BSA/AML Examiner School - Case Study Oct 2023

Funds Transfers A limited number of funds transfer for customers,

A moderate number of funds transfer. A few international funds transfer from personal or business accounts with typically low-risk countries.

A large number of noncustomer funds transactions and payable upon proper identification (PUPID) activity. Frequent funds transfers from personal or business account to or from high-risk jurisdictions and financial secrecy havens or jurisdictions. Bank is located in a HIDTA and a HIFCA. A large number of fund transfers or account relationships involve HIDTAs or HIFCAs. Significant volume of transactions with high-risk geographic locations. The bank offers a wide array of telephonic banking services on the deposit and loan products. High turnover, especially in key personnel positions.

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noncustomers, limited third- party transactions, and some foreign funds transfers.

Bank Location

The bank is not located in a high-intensity drug trafficking area (HIDTA) or high-intensity financial crimes area (HIFCA). No fund transfers or account relationships involve HIDTAs or HIFCAs. No transactions with high-risk geographic locations.

The bank is located in a HIDTA or HIFCA. Bank has some fund transfers or account relationships that involve HIDTAs or HIFCAs.

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High-Risk Geographic Locations Telephonic Banking

Minimal transactions with high risk geographic locations.

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No telephonic banking services offered.

The bank offers limited telephonic banking services including account transfers, check balances and deposits. Low turnover of key personnel but frontline personnel (i.e., tellers) may have changed.

2

Employee Turnover (during last 18 months)

Low turnover of key personnel or frontline personnel (i.e., customer service representatives, tellers, or other branch personnel).

3

Total

16

The average risk score for the bank is 1.33, therefore we conclude that the risk of the bank being used to launder money from illegal activities or conduct terrorist financing is low. VIII. Quantity of Risk Matrix — OFAC Procedures

Category

Low = 1

Moderate = 2

High = 3

Our Ranking

Customer Base Stable, well-known

Customer base changing due to branching, merger or acquisition in the domestic market. A moderate number of high- risk customers.

A large, fluctuating client base in an international environment.

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customer base in a localized environment Few high-risk customers; these may include nonresident aliens, foreign customers (including accounts with U.S. powers of attorney) and foreign commercial customers. No overseas branches and no correspondent accounts with foreign banks.

High Risk Customers

A large number of high-risk customers.

1

Foreign Branches and Correspondent Bank Accounts

Overseas branches or correspondent accounts with foreign banks.

Overseas branches or multiple correspondent accounts with foreign banks.

1

4