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Question

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

Match each regulatory requirement or reporting mechanism under Anti-Money Laundering (AML), Customer Identification Program (CIP), and Sanctions compliance on the left with its primary threshold or operational rule on the right.

  • Currency Transaction Report (CTR)Mandatory filing for cash transactions exceeding $10,000 conducted in a single business day within 15 calendar days.
  • Suspicious Activity Report (SAR)Mandatory confidential filing for suspicious transactions involving $5,000 or more within 30 calendar days.
  • Customer Identification Program (CIP)Requires member firms to verify name, date of birth, address, and identification number for all new account holders.
  • OFAC Specially Designated Nationals (SDN) ListMandate to immediately block or freeze customer assets and report matches within 10 business days.

Answer

Currency Transaction Report (CTR) matches cash transactions over 10,000within15days;SuspiciousActivityReport(SAR)matchessuspicioustransactionsof10,000 within 15 days; Suspicious Activity Report (SAR) matches suspicious transactions of 5,000 or more within 30 days; Customer Identification Program (CIP) matches identity verification of name, DOB, address, and ID number; OFAC SDN List matches immediate asset freezing and reporting within 10 business days.
Each regulatory reporting requirement aligns with its specific legal threshold: CTR applies to cash over 10,000(15−dayreportingwindow),SARappliestosuspicioustransactionsof10,000 (15-day reporting window), SAR applies to suspicious transactions of 5,000 or more (30-day reporting window), CIP requires collecting four mandatory customer identifying data items, and OFAC sanctions enforcement requires freezing assets of SDN matches with a 10-business-day reporting timeframe.

Step-by-Step Solution

1
Identify the threshold and filing deadline for cash transactions.
Cash transactions exceeding $10,000 in one business day require a CTR filed within 15 calendar days.
Bank Secrecy Act rules mandate CTR reporting for currency transactions exceeding $10,000.
2
Identify the threshold and filing deadline for suspicious activities.
Transactions involving $5,000 or more that lack apparent business purpose or indicate illegal activity require a SAR within 30 calendar days.
FinCEN regulations require SARs for suspicious transactions meeting or exceeding the $5,000 monetary threshold.
3
Identify the basic elements of customer identification.
CIP requires gathering four specific identity verification details for new customers.
The USA PATRIOT Act mandates collecting Name, DOB, Address, and SSN/Tax ID.
4
Identify the obligation when dealing with sanctioned entities.
Matches on the OFAC SDN list require immediate blocking of assets and notification to OFAC within 10 business days.
US sanctions laws prohibit financial dealings with listed SDNs and mandate blocking their accounts.

Key Concept

Anti-Money Laundering (AML), CIP, and OFAC Sanctions Obligations
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Topics

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