BSA/AML Student Exercises Dec. 2022

The Bank will retain all documentation related to the identity verification of customers for a period of five years after the account is closed. XI. Customer Due Diligence and Enhanced Due Diligence Policy and Procedures It is the intent and policy of the Bank to have a clear and concise understanding of all Bank customer practices in order to avoid criminal exposure to the Bank by any "customer" who would use the Bank's resources for illicit purposes. The objective of the policy and procedures implemented by the Bank is to ensure the immediate detection and identification of suspicious activity at the Bank and to identify those customers that may pose higher risk for money laundering or terrorist financing. Customer Due Diligence , or best described as "Know Your Customer", is a process of obtaining information at account opening and during the life of the account that helps the Bank in identifying potentially high risk customers. Once those customers are identified, they become subject to Enhanced Due Diligence. The goal of Customer Due Diligence is to identify high risk customers that may require Enhanced Due Diligence. Review the list below of 'Customers and Entities of Interest" that will need Enhanced Due Diligence at account inception or after account has been opened. Enhanced Due Diligence (EDD) includes extraordinary questions because the person or entity has been identified as subject to expanded review procedures. Information sought is needed to more specifically predict account activity and increase the Bank's comfort level with the relationship.

List of High Risk Customers: • Politically Exposed Persons

• Embassy and Foreign Consulate Accounts • Professional Service Provider Accounts • Nonresident aliens and foreign individuals • Non-Bank Financial Institutions (MSBs) • Non-Governmental Organization and Charity Accounts • Business Entities (domestic and foreign)

• Cash Intensive Businesses • Private Banking Customers Customer due diligence (CDD) consists of routine questions which broadly predicts account activity, but specifically identify persons and entities subject to enhanced due diligence. Customer Identification program (CIP) describes routine requirements for specific information that identifies the person or entity. Verification by documentary or non-documentary methods is required by law. Customer Due Diligence for all Customers In general, the Bank's Customer Due Diligence Program enables Bank personnel to predict with relative certainty the types of transactions in which a customer is likely to engage, and in turn assists the Bank in determining when transactions are potentially suspicious. The concept of customer due diligence begins with verifying the customer's identity and assessing the risks associated with that customer, including enhanced customer due diligence for high risk customers and ongoing due diligence of the customer base. In addition, these measures help the Bank to: 1. Comply with regulatory requirements;

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