previous subsection to prevent its receipt. If we discover currency has been received, We will file with the Commissioner of Customs a CMIR whenever the firm transports, mails, ships or receives or causes or attempts to transport, mail, ship or receive monetary instruments of more than $10,000 at one time (on one calendar day or, if for the purposed of evading the reporting requirements, on one or more days) in or out of the U.S. We will file a CMIR for all such shipments or receipts of monetary instruments, except for currency or monetary instruments shipped or mailed through the postal service or by common carrier.   We will, however, file a CMIR for such receipts of currency and monetary instruments and for shipments and deliveries made by the firm by means other than the postal service or common carrier, even when such shipment or transport is made by the firm to an office of the firm located outside the U.S. We will use the CMIR Form at http://www.treas.gov/fincen/f4790newfillin.pdf.
 
 
d.  Foreign Bank and Financial Accounts Reports (FBAR)
We will not open or maintain any Foreign Bank accounts.
 
e.  Transfers of $3,000 or More Under the Joint and Travel Rule
When we transfer funds of $3,000 or more, we will record on the transmittal order at least the following information: the name and address of the transmitter and recipient, the amount of the transmittal order, the identity of the recipient’s financial institution, and the account number of the recipient. We will also verify the identity of transmitters and recipients who are not established customers of the firm (i.e., customers of the firm who have not previously maintained an account with us or for whom we have not obtained and maintained a file with the customer's name, address, taxpayer identification number, or, if none, alien identification number or passport number and country of issuance).
 
 
10.  AML Record Keeping
 
a.  SAR Maintenance and Confidentiality
 
We will hold SARs and any supporting documentation confidential. We will not inform anyone outside of a law enforcement or regulatory agency or securities regulator about a SAR. We will deny any subpoena requests for SARs or SAR information and immediately tell FinCEN of any such subpoena we receive. We will segregate SAR filings and copies of supporting documentation from other firm books and records to avoid disclosing SAR filings. Our AML Compliance Officer will handle all subpoenas or other requests for SARs. We will share information with our clearing broker about suspicious transactions for determining when a SAR should be filed. As mentioned earlier, we may share with the clearing broker a copy of the filed SAR – unless it would be inappropriate to do so under the circumstances, such as where we file a SAR concerning the clearing broker or its employees.
 
 
b.  Responsibility for AML Records and SAR Filing
Our AML Compliance Officer and her designee will be responsible to ensure that AML records are maintained properly and that SARs are filed as required.
 
c.  Records Required
As part of our AML program, our firm will create and maintain SARs, CTRs, CMIRs, FBARs, and relevant documentation on customer identity and verification of funds transfers and transmittals as well as any records related to customers listed on the OFAC list. We will maintain SARs and their accompanying documentation for at least five years. Other documents will be kept according to existing BSA and other record keeping requirements, including certain SEC rules that require six-year retention.
 
 
11.  Clearing/Introducing Firm Relationships
 
We will work closely with our clearing firm to detect money laundering. We will exchange information, records, data and exception reports as necessary to comply with AML laws. Both our firm and our clearing firm have filed (and kept undated) the necessary annual certifications for such information sharing, which can be found at www.ustreas.gov/fincen/fi_infoappb.html. As a general matter, we have agreed that our clearing firm will monitor customer activity on our behalf, and we will provide our clearing firm with proper customer identification information as required to successfully monitor customer transactions. We have set out these responsibilities in our clearing agreement under FINRA Rule 3230. We understand that the agreement will not relieve either of us from our independent obligation to comply with AML laws.
 
 
 
12.  Training Programs
 
We will develop ongoing employee training under the leadership of the AML Compliance Officer and senior management. Our training will occur on at least an annual basis. It will be based on our firm’s size, its customer base, and its resources.
 
Our training will include, at a minimum: how to identify red flags and signs of money laundering that arise during the course of the employees’ duties; what to do once the risk is identified; what employees' roles are in the firm's compliance efforts and how to perform them; the firm's record retention policy; and the disciplinary consequences (including civil and criminal penalties) for non-compliance with the PATRIOT Act.
 
We will develop training in our firm, or contract for it. Delivery of the training may include educational pamphlets, videos, intranet systems, in-person lectures, and explanatory memos. We will maintain records to show the persons trained, the dates, and the subject matter of their training.
 
We will review our operations to see if certain employees, such as those in compliance, margin, and corporate security, require specialized additional training. Our written procedures will be updated to reflect any such changes.
 
 
 
13.  Program to Test AML Program
 
a.  Staffing
The Internal Auditor for First State Bancshares will perform the testing of our AML program. Their qualifications include years of experience in bank compliance programs.
 
b.  Evaluation and Reporting
AML testing will be completed at least annually. After we have completed the testing, staff will report its findings to Sue Evans, President. We will address each of the resulting recommendations.
 
We will also report any change and verify current contact information. 
 
 
 
14.  Monitoring Employee Conduct and Accounts
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We will subject employee accounts to the same AML procedures as customer accounts, under the supervision of the AML Compliance Officer. We will also review the AML performance of supervisors, as part of their annual performance review. 
 
 
 
 
15.  Confidential Reporting of AML Non-Compliance
 
 
Employees will report any violations of the firm’s AML compliance program to the AML Compliance Officer, unless the violations implicate the Compliance Officer, in which case the employee shall report to Mr. John Denkler, Executive Vice President First State Bancshares. Such reports will be confidential, and the employee will suffer no retaliation for making them.
 
 
 
16.  Additional Areas of Risk
The firm has reviewed all areas of its business to identify potential money laundering risks that may not be covered in the procedures described above. No other major additional areas of risk were detected.
 
 
17.  Senior Manager Approval 
 
 
I have approved this AML program as reasonably designed to achieve and monitor our firm’s ongoing compliance with the requirements of the BSA and the implementing regulations under it.