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Question

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

Match each Anti-Money Laundering (AML) or sanctions compliance regulation on the left with its correct operational trigger or mandate on the right.

  • FinCEN Section 314(a) Information RequestRequires broker-dealers to query existing account records for individuals or entities listed in law enforcement inquiries.
  • Customer Due Diligence (CDD) Legal Entity RuleMandates identifying and verifying natural persons owning 25% or more equity interest in legal entity accounts.
  • OFAC Specially Designated Nationals (SDN) MatchRequires immediate freezing of assets and filing a report with the U.S. Treasury within 10 business days.
  • Currency Transaction Report (CTR) MandateRequires filing FinCEN Form 112 within 15 calendar days for physical cash deposits exceeding $10,000 in a single day.

Answer

FinCEN Section 314(a) Request matches searching account records for law enforcement targets; CDD Legal Entity Rule matches verifying individuals with 25% or more equity ownership; OFAC SDN Match matches immediately freezing assets and reporting within 10 business days; CTR Mandate matches filing Form 112 within 15 calendar days for cash exceeding $10,000.
Each Anti-Money Laundering and sanctions regulation matches its specific statutory mandate: 314(a) covers law enforcement record queries, CDD targets 25% beneficial owners, OFAC SDN mandates asset freezing within 10 business days, and CTR requires reporting physical cash transactions over $10,000 within 15 calendar days.

Step-by-Step Solution

1
Analyze FinCEN 314(a) protocol
Match 314(a) requests with mandatory database searches for subjects of criminal investigations.
Section 314(a) establishes a formal mechanism for law enforcement to communicate with financial institutions regarding suspected money laundering or terrorism.
2
Evaluate the CDD Rule for corporate/entity accounts
Associate the CDD rule with identifying natural persons owning at least 25% equity interest.
The CDD framework mandates opening the ownership structure of legal entities to identify ultimate beneficial owners.
3
Review OFAC blocking and reporting procedures
Link a positive SDN match to immediate asset freezing and 10-business-day Treasury reporting.
U.S. sanctions laws strictly prohibit dealing with SDN-listed persons and require financial assets to be blocked immediately.
4
Distinguish CTR parameters from other AML requirements
Connect CTR to cash transactions over $10,000 and the 15-calendar-day reporting window.
The Bank Secrecy Act targets large cash movements by requiring Form 112 filings within 15 calendar days.

Key Concept

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

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