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Flashcards in BSA Deck (73):

Reg GG requires that all non-exempt participants in a payment system to establish policies and procedures designed to:

identify and block restricted transactions


When is an institution considered to have actual knowledge of a transaction or a commercial customer engaged in unlawful gambling when:

a particular fact is known or is brought to the attention of either an officer of the institution or an individual in the organizations compliance function


Satisfactory due diligence procedures include processes to be followed if there is actual knowledge that a commercial customer has originated or received restricted transactions and circumstances under which the customer:

* should not be allowed to originate the transaction AND

* circumstances under which accounts should be closed


Banks are required to have written BSA programs that are:

* approved by the board of directors

* based on the institutions periodically updated risk assessment


Required independent BSA compliance testing should evaluate the overall adequacy and effectiveness of the BSA/AML program and contain enough information to:

draw a conclusion about the institutions program and update the risk assessment as applicable


T or F

BSA requires staff training.



BSA requires a designated individual be responsible for compliance. This person must:

* be appointed by the board of directors

* possess sufficient authority, responsibility and resources commensurate with the banks risk profile

* be fully knowledgeable regarding BSA and all related regulations

* have reporting lines that allow regular reporting to the board of director and senior management of the ongoing BSA compliance program


Every bank should establish an AML program that includes at a minimum:

* development of internal policies, procedures, and controls

* designation of a compliance officer

* ongoing employee training program

* independent audit function to test programs


Operators of credit card systems must develop and implement a written AML program reasonably designed to:

prevent the operator from being used to facilitate money laundering and the financing of terrorist activities.


FinCEN Form 104, the CTR, must be filed on each deposit, withdrawal, currency exchange, or other payment or transfer by, through, or to an institution involving:

more than $10,000 in currency


Information on all persons or entities involved in the CTR must be complete, including:

* ID verification

* physical address

* specific occupation of the conductor


For CTR calculations, deposits made at night, over the weekend, or on a holiday are considered:

transactions of the next business day following the day of the deposit


CTRs must be filed within _________ following the day that the reportable transaction occurred

15 calendar days (25 says for magnetic media or electronic filing)


CTRs are filed with what agency?



Banks must designate exempt persons by filing a FinCEN form 110 within:

30 days of the first reportable transaction with the person seeking to be expect


Besides state and government agencies, and entities listed on the stock exchange, who else is eligible to be exempt from CTR filing?

* US commercial enterprises that have accounts for more than 2 months and engage in 5 or more cash transactions over $10,000 in a 12 month period and not engaged in prohibited activities

* US payroll customers of more than 2 months and using the funds for payroll

* other accounts if after performing a risk assessment the entity has a legitimate business reason for the cash transactions


Exempt CTR customers that are not nonlisted business or payroll customer must have their exemptions reviewed:

at least once each year


A parent bank holding company may make an exempt designation for all its bank subsidiaries provided:

all are listed on the designation


Each person sending or receiving monetary instruments must complete a CMIR at the time:

of entry into the US


Persons receiving monetary instruments from outside the US must fil a CMIR within:

15 days after receipt of the instruments


CMIRs are filed with what agency?

the appropriate Bureau o Customs and Border Protection


Duty to file a CMIR is only on:

the person sending the currency or monetary instruments


Banks are required to maintain a log of specific information on purchases of monetary instruments for:

$3000 to $10,000 in currency


When purchasing monetary instruments, as a special rule for elderly or disabled persons, banks may accept what forms of ID if the person does not possess the normally acceptable forms of identification.

social security cards or Medicare/Medicaid cards along with another form of ID


Monetary instrument purchase logs must be kept for:

five years


A, _____ bank that sends certain funds transfers in the amount of $3000 or more must keep specific information.



A bank that receives a BSA covered payment order in a funds transfer, but that is not the beneficiary bank, must retain either:

the original or a copy of the payment order


For BSA covered funds transfers, beneficiary banks must retain records that are retrievable by:

the beneficiary's name and if the beneficiary is an established customer, by account number


Covered institutions must take reasonable steps to ensure that correspondent accounts provided to foreign banks are not:

used to indirectly provide banking services to foreign shell banks


Covered institutions must maintain records of the foreign banks owners and agents in the US designated:

to accept service of legal process


Covered institutions may meet their foreign correspondent compliance responsibilities by requesting a certification or recertification from the foreign bank at least once:

every three years


If the covered institution seeks to verify information form a foreign bank but has not received information within 90 calendar days after the date of undertaking the verification, the institution must:

close the correspondent account of the foreign bank and not permit transaction in such account other than to close it


A covered institution must keep the original of any document provided by a foreign bank and copies of all document relied upon by the institution for:

five years after the date the institution no longer maintains a correspondent account for the foreign bank


Failure of a covered institution to terminate an foreign correspondent account relationship in accordance with the regulation can subject the institution to civil penalties of:

up to $10,000 per day until the account is terminated


The financial institutions due diligence program should detail the special procedures undertaken when due diligence cannot be performed, including:

when an account should be refuse or suspended and when a SAR should be filed


A covered institution must implement a due diligence program for private bank accounts that is reasonably designed:

to detect and report money laundering and suspicious activity


BSA defines a private bank account is one that meets the following requirements:

* minimum aggregation of funds of at least $1 million

* established on behalf of or for the benefit of one or more non US persons who have directed or beneficial ownership


Institutions must ascertain the source of funds deposited into a private bank account and:

the purpose and expected use of the account


If the owner of the private banking account is a senior foreign official, the due diligence must include:

enhanced scrutiny of the account that is reasonably designed to detect and report transactions that may involve the proceeds of foreign corruption


A federal law enforcement agency may request FinCEN to solicit information from a financial institution but it must certify in writing that it is seeking information on an individual or entity engaged in, or based on credible evidence reasonably suspected to be engaged in, :

terrorist activity or money laundering


On request of FinCEN, a financial institution must expeditiously search its records to determine whether it:

maintains or has maintained any account for, or has engaged in any transaction with, each individual, entity, or organization named in the request


While financial institutions may share information with other institutions if it believes the account holder is engaged in terrorism or money laundering, before sharing information, the sharing institution must:

take reasonable steps to verify that the other institution with which it intends to share financial information has submitted the required notice to FinCEN


A financial institution must follow risk based procedures for verifying the identity of each customer that must:

* enable the bank to form a reasonable belief that it knows the identity of each customer

* be based on the banks perception of the relevant risks


CIP must contain processes for verifying the identity of customer within:

a reasonable period of time after the account is opened


All records obtained to identify the customer before opening an account must be retained for:

five years after the date the account is closed


Records used to verify the customer's identity must be retained for:

five years after the record is made


CIP must have adequate procedures for providing customers with a notice that the information is being used to verify their identities and placed in a manner that:

the customer will be able to view before opening an account


A SAR must be filed when the bank suspects an identified insider of:

committing or aiding in committing a crime, regardless of dollar amount


A SAR must be filed when a bank detects a known or suspected crime involving $5,000 or more and:

has a substantial basis for identifying a suspect


A SAR must be filed when a bank detects a known or suspected crime involving $25,000 or more and:

has no substantial basis for identifying a suspect


A SAR must be filed when the bank suspects transactions aggregating $5,000 or more that:

involve potential money laundering or violation of the BSA


SARs must be filed within _______ after initial detection of facts that may constitute a basis for filing

30 calendar days


SAR filing may be delayed an additional 30 calendar days if:

needed to identify a suspect


If suspicious activity continues after filing the SAR, the bank should file additional SARs at least:

every 90 days


SARs and supporting documentation must be maintained for:

five years from the filing date


Willful failure to file or careless disregard for filing SARs in a timely manner can subject the bank:

to civil money penalties


Effective suspicious activity monitoring and reporting systems include what key components:

* identification or alert of unusual activity

* management of alerts

* SAR decision making

* SAR completion and filing

* monitoring and SAR filing on continuing activity


What should banks consider when evaluating the risks of nonbank financial institutions?

* their products and services

* their locations and markets served

* the purpose of the account and anticipated activity


Money services businesses must register with:

FinCEN and, if required, their state licensing boards


Generally, BSA record retention requirements are for:

5 years


What are the BSA civil money penalties?

* Fines up to the greater of $25,000 or other amount of the transaction (up to a $100,000 max)

* $500 per violation for negligence


What ae the criminal penalties for BSA violations?

* $250,000 and/or five years imprisonment for will violations

* up to $500,000 fine and/or ten years imprisonment for pattern or in conjunction with the violation of another law


What are the 4 pillars of BSA?

* policies and procedures for compliance, reporting, and recordkeeping

* training of appropriate personnel

* system of internal controls

* person responsible for compliance


T or F

When an account is blocked by OFAC, both debits and credits are prohibited.


debits are prohibited, credits are not


All reports on blocked accounts or rejected transactions must be sent to OFAC within:

10 business days of the occurrence


When OFAC sends a letter requesting information on how a prohibited transaction was processed, the bank has:

30 days to reply and request no penalty or a reduction in penalty


An annual report on blocked accounts as of June 30 of each year must be filed by:

September 30 of that same year


All blocked accounts must be placed in:

interest bearing accounts earning interest at a commercially reasonable rate


T or F

Blocked accounts have no right of set off.



T or F

Banks may debit normal service charges from blocked accounts.



Bank must keep a record of each rejected transaction for:

at least five years after the date of the transaction


Banks must keep records for blocked property:

the entire time the property is blocked and for five years after the block is released


The FCPA makes it unlawful to make payments to foreign government officials to:

assist or obtaining or retaining business