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Question

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

Match each anti-money laundering (AML) and compliance rule under FINRA regulations and the Bank Secrecy Act (BSA) with its correct monetary threshold or required operational action.

  • Currency Transaction Report (CTR)Mandatory filing triggered by physical currency transactions exceeding $10,000 in a single business day.
  • Suspicious Activity Report (SAR)Mandatory confidential filing for suspicious transactions involving at least $5,000 in funds or assets.
  • Customer Identification Program (CIP)Mandatory collection of name, date of birth, physical address, and TIN/SSN prior to account opening.
  • OFAC Specially Designated Nationals (SDN) MatchMandatory obligation to immediately block customer assets and report the freeze within 10 business days.

Answer

Currency Transaction Report (CTR) pairs with physical cash transactions exceeding 10,000inasinglebusinessday;SuspiciousActivityReport(SAR)pairswithsuspicioustransactionsinvolvingatleast10,000 in a single business day; Suspicious Activity Report (SAR) pairs with suspicious transactions involving at least 5,000; Customer Identification Program (CIP) pairs with mandatory collection of four identifying elements (Name, DOB, Address, TIN); OFAC SDN Match pairs with mandatory obligation to immediately block assets and report within 10 business days.
Each regulation correctly corresponds to its specific threshold or operational mandate: CTRs target physical cash over 10,000;SARstargetsuspiciousactivityof10,000; SARs target suspicious activity of 5,000 or more; CIP enforces obtaining the four primary identifying elements prior to opening an account; and OFAC SDN hits require immediate asset freezing and a 10-business-day reporting window.

Step-by-Step Solution

1
Determine the regulatory requirement for currency tracking
Physical currency transactions over $10,000 require a CTR filing.
The Bank Secrecy Act focuses specifically on large cash deposits, withdrawals, or transfers exceeding $10,000 in one business day.
2
Determine the reporting standard for suspicious activity
Suspicious transactions meeting or exceeding $5,000 mandate a SAR filing.
FinCEN regulations set the monetary threshold for reporting suspicious activity by broker-dealers at $5,000.
3
Identify core identity verification requirements for customer onboarding
CIP mandates obtaining four core customer elements: name, date of birth, physical street address, and SSN/TIN.
USA PATRIOT Act rules require financial institutions to verify customer identities to combat money laundering and terrorism financing.
4
Identify mandatory compliance actions for federal economic sanctions matches
OFAC SDN list matches require freezing assets immediately and reporting within 10 business days.
U.S. sanctions law strictly prohibits financial dealings with sanctioned targets and mandates asset blocking.

Key Concept

AML Filing Thresholds and Sanctions Compliance
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Topics

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