BSA

Question 1

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

Answer 1

identify and block restricted transactions

Question 2

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

Answer 2

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

Question 3

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:

Answer 3

* should not be allowed to originate the transaction AND

* circumstances under which accounts should be closed

Question 4

Banks are required to have written BSA programs that are:

Answer 4

* approved by the board of directors

* based on the institutions periodically updated risk assessment

Question 5

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

Answer 5

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

Question 6

T or F

BSA requires staff training.

Answer 6

TRUE

Question 7

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

Answer 7

* 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

Question 8

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

Answer 8

* development of internal policies, procedures, and controls

* designation of a compliance officer

* ongoing employee training program

* independent audit function to test programs

Question 9

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

Answer 9

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

Question 10

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:

Answer 10

more than $10,000 in currency

Question 11

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

Answer 11

* ID verification

* physical address

* specific occupation of the conductor

Question 12

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

Answer 12

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

Question 13

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

Answer 13

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

Question 14

CTRs are filed with what agency?

Answer 14

IRS

Question 15

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

Answer 15

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

Question 16

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

Answer 16

* 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

Question 17

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

Answer 17

at least once each year

Question 18

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

Answer 18

all are listed on the designation

Question 19

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

Answer 19

of entry into the US

Question 20

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

Answer 20

15 days after receipt of the instruments

Question 21

CMIRs are filed with what agency?

Answer 21

the appropriate Bureau o Customs and Border Protection

Question 22

Duty to file a CMIR is only on:

Answer 22

the person sending the currency or monetary instruments

Question 23

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

Answer 23

$3000 to $10,000 in currency

Question 24

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.

Answer 24

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

Question 25

Monetary instrument purchase logs must be kept for:

Answer 25

five years

Question 26

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

Answer 26

originating

Question 27

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

Answer 27

the original or a copy of the payment order

Question 28

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

Answer 28

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

Question 29

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

Answer 29

used to indirectly provide banking services to foreign shell banks

Question 30

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

Answer 30

to accept service of legal process

Question 31

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

Answer 31

every three years

Question 32

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:

Answer 32

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

Question 33

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:

Answer 33

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

Question 34

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:

Answer 34

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

Question 35

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

Answer 35

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

Question 36

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

Answer 36

to detect and report money laundering and suspicious activity

Question 37

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

Answer 37

\* 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

Question 38

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

Answer 38

the purpose and expected use of the account

Question 39

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

Answer 39

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

Question 40

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, :

Answer 40

terrorist activity or money laundering

Question 41

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

Answer 41

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

Question 42

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:

Answer 42

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

Question 43

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

Answer 43

\* 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

Question 44

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

Answer 44

a reasonable period of time after the account is opened

Question 45

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

Answer 45

five years after the date the account is closed

Question 46

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

Answer 46

five years after the record is made

Question 47

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:

Answer 47

the customer will be able to view before opening an account

Question 48

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

Answer 48

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

Question 49

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

Answer 49

has a substantial basis for identifying a suspect

Question 50

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

Answer 50

has no substantial basis for identifying a suspect

Question 51

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

Answer 51

involve potential money laundering or violation of the BSA

Question 52

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

Answer 52

30 calendar days

Question 53

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

Answer 53

needed to identify a suspect

Question 54

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

Answer 54

every 90 days

Question 55

SARs and supporting documentation must be maintained for:

Answer 55

five years from the filing date

Question 56

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

Answer 56

to civil money penalties

Question 57

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

Answer 57

\* identification or alert of unusual activity \* management of alerts \* SAR decision making \* SAR completion and filing \* monitoring and SAR filing on continuing activity

Question 58

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

Answer 58

\* their products and services \* their locations and markets served \* the purpose of the account and anticipated activity

Question 59

Money services businesses must register with:

Answer 59

FinCEN and, if required, their state licensing boards

Question 60

Generally, BSA record retention requirements are for:

Answer 60

5 years

Question 61

What are the BSA civil money penalties?

Answer 61

\* 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

Question 62

What ae the criminal penalties for BSA violations?

Answer 62

\* $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

Question 63

What are the 4 pillars of BSA?

Answer 63

\* policies and procedures for compliance, reporting, and recordkeeping \* training of appropriate personnel \* system of internal controls \* person responsible for compliance

Question 64

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

Answer 64

FALSE debits are prohibited, credits are not

Question 65

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

Answer 65

10 business days of the occurrence

Question 66

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

Answer 66

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

Question 67

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

Answer 67

September 30 of that same year

Question 68

All blocked accounts must be placed in:

Answer 68

interest bearing accounts earning interest at a commercially reasonable rate

Question 69

T or F Blocked accounts have no right of set off.

Answer 69

TRUE

Question 70

T or F Banks may debit normal service charges from blocked accounts.

Answer 70

TRUE

Question 71

Bank must keep a record of each rejected transaction for:

Answer 71

at least five years after the date of the transaction

Question 72

Banks must keep records for blocked property:

Answer 72

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

Question 73

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

Answer 73

assist or obtaining or retaining business