BSA-AML Examiner School Case Study eBook

Internal Use Only

BSA/AML Policy and Program

● Ensures that screening criteria are appropriate for the risk levels identified in the BSA/AML/OFAC risk assessment; ● Blocks or rejects transactions as appropriate under U.S. sanctions law. Blocked transactions will include those that are: ○ By or on behalf of a blocked individual or entity; ○ To or go through a blocked entity; or ○ In connection with a transaction in which a blocked individual or entity has an interest; and ● Reports blocked and rejected items to OFAC within 10 business days. In relation to all blocked funds, TS&J will: ● Hold the funds in a segregated, blocked account; ● Ensure the funds accrue interest at a commercially reasonable rate; ● Hold the funds until the sanctions target is delisted, the sanctions program is delisted, or the customer obtains an OFAC license authorizing the release of the property; ● Maintain records related to the blocked funds the period in which the funds are blocked and at least five years thereafter; and ● Submit annual reports to OFAC on the total of blocked funds by September 30 of each year, based on information as of June 30. In addition, during its course of business, the Bank will perform the following processes to ensure compliance with OFAC regulations: ● All new customers, beneficial owners and key officers of vendors, suppliers, Fintech Partners, and TS&J staff are screened against the SDN List; and ● All existing customers, vendors, Fintech Partners, and TS&J staff are screened against the SDN List on a regular basis, but no less than monthly. The Bank sets out its OFAC processes in more detail in its OFAC procedures. 3. TRANSACTION MONITORING AND INVESTIGATIONS Transaction Monitoring At the BSA/AML Officer’s discretion, the Bank will use a combination of automated and manual systems to monitor customer activity, detect unusual or suspicious transactions, and generate alerts. In addition, the BSA/AML Officer will set up processes for Bank employees to escalate potentially suspicious activity and red flags observed during the course of their duties and ensure that Bank

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Confidential