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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 tool with its corresponding regulatory requirement or threshold.

  • Currency Transaction Report (CTR)Mandatory filing with FinCEN within 15 calendar days for currency deposits or withdrawals exceeding $10,000 in a single day
  • Suspicious Activity Report (SAR)Confidential filing submitted within 30 calendar days for suspicious transactions involving $5,000 or more
  • Customer Identification Program (CIP)Mandatory collection and verification of customer name, date of birth, residential address, and taxpayer identification number
  • OFAC Specially Designated Nationals (SDN) ListRegulatory list requiring member firms to block transactions and freeze assets of targeted countries, terrorists, and narcotics traffickers

Answer

Currency Transaction Reports match cash transactions exceeding 10,000within15calendardays;SuspiciousActivityReportsmatchconfidentialfilingsforsuspicioustransactionsof10,000 within 15 calendar days; Suspicious Activity Reports match confidential filings for suspicious transactions of 5,000 or more within 30 calendar days; Customer Identification Program matches mandatory verification of core identifying details (name, DOB, address, tax ID); and the OFAC SDN List matches blocking transactions and freezing assets of designated targets.
Each regulatory requirement maps to a specific AML or compliance mandate: CTRs track cash transactions over 10,000within15calendardays;SARsrequireconfidentialreportingofsuspiciousactivityof10,000 within 15 calendar days; SARs require confidential reporting of suspicious activity of 5,000 or more within 30 calendar days; CIP requires verifying name, date of birth, address, and tax ID; and OFAC enforcement requires blocking transactions and freezing assets for individuals or entities on the SDN list.

Step-by-Step Solution

1
Analyze cash-specific reporting rules under the Bank Secrecy Act.
Currency Transaction Reports (CTRs) handle cash/currency transactions over $10,000 and must be filed within 15 calendar days.
BSA regulations focus specifically on physical currency movements to prevent cash layering and money laundering.
2
Analyze suspicious transaction reporting rules and thresholds.
Suspicious Activity Reports (SARs) apply to suspicious activity involving $5,000 or more, filed confidentially within 30 calendar days.
SAR regulations require a lower monetary threshold ($5,000) than CTRs and encompass any form of asset transfer that lacks apparent business purpose.
3
Differentiate identity verification obligations from economic sanctions enforcement.
CIP mandates obtaining and verifying the four basic identity elements for new customers, whereas OFAC screening requires blocking transactions and freezing assets for matches on the SDN list.
CIP prevents identity fraud at account opening, while OFAC enforces federal national security sanctions.

Key Concept

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

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