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Question

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

Match each anti-money laundering (AML), customer identification, or Office of Foreign Assets Control (OFAC) regulatory mandate with its exact statutory reporting trigger, target entity, and deadline under federal securities regulations.

  • FinCEN Currency Transaction Report (CTR / Form 112)Mandatory filing with FinCEN within 15 calendar days for aggregate physical cash transactions exceeding $10,000 conducted by or for a customer in a single business day.
  • FinCEN Suspicious Activity Report (SAR / Form SAR-SF)Mandatory filing with FinCEN within 30 calendar days of initial detection for transactions involving $5,000 or more that lack an apparent business purpose or indicate illegal activity.
  • OFAC Report of Blocked PropertyMandatory filing submitted directly to the U.S. Department of the Treasury within 10 business days after identifying and freezing assets associated with a Specially Designated National (SDN).
  • Customer Identification Program (CIP) Baseline Verification RecordStatutory requirement to retain identifying customer information (name, date of birth, physical address, and TIN) for a minimum of 5 years following account closure.

Answer

FinCEN Currency Transaction Report matches with mandatory filing within 15 calendar days for cash transactions exceeding 10,000;FinCENSuspiciousActivityReportmatcheswithmandatoryfilingwithin30calendardaysofdetectionforsuspicioustransactionsof10,000; FinCEN Suspicious Activity Report matches with mandatory filing within 30 calendar days of detection for suspicious transactions of 5,000 or more; OFAC Report of Blocked Property matches with reporting to the U.S. Treasury within 10 business days after freezing SDN assets; CIP Baseline Verification Record matches with retaining identifying records for 5 years post-account closure.
Each regulatory requirement pairs with distinct statutory conditions: Currency Transaction Reports target physical cash over 10,000filedwithin15calendardays;SuspiciousActivityReportsaddresssuspiciousfunds/assetsof10,000 filed within 15 calendar days; Suspicious Activity Reports address suspicious funds/assets of 5,000 or more filed within 30 calendar days of discovery; OFAC SDN blocked property reports are due within 10 business days of asset freezing; and CIP identifying information must be retained for 5 years after account closure.

Step-by-Step Solution

1
Differentiate cash transaction thresholds from suspicious transaction thresholds
Recognize that CTRs apply to physical currency exceeding 10,000regardlessofsuspicion,whereasSARsapplytosuspiciousactivitiesreachingorexceeding10,000 regardless of suspicion, whereas SARs apply to suspicious activities reaching or exceeding 5,000.
Prevents confusing cash reporting limits with SAR thresholds.
2
Analyze filing deadlines and receiving regulatory bodies
Identify that CTRs have a 15-calendar-day FinCEN deadline, SARs have a 30-calendar-day FinCEN deadline from detection, and OFAC SDN blocked property reports have a 10-business-day deadline to OFAC (U.S. Treasury).
Distinguishes between FinCEN AML reporting schedules and Treasury sanctions reporting requirements.
3
Evaluate recordkeeping retention triggers for customer identification
Determine that CIP baseline customer identifying info (name, DOB, address, TIN) must be retained for 5 years AFTER account closure.
Differentiates post-account closure retention rules from general 3-year or 6-year broker-dealer record retention rules.

Key Concept

AML, CIP, and OFAC Compliance Filing Triggers, Monetary Thresholds, and Retention Periods
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Topics

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