BSA/AML Student Exercises Dec. 2022

AJ&R BANK & TRUST Bank Secrecy Act, Anti-Money Laundering and OFAC Compliance Program May 20, 2015

Table of Contents

POLICY DESCRIPTION, AUTHORITY AND SCOPE........................................................................... 5 I. Penalties ........................................................................................................................................... 5 II. BSA/AML/OFAC COMPLIANCE PROGRAM ........................................................................ 5 III. BSA Risk Assessment .................................................................................................................. 5 IV. System of Internal Controls ......................................................................................................... 6 V. Independent Audits ...................................................................................................................... 6 VI. Designation of BSA Officer ......................................................................................................... 6 VII. Training of all Staff Personnel ..................................................................................................... 6 INTERNAL CONTROLS/REGULATORY REQUIREMENTS .............................................................. 7 VIII. Anti-Money Laundering Policy and Procedures ...................................................................... 7 Integration ........................................................................................................................................... 7 Procedures for Complying with Anti-Money Laundering.................................................................. 8 High Risk Customers .......................................................................................................................... 9 IX. Detecting Suspicious Activity – “RED FLAGS”......................................................................... 9 Structure Transactions ...................................................................................................................... 10 General "Red Flags" for Suspicious Activity ................................................................................... 10 Red Flags for Customer Service/New Account Representatives/Safe Deposit Staff ....................... 11 Red Flags for Wire Transfers Used in Money Laundering............................................................... 12 Red Flags in Foreign Correspondent Banking.................................................................................. 13 Red Flags in Private Banking Accounts ........................................................................................... 13 Red Flags for Lenders ....................................................................................................................... 14 X. Customer Identification Program Policy and Procedures .......................................................... 14 Definitions......................................................................................................................................... 15 Verifying Account Opening Documentation .................................................................................... 16 Loan Customers and CIF .................................................................................................................. 17 Foreign Customers and CIP .............................................................................................................. 17 Lack of Verification.......................................................................................................................... 17 Opening Accounts When the Customer Is Not Present at the Bank................................................. 17 Comparison with Government Lists ................................................................................................. 18

For Training Purposes Only

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