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Question

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

Match each Anti-Money Laundering (AML), Customer Identification Program (CIP), or Sanctions compliance requirement on the left with its corresponding monetary threshold, regulatory action, or filing timeline on the right.

  • Currency Transaction Report (CTR)Mandatory filing with FinCEN within 15 calendar days for physical cash transactions exceeding $10,000 in a single business day.
  • Suspicious Activity Report (SAR)Mandatory filing with FinCEN within 30 calendar days for suspicious transactions involving $5,000 or more.
  • Customer Identification Program (CIP) RecordkeepingVerifying customer identity prior to or within a reasonable time after account opening, with records retained for 5 years after account closure.
  • OFAC Specially Designated Nationals (SDN) List MatchImmediate blocking or freezing of customer assets and reporting to the U.S. Treasury within 10 business days.

Answer

Currency Transaction Report (CTR) pairs with filing within 15 calendar days for currency deposits over 10,000;SuspiciousActivityReport(SAR)pairswithfilingwithin30calendardaysforsuspicioustransactionsof10,000; Suspicious Activity Report (SAR) pairs with filing within 30 calendar days for suspicious transactions of 5,000 or more; Customer Identification Program (CIP) Recordkeeping pairs with retaining customer verification records for 5 years after account closure; OFAC SDN Match pairs with immediate asset freezing and reporting to Treasury within 10 business days.
Currency Transaction Reports apply to physical cash transactions exceeding 10,000inasingledayandmustbesubmittedwithin15calendardays.SuspiciousActivityReportstargetsuspicioustransactionsinvolving10,000 in a single day and must be submitted within 15 calendar days. Suspicious Activity Reports target suspicious transactions involving 5,000 or more and require filing within 30 calendar days. CIP regulations mandate identity verification and retaining records for 5 years after account closure. OFAC SDN list matches require immediately freezing funds and filing a report within 10 business days.

Step-by-Step Solution

1
Evaluate Currency Transaction Report (CTR) regulatory parameters.
CTRs apply specifically to physical currency (cash) transactions exceeding $10,000 on a single business day, requiring a report filed to FinCEN within 15 calendar days.
Bank Secrecy Act rules mandate CTR reporting to track large physical currency movements into financial institutions.
2
Evaluate Suspicious Activity Report (SAR) regulatory parameters.
SARs apply to suspicious transactions conducted or attempted involving $5,000 or more, requiring a confidential filing with FinCEN within 30 calendar days.
FinCEN requires registered entities to report illicit behavior while maintaining strict non-disclosure obligations toward the customer.
3
Determine mandatory recordkeeping timelines for CIP identification records.
Customer identification verification records must be maintained by the firm for 5 years after the date the account is officially closed.
USA PATRIOT Act Section 326 specifies 5-year post-account-closure retention for customer identity documents.
4
Identify exact compliance protocol when matching an entity against OFAC SDN lists.
The firm must freeze assets immediately and submit an official report to the Office of Foreign Assets Control within 10 business days.
OFAC sanctions prohibit financial transactions with blocked entities and mandate freezing assets under U.S. jurisdiction.

Key Concept

AML Filing Thresholds, CIP Retention, and OFAC Sanctions Compliance
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Topics

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