BSA/AML Examiner School Case Study

Internal Use Only

 Demand deposit activity reports — These reports cover all customer and employee accounts, they show daily balances and accumulate deposits and withdrawals over a 30-days period. Management may establish a threshold for certain types of accounts and review only the exceptions.  Large transaction reports — These reports will be set at an amount lower than $10,000 to identify customers who might be structuring transactions to avoid CTR reporting or who have unusual activity in their account. Ensure that transaction amounts are consistent with the type of business or occupation of the customer. These reports will also serve to monitor "exempt persons" accounts for unusual or suspicious activity.  Incoming and Outgoing wire transfer report — This report identifies transfers of funds out of the country or to remote banks, transfers funded by cashier's checks or money orders in amounts under the CTR filing threshold and other suspicious activity of accountholders.  Hold notices for Regulation CC — All frontline personnel and items processing personal are instructed to notify a supervisor or officer when they hold an unusual check (i.e., in amount or in the location of the drawee bank) on a customer's account. High Risk Customers One of the key aspects of an effective anti-money laundering program is the identification of customers that may pose a higher risk to the bank and may need extensive monitoring. The account officers must identify high risk customers at account opening process and/or throughout the account relationship. A high-risk customer can also be identified or classified based on the totality of the circumstances, not just the type of business. High Risk customers may include regular customers, businesses, exempt customers, foreign customers or any other type of customers in the bank. Many factors will be taken in consideration to determine if a customer or business classified as "High Risk" should be closely monitored by the BSA Department. For example, a customer or a high-risk customer (business account) with frequent cash transactions (deposit or withdrawals), frequent wire transfers and cash intensive businesses may pose a higher risk needing additional monitoring than a business with no cash deposits or wire transfers. All high-risk accounts will be closely monitored by the BSA Department. Customers that create a higher risk will be placed in The BSA - High Risk Customer listing maintained by the BSA Department; the listing will be updated as necessary. High risk customers will be placed in this listing after a thorough analysis on the account, and not from a label affixed to the customer's operations. In addition, the line of business the customer is involved in, may not necessarily place them in The BSA- High Risk Customer Listing . Once the customer is identified as posing a higher risk for the Bank and needing additional monitoring, a file will be created and maintained for that customer for the duration of its status. Customers' activity is monitored closely utilizing a combination of system reports (i.e., currency transaction reports, wire transfer activity report, etc.). A review is performed periodically to determine if a customer shall remain under monitoring status. It is the responsibility of the BSA Officer to validate the frequency of account monitoring by reviewing the "high risk" customer's file and subsequently revising the frequency from time to time. In addition, the BSA Officer and the SAR Committee will determine whether an account should be closed, additional monitoring required, or a SAR completed. All officers should review the section on Customer Due Diligence of this Program. This will ensure the officer has obtained all the necessary documents on file for "High Risk Customers".

For Training Purposes Only

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