BSA/AML Examiner School - Case Study Oct 2023

LCB12/15

Transaction Testing Checklist 13.2: OFAC Review of Transactions and New Accounts

Sample Dates

Transaction Description

Refer to CIP Exhibit

1 2

September, October, November 2015 September, October, November 2015

Refer to Wire Transfer Exhibit

2

1

N NA

For new accounts, was the OFAC filtering performed on the account prior to processing any transactions through the account (other than accepting funds for deposit, etc.)?

NA

Y

For transactions, was the OFAC filtering performed before the transaction was processed?

Comments: An OFAC search is to be performed during the account opening process according to Bank policy. The Bank's request list indicated that an OFAC search was completed through ChexSystems. BSC's review of the ChexSystems "Consumer Information" report identified OFAC searches are not being performed by ChcxSystems. CFO contacted Chex Systems and the company confirmed that OFAC is not being completed. Recommendation — It is recommended that Bank employees who open accounts perform an individual OFAC search at account opening until the Bank has updated it services with ChexSystems. This vendor should be reviewed on an annual basis to ensure that all contracted processes are in accordance with Bank's policies.

8 2