BSA/AML Examiner School Case Study

Internal Use Only

information will be referred to the BSA officer for investigation. The BSA officer will determine if a SAR must be filed. Foreign Customers and CIP • USA PATRIOT Act specifically authorizes banks to distinguish between U.S. citizens and non-U.S. citizens for the purpose of determining acceptable forms of identifying information. Therefore, banks are allowed to ask if a new customer is a U.S. citizen. You must obtain a taxpayer identification number (TIN) and TIN certification (VV-9 form) from all U.S. citizens on deposit accounts. Non-U.S. citizens must complete a W-8 form. If your customer does not have a TIN, then the customer must show you an application for it or you cannot open the account. • Non-Resident Alien (NRA) customers may request W-8 status for U.S. tax withholding. In such cases, the NRA customer completes a W-8 form, which attests to the customer's foreign and U.S. tax-exempt status. While it is an Internal Revenue Service (IRS) form, a W-8 is not sent to the IRS but is maintained on file at the bank to support the lack of any tax withholding from earnings. Note: Refer to the CIP Matrix requirements by type of customer and account for documentation on Non U.S. citizens. Lack of Verification When the Bank cannot form a reasonable belief that we know the true identity of a customer, the Bank will apply the following: • Decline to open the account. Opening Accounts When the Customer Is Not Present at the Bank (Accounts Opened by Mail, Telephone, or via the Internet) • AJ&R Bank DOES/DOES NOT open accounts by Mail, Telephone, or via the Internet. • All person(s) must be present at the time of account opening. Comparison with Government Lists • All new customer names and existing customer names must be verified against the OFAC list provided by FIS. The FIS Software/OFAC Tracking System will automatically do an initial screening of new accounts (CIF input). You are responsible to review the results. If a customer does appear on the OFAC System (OFAC.CIFM_307.PDF), The BSA Officer should be notified IMMEDIATELY in order to properly document and notify the respective government agency. Refer to Guidance on OFAC Enforcement Policy for a detailed description of detection procedures. • Loans — The best procedure is to compare them against the OFAC list before the loan is funded. • The Bank's systems also check for names on Non-SON lists including the FSE list, SSI list and the NS-PLC list. Customer Notification The bank will notify new customers about these procedures by posting signs in the lobby and displaying table tents at each desk where accounts are opened or loan applications are provided, notifying customers that we will be requesting information to verify their identity. The customer is provided with adequate notice of the Bank's requirement to verify a customer's identity prior to opening an account. The Bank should use the following language to provide to customers:

For Training Purposes Only

Page 19