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Difficulty: Very hardAnti-Money Laundering (AML), KYC, and Sanctions Compliance

Match each Anti-Money Laundering (AML), Customer Identification Program (CIP), or Sanctions compliance requirement with its corresponding regulatory trigger, monetary threshold, and filing timeline under FINRA rules and federal law.

  • Currency Transaction Report (CTR)Mandated for aggregate physical cash deposits or withdrawals exceeding $10,000 in a single business day; must be filed with FinCEN within 15 calendar days.
  • Suspicious Activity Report (SAR)Mandated for transactions involving $5,000 or more where money laundering or illegal activity is suspected; must be filed with FinCEN within 30 calendar days of initial detection.
  • OFAC Specially Designated Nationals (SDN) List ScreeningMandated cross-referencing of client identity against federal sanction lists; requires immediate blocking/freezing of assets and reporting to Treasury within 10 business days.
  • Customer Identification Program (CIP) VerificationMandated prior to or shortly after account opening; requires collection and verification of four key elements (Name, Date of Birth, Physical Address, and TIN/SSN).

Answer

The correct pairings match each compliance requirement to its regulatory monetary threshold and reporting procedure: Currency Transaction Report (CTR) pairs with physical cash transactions exceeding 10,000filedwithin15calendardays;SuspiciousActivityReport(SAR)pairswithsuspicioustransactionsof10,000 filed within 15 calendar days; Suspicious Activity Report (SAR) pairs with suspicious transactions of 5,000 or more filed within 30 calendar days; OFAC SDN Screening pairs with list matching requiring immediate asset freezing and reporting within 10 business days; Customer Identification Program (CIP) Verification pairs with collecting and verifying four essential identification items (Name, DOB, Address, TIN/SSN).
Each financial regulation targets a specific compliance risk: CTR monitors large cash movements exceeding 10,000witha15−calendar−dayreportingwindow;SARtargetssuspiciousactivitiesinvolving10,000 with a 15-calendar-day reporting window; SAR targets suspicious activities involving 5,000 or more with a 30-calendar-day reporting window; OFAC SDN screening requires immediate asset blocking and reporting within 10 business days; and CIP establishes customer onboarding identity checks.

Step-by-Step Solution

1
Analyze Currency Transaction Report (CTR) requirements under the Bank Secrecy Act.
Identify physical cash deposits or withdrawals exceeding $10,000 in a single business day with a mandatory 15-calendar-day filing timeline.
CTR compliance specifically governs physical currency movement rather than wire transfers or check deposits.
2
Analyze Suspicious Activity Report (SAR) requirements.
Identify suspicious transactions of $5,000 or more requiring confidential filing within 30 calendar days of detection.
SAR regulations focus on potential illegal activity or structuring regardless of whether cash was used.
3
Analyze OFAC SDN screening obligations.
Identify mandatory blocking/freezing of assets and written notice to OFAC within 10 business days upon finding an exact match.
Sanctions compliance prohibits financial transactions with sanctioned foreign actors or designated terrorists.
4
Analyze Customer Identification Program (CIP) baseline requirements.
Identify the required four mandatory data points: Name, Date of Birth, Physical Residential/Business Address, and Taxpayer ID Number.
CIP obligations establish minimum identity verification standards before or shortly after account opening.

Key Concept

Anti-Money Laundering (AML), KYC, and Sanctions Compliance Thresholds and Timelines
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Topics

Anti-Money Laundering (AML), KYC, and Sanctions Compliance