BSA/AML Examiner School Case Study

Internal Use Only

Information Sharing Between Financial Institution and the Federal Government If, as a result of information shared by the Bank, and the Bank knows, suspects or has reason to suspect that an individual, entity or organization is involved in, or may be involved in terrorist activity or money laundering, and the Bank is subject to a suspicious activity reporting, the BSA/OFAC Officer is to file a Suspicious Activity Report. In situations involving violations requiring immediate attention, such as when a reportable violation involves terrorist activity or is ongoing, the BSA/OFAC Officer is to immediately notify, by telephone, an appropriate law enforcement authority and Senior Management in addition to filing a Suspicious Activity Report. XVIII. Office of Foreign Assets Control (OFAC) Policy and Procedures Overview AJ&R Bank has established the following controls to comply with the Office of Foreign Assets Control (OFAC), which administers a series of laws that impose economic sanctions against targeted hostile foreign countries and groups to further U.S. foreign policy and national security objectives. The laws implemented by OFAC regulations (31 CFR 500) are: • The Trading with the Enemy Act (TWEA), targeting North Korea and Cuba; transaction control regulations can be found at 50 USC App. 1-44. • The International Emergency Economic Powers Act (IEEPA) is aimed at Libya, Iraq, Serbia, Montenegro, Bosnia, UNITA, Iran, terrorism, and narcotics; IEEPA can be found at 50 USC 1701 1706. • The Iraqi Sanctions Act (ISA) specifically targets Iraq and can be found at Pub. L. 101513, 104 Stat. 2047-55. • The United Nations Participation Act (UNPA) applies to Iraq, Libya (part), UNITA, Serbia, Montenegro, and Bosnia; the act can be found at 22 USC 287c. • The International Security and Development Cooperation Act (ISDCA) is aimed at Iran and can be found at 22 USC 2349aa-9. • The Cuban Democracy Act (CDA), 22 USC 6001-10 (relating to Cuba), has the same force of law as TWEA above. • The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act, 22 USC 6021-91 (relating to Cuba), has the same fines as TWEA above and codifies the Cuban assets control regulations. • The Antiterrorism and Effective Death Penalty Act, enacting 8 USC 219, 18 USC 2332d, and 18 USC 2339b. • The Foreign Narcotics Kingpin Designation Act, Pub L. No. 106-120, tit. VIII, 113 Stat 1606, 1626 1636 (1999) will be codified at 21 USC 1901-1908. • The Criminal Code, at 18 USC 1001, provides for five years imprisonment and a $10,000 criminal fine for knowingly making false statements or falsifying or concealing material facts when dealing with OFAC in connection with matters under its jurisdiction. Currently, there are two government lists. First is the OFAC List, OFAC regulations penalize US banks for actually conducting transactions with Specially Designated National (SDNs). The second list is the list of "known or suspected terrorists or terrorist organizations" as described in Section 326 of the USA Patriot Act. A bank that fails to compare a name to a "326 list" before opening an account would be guilty of a violation of law. Currently, there are no "326 lists", available.

For Training Purposes Only

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