BSA/AML Student Exercises Dec. 2022

Blocking/Rejecting Transactions The BSA Department has implemented procedures for handling and reporting transactions that are validly blocked or rejected under the various sanctions’ programs. All staff must make sure that business is not conducted with blocked or specially designated countries, entities or individuals including in the opening of new accounts and in handling wire transfers and other funds transfers. Note: An audit trail must be maintained in order to reconcile all blocked funds. This will include tracking the amount of blocked funds, the ownership of those funds, interest paid on those funds and the release of blocked funds pursuant to license. The Bank must file initial and annual reports of blocked property, reports on rejected funds transfers and litigation reports when required by OFAC. The Bank must block fund transfers that are remitted: • By or on behalf of a blocked individual or entity; • To or through a blocked entity; • In connection with a transaction in which a blocked individual or entity has an interest. If the Bank receives instructions to make a payment that falls into one of these categories, the Bank will execute the payment order/wire transfer and place the funds into a blocked account. A wire transfer cannot be canceled or amended after the Bank has received it. Once assets are blocked, the Bank will release them only by specific authorization from the U.S. Treasury. The Bank will report all blocks to OFAC within 10 days of occurrence. The Bank recognizes that every Bank transaction is potentially subject to a blocking under OFAC regulations. U.S. law requires that assets and accounts be blocked when such property is located in the United States, is held by U.S. individuals or entities, or comes into the possession or control of U.S. individuals or entities. As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by or acting for or on behalf of targeted countries. It also lists individuals, groups and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called specially designated nationals (SDNs). Their assets are blocked, and U.S. persons are generally prohibited from dealing with them. OFAC also has published a list called NS-PLC, this list contains the names of individuals who are affiliated with terrorist organizations and have been elected to the Palestinian Legislative Council. The individuals listed on the NS-PLC List are PLC members who were elected on the party slate of a foreign terrorist organization, specially designated terrorist or specially designated global terrorist. Their names do not, however, appear on the SDN list. All transactions involving these individuals must be rejected. Training It is the policy of the Bank that all personnel receive adequate training on OFAC compliance consistent with our OFAC risk profile and how OFAC compliance relates to an employee's specific responsibilities. OFAC training is provided to all employees of the Bank and it is done in conjunction with the BSA Training. The BSA Department maintains records of all staff training. All Bank employees will receive general training/material on OFAC regulations within 90 days of employment and annually thereafter. The following departments will receive annual training: • Wire transfer • Operations and Lending

For Training Purposes Only

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