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Question

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

Match each Anti-Money Laundering (AML) or Customer Identification Program (CIP) regulatory compliance requirement on the left with its corresponding operational trigger, retention rule, or legal protection on the right.

  • Currency Transaction Report (CTR) FilingTriggered by physical cash transactions exceeding $10,000 in a single business day and filed with FinCEN within 15 calendar days.
  • Suspicious Activity Report (SAR) FilingTriggered by suspicious transactions of $5,000 or more and filed with FinCEN within 30 calendar days while maintaining strict confidentiality.
  • Customer Identification Program (CIP) Record RetentionRequires broker-dealers to retain customer identity verification records for five years after the customer account is closed.
  • USA PATRIOT Act Section 314(b) Information SharingProvides financial institutions a safe harbor exemption to voluntarily share information regarding suspected money laundering or terrorist activity.

Answer

Currency Transaction Report (CTR) Filing matches physical cash transactions exceeding 10,000within15calendardays.SuspiciousActivityReport(SAR)Filingmatchessuspicioustransactionsof10,000 within 15 calendar days. Suspicious Activity Report (SAR) Filing matches suspicious transactions of 5,000 or more within 30 calendar days under confidentiality. CIP Record Retention matches retaining verification records for five years after account closure. USA PATRIOT Act Section 314(b) matches safe harbor protection for voluntary information sharing between financial institutions.
Each requirement correctly pairs with its governing statutory provision: CTRs govern physical currency over 10,000witha15−dayreportingwindow;SARsgovernsuspicioustrades/transfersof10,000 with a 15-day reporting window; SARs govern suspicious trades/transfers of 5,000 or more with a confidential 30-day reporting window; CIP mandates retaining customer identification records for five years following account termination; and Section 314(b) provides a legal safe harbor for voluntary information sharing between broker-dealers.

Step-by-Step Solution

1
Identify the currency threshold and deadline for CTR compliance.
CTR compliance applies to physical cash transactions exceeding $10,000 in a single day and requires filing within 15 calendar days.
The Bank Secrecy Act establishes a strict $10,000 cash threshold and a 15-day filing window for FinCEN Form 112.
2
Identify the monetary threshold, filing deadline, and confidentiality mandate for SAR compliance.
SAR filing applies to suspicious transactions involving $5,000 or more, with a 30-calendar-day filing timeline and strict prohibition on notifying the suspect.
FINRA and FinCEN regulations establish the $5,000 suspicious activity threshold for broker-dealers.
3
Determine the recordkeeping duration for Customer Identification Program (CIP) documentation.
CIP records must be maintained for 5 years after account termination.
Federal anti-money laundering rules require retention of customer identity verification details for 5 years post-account closure.
4
Evaluate the statutory purpose of USA PATRIOT Act Section 314(b).
Section 314(b) offers safe harbor protection for voluntary inter-firm communication regarding AML and counter-terrorist financing.
Section 314(a) mandates regulatory queries, whereas Section 314(b) grants financial institutions permission to share suspicious information voluntarily.

Key Concept

Anti-Money Laundering (AML), Customer Identification Program (CIP), and Bank Secrecy Act (BSA) Regulatory Compliance Standards
Estimated Time:1m 30s
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Topics

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