BSA/AML Student Exercises Dec. 2022

account, product or service (deposit or lending based) with OFAC lists prior to allowance of any transactions on such accounts. Established accounts, once scanned, are periodically compared against OFAC updates. Inquiry Procedures The FIS/OFAC Tracking System is provided by our data processing system FIS. The system automatically does an initial screening of new accounts. The system also downloads any OFAC updates and scans our entire database for possible new matches. Initial Scanning for OFAC The FIS/OFAC Tracking System will automatically do an initial screening of new accounts (CIF input). The OFAC system compares the names and addresses of new customers to the OFAC file and the OFAC Matching Word (list of hit word). If the OFAC system finds a hit between the name and address tines on the CIF and an entry in the OFAC file or an entry in the matching word listing, the employee will be prompt, the screen alerts the employee to the hit and the reason. The Kentucky Bankers Bank and FIS will also screen funds transfers' activity and ACH transactions daily for possible matches. Reports from OFAC- Kentucky Bankers Bank and FIS provides a daily report with all ACH transaction, wire transfer entries. The OFAC Activity report is reviewed daily by a designated person to ensure that all previous OFAC alerts were not positive matches. CIF OFAC Inquiries All established accounts, once the initial scan, are periodically compared against OFAC updates. Be aware that the OFAC list gets updated regularly. Sometimes the Office of Foreign Assets Control (OFAC) adds or deletes suspect names monthly, weekly and at times daily FIS will automatically upload the OFAC Listing and any new updates from the US Department of the Treasury's website into our data processing system. Every time there is an update on the OFAC Listing our data processing system will advise the BSA Department and will automatically run it against our entire customer database for any possible matches. Each customer name or miscellaneous information such as an alternative name and addresses in the CIF Master File will be screened with the updated OFAC Listing. Two reports with the results will be reviewed by the BSA Department. Any positive matches will then be verified with the Office of Foreign Assets Control for clarification and confirmation of the match. If there is a positive match, the BSA/OFAC Compliance Officer will follow the instructions given by the Office of Foreign Assets Control. Update Scanning for OFAC Reports are generated by the FIS/OFAC Tracking SYSTEM every time our customer database is scanned with a new OFAC Listing. These reports are reviewed by a designated person. CIF OFAC Suspects ( OFAC_CIFM307 report) — List all existing customers by CIF numbers that are OFAC suspects. Structure of Accountability • The BSA Officer is responsible for the overall bank compliance with OFAC regulations. They will report to the Board of Directors and Senior Management concerning compliance reviews of the reports, impact of new regulations or changes to existing regulations and general compliance issues and concerns. • Maintaining current copies of applicable compliance statutes, regulations, interpretations and the Specially Designated National (SDN) list or NS-PLC lists.

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