BSA/AML Examiner School Case Study

Internal Use Only

Monitoring Cash Activity FIS 393 reports that identify all currency activity and currency activity greater $10,000 and less than $10,000. These reports assist the BSA Department to monitor all transactions needing a CTR and also identify suspicious currency activity, such as the following examples: 1. Currency activity including multiple transactions greater than $10,000; 2. Currency activity (single and multiple transactions) below the $10,000 reporting requirement (i.e., between $5,000 and $10,000); 3. Currency transactions involving multiple lower dollar transactions (i.e., $3,000) that over a period of time aggregate to a substantial sum of money (i.e., $30,000); or 4. Currency transactions aggregated by customer name, tax identification number or customer information file number. These reports identify and evaluate unusual currency transactions. However, all employees are encouraged to report any unusual cash activity. The BSA Department will investigate the issue further. Note: Please alert the BSA Officer, in the event the customer, after becoming aware that a report may be filed because identifying information has been requested, declines to follow through with a transaction which has already been initiated. Proper documentation needs to be kept on this type of occurrence. XIV. Currency Transaction Reporting Exemption Policy and Procedures Overview It is the policy of the Bank to comply with all regulation requirements for exemptions from the currency transactions reporting requirements. The purpose of an exemption is to avoid the filing of CTRs for the normal conduct of lawful businesses, Exempt Persons, commonly referred to as "Phase I" and "Phase II,' exemptions were aimed at simplifying the process by which the Bank may exempt customers in an effort to reduce the large volume of CTRs filed. The Bank must retain a record of all designation of person exempt form CTR reporting as filed with the Treasury for a period of 5 years from the designation revocation date. The regulation provides a safe harbor that the Bank is not liable for the failure to file a CTR for a transaction in currency by an exempt person, unless the Bank knowingly provides false or incomplete information or has reason to believe that the customer does not qualify as an exempt customer. In the absence of any specific knowledge or information indicating that a customer no longer meets the requirements of an exempt person, the Bank is entitled to a safe harbor from civil penalties to the extent it continues to treat that customer as an exempt customer until the date of the customer's annual review. • The Bank has elected to establish exemptions - these exemptions are authorized and monitored in accordance with the applicable regulatory requirements; • The BSA Department has procedures in place for filing requirements and Annual Review of Exemptions; • The BSA Officer monitors the exempt accounts and will file Suspicious Activity Reports ("SARs") with respect to transactions conducted by "exempt persons" if suspicious account activity is detected; • The Bank's external audits review that Bank exemptions were granted in accordance with the regulation and the BSA officer maintains supporting documentation for the exemption.

For Training Purposes Only

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