A compliance department at a FINRA member broker-dealer is conducting a post-account-opening audit of a corporate account established by a foreign business entity. During the initial month of activity, the client deposited $14,000 in physical cash at a local branch office. Later that week, the client attempted to initiate an outbound wire transfer to an entity designated on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list. Which of the following obligations correctly state the regulatory and compliance actions the firm must execute? (Select ALL that apply.)
- The firm must file a Currency Transaction Report (CTR) with FinCEN within 15 calendar days of the $14,000 cash deposit.Answer
- The firm must immediately block (freeze) the attempted wire transfer to the SDN-listed entity and report the blocked transaction to OFAC within 10 business days.Answer
- CThe firm is required to file a Suspicious Activity Report (SAR) regarding the attempted SDN wire transfer within 15 calendar days of initial discovery.
- DThe mandatory filing of a Currency Transaction Report (CTR) relieves the firm of any obligation to file a Suspicious Activity Report (SAR) for the cash transaction.
Answer
The firm is required to file a Currency Transaction Report (CTR) with FinCEN within 15 calendar days of receiving the cash deposit exceeding $10,000, and it must immediately block the wire transfer to the SDN-listed entity while submitting a report to OFAC within 10 business days.
Currency transactions exceeding $10,000 in physical cash require a CTR filing within 15 calendar days. Simultaneously, transactions involving OFAC SDN-listed targets require immediate blocking of funds and notification to OFAC within 10 business days.
Step-by-Step Solution
Key Concept
Anti-Money Laundering (AML), KYC, and Sanctions Compliance