BSA/AML Student Exercises Dec. 2022

Enhanced Customer Due Diligence-CDD Procedures If you have identified a High Risk Customer during account opening, you should review all required items under Enhanced Due Diligence. Account officer should make reasonable efforts to document and obtain (in the system or in a memorandum) the following additional information. Any memorandums should be sent to the BSA Officer. If the BSA Department determines that your high risk customer is subject to expanded review procedures because it represents a higher risk to the Bank, the BSA Officer will require the information below to make a final determination on the customer relationship and account activity: Expanded Review Procedures for Enhanced Due Diligence (For Business Accounts (foreign and domestic), Cash-Intensive Businesses, and Non-Governmental Organizations and Charities) • Ensure the Bank has obtained all proper identification for all signers and /or owners; • List a description of the principal line of business and all types of business operations the customer engages in; • Document whether the customer's business operations is retail vs. wholesale; • For large businesses, provide financial statements and a list of the business's major suppliers and customers; • Document type of products and services used by the customer (i.e., domestic or international wires, cash deposits, ACH transactions, private banking services, etc.) • List details on the source of funds and wealth; • Document the proximity of the customer's residence, place of employment, or place of business to the Bank; • Include a description of the customer's primary trade area and whether international transactions are expected to be routine; • For Non-governmental Organizations, state the purpose and objectives of their stated activities, the geographic locations served (including headquarters and operational area); the organization structure; the donor and volunteer base; funding and disbarment criteria (including basic beneficiary information). • For cash intensive businesses, state the purpose of the account; the volume, frequency and nature of currency transaction; the primary business activity, products and services; geographic locations and jurisdictions of operation; on site visitation. Note: The BSA Department will determine if further enhance due diligence is required after account has been opened and monitored. Nonresident Aliens (NRA) and Foreign Individuals Procedures Account officer should make reasonable efforts to document and obtain (in the system or in a memorandum) the following. Any memorandums should be sent to the BSA Officer: • Seek information directly from the customer regarding possible Politically Exposed Person (PEP) status; • Check references, as appropriate, to determine whether the individual is or has been a PEP; • If the Non Resident Alien is a PEP, be sure to advise the BSA Officer and follow the enhanced due diligence for Politically Exposed Person; • Ensure the Bank has obtained all proper identification for all accountholders;

• Document the accountholder's home country; • Document source of funds and source of wealth;

For Training Purposes Only

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