AML Compliance Programs Flashcards

What is the minimum civil money penalty FinCEN can assess for a willful BSA violation per transaction?

Answer: $25,000

For willful BSA violations, FinCEN can assess civil money penalties of up to $25,000 per day per violation, and criminal penalties can be even higher.

What is 'smurfing' in the context of money laundering?

Answer: Structuring large cash transactions into multiple smaller ones to avoid reporting thresholds

Smurfing is a form of structuring where a large sum is broken into multiple smaller transactions, each below the $10,000 CTR threshold, to evade currency reporting requirements.

Which element is NOT required to be included in a written AML compliance policy?

Answer: Names of all customers identified as high risk

AML policies describe frameworks and procedures but do not list individual customer names; high-risk customers are managed through systems and processes, not named in policies.

Under the BSA, what is the threshold amount that triggers mandatory Currency Transaction Report (CTR) filing?

Answer: $10,000

Financial institutions must file a CTR for any cash transaction exceeding $10,000 in a single business day, whether in one or multiple related transactions.

What is the purpose of a 'gap analysis' in an AML compliance program?

Answer: To identify weaknesses or deficiencies in the current AML program compared to regulatory expectations

A gap analysis compares the institution's existing AML controls and procedures against regulatory requirements and best practices to identify areas needing improvement.

Which of the following best describes 'willful blindness' in AML compliance?

Answer: Intentionally avoiding knowledge of suspicious circumstances that a reasonable person would investigate

Willful blindness (also called conscious avoidance) occurs when a person deliberately avoids learning facts that would confirm suspicious activity, and courts treat this as equivalent to actual knowledge.