BSA/AML Student Exercises Dec. 2022

• For the day-to-day compliance of the OFAC Compliance Program, including the annual reporting of blocked or rejected transactions to OFAC, litigation reports and the oversight of blocked funds. • Maintaining proficient knowledge of applicable compliance statutes, regulations and interpretations. • Formulating and updating bank policies and procedures to maintain bank compliance with applicable compliance statutes, regulations and interpretations. • Coordinating the training of bank personnel on bank compliance policies and procedures. • Monitoring blocked funds, if any. • The BSA/OFAC Officer will file a report on rejected items within 10 days. This report will contain at minimum: The date and amount of the transfer; a photocopy of the payment or transfer instructions received; the basis for rejection; and the name and telephone number of a contact person at the transferee bank from whom compliance information can be obtained. Reports of rejected transfers are to be filed with the Compliance Programs Division office. • The BSA Department will report blocked property to OFAC within 10 days of the date the property is blocked. The reporting requirement for blocked property applies to any form of tangible or intangible property that is blocked pursuant to the OFAC Regulations. The reports are to be transmitted to OFAC Compliance Programs Division and must identify the minimum requirements specified by OFAC. • Total amounts blocked, including interest, will be reported by the Bank to OFAC by September 30 of each year (information as of June 30). Annual reports must be filed using the form entitled "Annual Report of Blocked Property." • The OFAC Officer will report to OFAC U.S. persons involved in litigation, arbitration or other binding alternative dispute resolution proceedings regarding blocked property by: Providing notice of such proceedings to OFAC Chief Counsel; Submitting copies of all documents associated with such proceedings within 10 days of their filing to OFAC Chief Counsel; and Faxing information about the scheduling of any hearing or status conference to OFAC Chief Counsel. Maintaining License Information The Bank's BSA/OFAC Officer maintains copies of customers' OFAC specific licenses on file to verify whether a customer is initiating a legal transaction. If it is unclear whether a particular transaction is authorized by a license, it is the responsibility of the BSA/OFAC Officer to confirm this with OFAC. Maintaining copies of licenses assist Bank personnel in the event another banking institution in the payment chain requests verification of a license's validity. Copies of licenses should be maintained for five years, following the most recent transaction conducted in accordance with the license. The BSA Department will submit license applications to OFAC in letter format, with the exception of license applications for the unblocking of funds transfers. Applications for the unblocking of funds transfers must be submitted using the form entitled "Application for the Release of Blocked Funds," accompanied by two complete copies of the entire submission. This form requires information regarding the date of the blocking, the banks involved in the transfer, and the beneficiary and amount of the transfer. Applications are to be sent to the Licensing Division of OFAC. The Bank also requires that a statement is obtained from the licensee as a matter of procedure that the transaction is in accordance with the terms of the license, assuming the Bank does not know or have reason to know that the statement is false in the case of a transaction performed under general license (or, in some cases, a specific license).

For Training Purposes Only

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