BSA Questions
What year was the Bank Secrecy Act enacted?
1970
What does OFAC stand for?
Office of Foreign Assets Control
Deposits just under reporting thresholds followed by wire transfers to multiple third parties are most linked to what laundering stage?
Layering
A new customer refuses to provide required identification but insists on opening an account immediately. What red flag is this?
Lack of transparency / reluctance to provide information.
Cat lover
Angie
Besides FinCEN, which two federal regulators most commonly examine banks for BSA/AML compliance?
OCC and FDIC (also FRB depending on charter)
Name one country subject to comprehensive OFAC sanctions.
Cuba, Iran, North Korea, Syria, Russia (Crimea/Donetsk/Luhansk/Zaporizhzhia/Kherson regions).
A payment includes vague descriptions like “goods” or “services” to a sanctioned country. Why is this suspicious?
Attempt to conceal sanctioned activity.
A business customer claims to operate a cash-intensive business but deposits little or no cash. What red flag is this?
Inconsistent business profile / misrepresentation.
Cake Designer
Laurie
Under the Customer Due Diligence (CDD) Rule, what percentage ownership triggers the beneficial ownership requirement?
25% or more (plus one control prong)
Why are virtual currencies a growing OFAC concern?
They can be used to evade sanctions and enable anonymous cross-border transfers.
A customer requests payment through an intermediary bank in a third country before reaching a sanctioned country. What does this indicate?
Sanctions evasion via layering.
A politically exposed person (PEP) requests to open accounts in the name of family members. Why is this concerning?
Possible concealment of funds or corruption proceeds.
Tattoo artist who can't draw on cookies.
Geoffrey
Who enforces BSA Compliance in the U.S.?
FinCEN (Financial Crimes Enforcement Network)
What is “stripping” in OFAC compliance?
Removing identifying info from payment messages to hide sanctioned party involvement.
A customer frequently uses cashier’s checks purchased with structured cash. What specific concern does this raise?
Monetary instrument purchases being used to obscure cash activity / placement of illicit funds
Which major bank was fined $600M+ in 2019 for OFAC violations?
Standard Chartered Bank.
Accent goals!
Leticia
What are the five elements that a financial institution's AML program must include under BSA?
A: (1) Internal policies, procedures, and controls; (2) Independent testing; (3) Designation of a compliance officer; (4) Ongoing training. (Many regulators add “customer due diligence” as the fifth).
A foreign bank’s transaction references “medical supplies” being shipped to a sanctioned country. What should the U.S. bank do?
Escalate and seek clarification — humanitarian exemptions exist, but only with specific licensing/authorization. Without authorization, transaction must be blocked/rejected.
Rapid fund movements across multiple accounts with no economic purpose match which typology?
“Smurfing” or layering typology
Under the 50 Percent Rule, when is an entity considered blocked?
When Specially Designated Nationals (SDNs) collectively own 50% or more.
-Individuals, groups, and entities that OFAC has identified as being involved in activities such as terrorism, narcotics trafficking, weapons proliferation, human rights abuses, or other threats to U.S.
I eat procedures for breakfast!
Karina