BSA/AML Examiner School Case Study

Internal Use Only

Real Estate Loans In addition to verifying that borrowers are not on the OFAC lists, the Bank will also verify that the seller of the property is not on the lists when real estate loans are closed at the Bank. When the loans are closed by attorneys or title companies, the. Bank will conduct a due diligence review to ensure that the attorney or title company has adequate procedures in place to verify that sellers are not on the OFAC lists. If they do not, then the Bank will compare the seller's name to the lists before funding the loan. Retail Banking — New Accounts and Operations Personnel Before opening a new account, whether it is a commercial or consumer checking or savings account, loan, certificate of deposit, individual retirement account (IRA), investment savings account or safety deposit box, the new accounts personnel will do an inquiry on OFAC Tracking System. Keep in mind that during new customer OFAC Tracking System automatically scans the new customers' information against the OFAC List. The System will automatically prompt a message to the new accounts personnel when a possible match is encountered during the new account input processing. The new account/loan personnel must thoroughly review all the OFAC names prompt for possible matches. The new accounts personnel will inquire on the following: If there is a similar match on the OFAC list to any one of the above-mentioned inquiries, the new accounts department should proceed with opening the new account and notify the OFAC compliance Officer immediately. The OFAC compliance Officer will then call the Office of Foreign Assets Control at (800) 540-6322 for clarification and confirmation of the match. If the inquiry is a positive match, the OFAC compliance Officer will follow the instructions given by the Office of Foreign Assets Control. It is very critical that the account be blocked before any transactions are made on the account. If the OFAC compliance officer or the BSA Department personnel is not available at the time a positive match is obtained, the new accounts Senior Management will then call the Office of Foreign Assets Control for clarification and confirmation of the match and proceed as instructed. The new accounts department will notify the OFAC compliance officer of the results of the match as soon as deemed possible. XIX. Special Measures (Section 311 of the Patriot Act) Policy and Procedures Overview Section 311 of the Patriot Act requires the Bank to take certain special measures against foreign jurisdictions, foreign financial institutions, and classes of international transactions or types of accounts of primary money laundering concern. Section 311 establishes a process for the Secretary of the Treasury to follow and identifies federal agencies to consult before the Secretary of the Treasury may conclude that a jurisdiction, financial institution, class of transactions or type of account is of primary money laundering concern. The statute also provides similar procedures, including factors and consultation requirements, for selecting the specific special measures to be imposed against a jurisdiction, financial institution, and class of transactions or type of account that is of primary money laundering concern. • The individual/individuals opening the account, during the CIF setup; • The company name and signers of the commercial account during CIF setup.

For Training Purposes Only

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