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Question

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

Match each anti-money laundering (AML) or sanctions compliance rule with its primary regulatory requirement or reporting trigger.

  • Currency Transaction Report (CTR)Filing required for currency transactions exceeding $10,000 in a single business day within 15 calendar days.
  • Suspicious Activity Report (SAR)Filing required for suspicious transactions of $5,000 or more within 30 calendar days.
  • Customer Identification Program (CIP)Mandate to verify customer identity details (name, address, DOB, Tax ID) at account opening.
  • Office of Foreign Assets Control (OFAC)Enforces economic sanctions by maintaining the Specially Designated Nationals (SDN) list.

Answer

Currency Transaction Report (CTR) matches filing required for currency transactions exceeding 10,000inasinglebusinessdaywithin15calendardays;SuspiciousActivityReport(SAR)matchesfilingrequiredforsuspicioustransactionsof10,000 in a single business day within 15 calendar days; Suspicious Activity Report (SAR) matches filing required for suspicious transactions of 5,000 or more within 30 calendar days; Customer Identification Program (CIP) matches mandate to verify customer identity details (name, address, DOB, Tax ID) at account opening; Office of Foreign Assets Control (OFAC) matches enforces economic sanctions by maintaining the Specially Designated Nationals (SDN) list.
Each regulation/framework corresponds directly to its defined threshold or mandate: CTR targets currency deposits/withdrawals over 10,000(15days),SARtargetssuspicioustransactionsof10,000 (15 days), SAR targets suspicious transactions of 5,000 or more (30 days), CIP mandates collecting and verifying baseline customer identity data, and OFAC administers trade sanctions and SDN screening.

Step-by-Step Solution

1
Identify the threshold and timeline for physical cash transaction reporting.
Cash transactions exceeding $10,000 in one business day trigger a CTR filing within 15 calendar days.
FinCEN regulations mandate CTRs to track large physical currency flows.
2
Identify the threshold and timeline for red flag suspicious behavior reporting.
Transactions involving $5,000 or more that appear illegal or unusual trigger a SAR filing within 30 calendar days.
SAR filings inform regulators of potential money laundering or financial crimes without alerting the customer.
3
Identify the baseline requirement for customer onboarding verification.
CIP mandates obtaining name, date of birth, physical address, and taxpayer identification number before or promptly after account opening.
CIP ensures broker-dealers form a reasonable belief regarding the true identity of each customer.
4
Identify the agency responsible for federal sanctions and blocked persons lists.
OFAC publishes the SDN list to block targeted foreign countries, terrorists, and sanctioned entities from accessing the U.S. financial system.
Broker-dealers must screen existing accounts and new applicants against OFAC lists to satisfy federal sanctions regulations.

Key Concept

Core Anti-Money Laundering (AML), Customer Identification Program (CIP), and OFAC Compliance Frameworks
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Topics

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