BSA/AML Student Exercises Dec. 2022

Note: Remember, in order for the OFAC System to automatically verifying all applicants and guarantors against the Bank's current OFAC listing, a CIF file must be created for the applicants and guarantors. Manual verification is possible by doing an OFAC inquiry. At the time an application is received, the loan officer must inquire with the Office of Foreign Assets Control on the individual, individuals or a company requesting credit. This can be done by doing an inquiry on OFAC Tracking System. If after the inquiry, there is a match, the loan officer will then notify the OFAC compliance Officer or BSA Department. The OFAC compliance Officer will then contact the Office of Foreign Assets Control at (800) 540-6322 for clarification and confirmation of the match. If there is a positive match, the OFAC compliance officer will then follow the procedures given by the Office of Foreign Assets Control, and the loan officer will not proceed with the loan application process. If the inquiry is not a match, the loan officer will proceed with the loan application process. If the OFAC compliance officer or BSA Department personnel are not available at the time a positive match is obtained, the loan officer under the direction of Senior Management will then call the Office of Foreign Assets Control for clarification and confirmation of the match and proceed as instructed. The loan officer will notify the OFAC compliance Officer of the results of the match as soon as deemed possible. Real Estate Loans In addition to verifying that borrowers are not on the OFAC lists, the Bank will also verify that the seller of the property is not on the lists when real estate loans are closed at the Bank. When the loans are closed by attorneys or title companies, the. Bank will conduct a due diligence review to ensure that the attorney or title company has adequate procedures in place to verify that sellers are not on the OFAC lists. If they do not, then the Bank will compare the seller's name to the lists before funding the loan. Retail Banking — New Accounts and Operations Personnel Before opening a new account, whether it is a commercial or consumer checking or savings account, loan, certificate of deposit, individual retirement account (IRA), investment savings account or safety deposit box, the new accounts personnel will do an inquiry on OFAC Tracking System. Keep in mind that during new customer OFAC Tracking System automatically scans the new customers' information against the OFAC List. The System will automatically prompt a message to the new accounts personnel when a possible match is encountered during the new account input processing. The new account/loan personnel must thoroughly review all the OFAC names prompt for possible matches. The new accounts personnel will inquire on the following: If there is a similar match on the OFAC list to any one of the above-mentioned inquiries, the new accounts department should proceed with opening the new account and notify the OFAC compliance Officer immediately. 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 a positive match, the OFAC compliance Officer will follow the instructions given by the Office of Foreign Assets Control. It is very critical that the account be blocked before any transactions are made on the account. • The individual/individuals opening the account, during the CIF setup; • The company name and signers of the commercial account during CIF setup.

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