BSA-AML Examiner School Case Study eBook

Internal Use Only

BSA/AML Policy and Program

For TS&J Sourced Customers , TS&J is responsible for conducting all KYC processes in accordance with the standards set forth by its BSA/AML/OFAC program. For Fintech Partner-Sourced Customers , KYC will generally fall under one of the following two scenarios: 1. The Fintech Partner will provide customer information to TS&J and TS&J will then conduct its KYC processes in accordance with the standards set forth by TS&J’s BSA/AML/OFAC program; or 2. TS&J will conduct due diligence on, and ongoing monitoring of, the Fintech Partner’s KYC processes and ensure that they meet the standards set forth in TS&J BSA/AML/OFAC program. 2. OFAC COMPLIANCE The BSA/AML Officer will establish controls to ensure that the Bank complies with the OFAC regulations to enforce economic and trade sanctions based on U.S. foreign policy and national security goals. OFAC sanctions prohibit U.S. companies from doing business with targeted individuals, entities, and countries 7 subject to sanctions without a requisite OFAC license. The OFAC controls will apply to all parties with which the Bank does business including, but not limited to, customers, counterparties, originators, beneficiaries, suppliers, third parties, and Bank employees. The BSA/AML Officer will establish systems and procedures to ensure that the Bank: ● Fully incorporates OFAC risk within its BSA/AML/OFAC risk assessment; ● Performs an initial screening of new accounts at onboarding to prevent any breaches of U.S. sanctions law; ● Performs ongoing monitoring of existing accounts, transactions, 8 contracts and other activity in a sufficiently timely fashion to be able to act to prevent any breaches of U.S. sanctions law; ● Updates OFAC lists in a timely fashion when OFAC announces changes to sanctions programs and/or the Specially Designated Nationals and Blocked Persons (“SDN”) List; ● Establishes processes and procedures for review of potential OFAC matches, which define the authority of reviewers of each level to close alerts and allows for escalation to the BSA/AML Officer of potential matches that are potentially true matches;

7 Examples of broadly sanctioned jurisdictions include North Korea, Syria, Cuba, and Iran. 8 Consistent with OFAC guidance, the Bank does not review batched domestic ACH transactions.

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Confidential