BSA/AML Student Exercises Dec. 2022

violation. If a situation involving violations requires immediate attention, such as when a reportable violation is ongoing, management should immediately notify by telephone or other expeditious means the appropriate law enforcement agency and FinCEN, in addition to filing a timely report.) After an initial SAR is filed, additional SARs for continuing suspicious activity will be filed every 90 days. At this time, management will consider closing the account as a result of continuous suspicious activity. Law enforcement inquires and requests (national Security letters (NSLs), grand jury subpoenas and section 314(a) request All request and inquires will be reviewed by the BSA Officer for unusual or suspicious activity. The BSA Department will file a SAR if necessary, after reviewing the affected account. The Security Officer will maintain all law enforcements request. SARs are confidential. Any person subpoenaed or otherwise requested to disclose a SAR or the information contained in a SAR shall decline to produce the information. All law enforcement inquiries and requests (such as grand jury subpoenas, National Security Letters (NSLs) and section 314(a) requests are to be referred to the BSA/OFAC Officer for assistance. Mere receipt of any law enforcement inquiry does not by itself require the filing of a SAR by the Bank. Nonetheless, a law enforcement inquiry may be relevant to the Bank's overall risk assessment of its customers and accounts. National Security Letters (NSLs) are written investigative demands that may be issued by the local Federal Bureau of Investigation (FBI) and other federal governmental authorities in counterintelligence and counterterrorism investigations to obtain the following: Telephone and electronic communications records from telephone companies and Internet service providers; Information from credit bureaus; and Financial records from financial institutions. Pursuant to 12 USC 3414(a)(3) and (5)(D), the Bank can not disclose to any person that a government authority or the FBI has sought or obtained access to records through a Right to Financial Privacy Act NSL. In the event the Bank receives a NSL it must be forwarded to the BSA/OFAC Officer to ensure that appropriate measures are taken to ensure the confidentiality of the letter and taking appropriate action. In the event the Bank files a SAR after receiving a NSL, the SAR must not contain any reference to the receipt or existence of the NSL. The SAR is to only reference those facts and activities that support a finding of unusual or suspicious transactions identified by the Bank. Notification of the SAR filing to the Board of Directors On a monthly basis, the BSA Officer will notify the BOD of any SARs filed for the month, SARs considered-but not filed and if no SARs are filed. This shall be notated in the Board Minutes. The BSA Department has implemented a process of notification. Confidentiality SARs are confidential. Any bank subpoenaed or otherwise requested to disclose a SAR or the information contained in a SAR shall decline to produce the SAR or to provide any information that would disclose that a SAR has been prepared or filed. The Bank should cite its rights under Part 353 of the FDIC's Rules and Regulations and notify the appropriate FDIC regional office. In addition, no Bank, director, officer, employee or agent of the Bank, that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported. Thus, any person subpoenaed or otherwise requested to disclose a SAR or the information contained in a SAR, except when such disclosure is requested by FinCEN or an appropriate law enforcement or federal banking agency, shall decline to produce the SAR or to provide any information that would disclose that

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