BSA/AML Student Exercises Dec. 2022

• The beneficiary (individual or company receiving credit from the wire we are sending). For Incoming we must check: • The originator of the wire (the name of the person sending the wire to our customer); • The originating/sending bank (bank receiving wire); • The beneficiary (our customer). After inquiring on the above-mentioned, the wire transfer clerk will initial and record the results to the wire transfer request form. If there is a match on the OFAC list to any one of the above mentioned inquiries, the wire transfer clerk will notify the OFAC compliance officer immediately and will not proceed to process the wire. The OFAC compliance officer will then call the Office of Foreign Assets Control at (800) 540-6322 for clarification and confirmation of the match. If the inquiry is not a positive match, the OFAC compliance officer will then instruct the wire transfer clerk to proceed in processing the wire transfer request. If the inquiry is a positive match, the OFAC compliance officer will follow the instructions given by the Office of Foreign Assets Control and will freeze the assets until further notified. A wire transfer cannot be cancelled or amended after the Bank has received it. Once assets are blocked, we will release them only by specific authorization from the U.S. Treasury. We will report all blocks to OFAC within 10 days of occurrence. If the OFAC compliance officer or BSA department personnel is not available at the time a positive match is obtained, the wire transfer clerk under the direction of a Senior Management will then call the Office of Foreign Assets Control for clarification and confirmation of the match and proceed as instructed. The wire transfer clerk will notify the OFAC compliance officer of the results of the match as soon as deemed possible. OFAC Screening for ACH Transactions All parties to an ACH transaction are subject to the requirements of OFAC. For domestic ACH transactions, the Originating Depository Bank (ODFI) is responsible for verifying that the originator is not a blocked party and making a good faith effort to determine that the originator is not transmitting blocked funds. The Receiving Depository Bank (RDFI) similarly is responsible for verifying that the receiver is not blocked party. In this way, the ODFI and the RDFI are relying on each other for compliance with OFAC polices and due diligence on their customers. All ACH customers must be checked against the OFAC list. The ACH personnel must ensure that the account officer has performed adequate due diligence on these customers. If an ACH personnel received a batch transaction from one of our customers, the ACH personnel is not responsible for unbatching transactions to ensure that the customer does not process transactions in violation of OFAC regulations. However, if the Bank, as an Originating Depository Bank, unbatches (errors, wrong information) the ACH transactions received from our customers, then the ACH personnel will be responsible for screening all names against the OFAC list as though we had done the initial batching. Commercial Loans/Consumer Loans/Letters of Credit It is the practice of the AJ&R Bank to establish credit to customers who do not or will not have a deposit account at the Bank. On these occasions, where loans are established the Bank, even though the customer does not have a deposit account with us, the procedures outlined below need to be followed to comply with the Office of Foreign Assets Control.

For Training Purposes Only

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