Bank Secrecy Act & SAR Filing Flashcards
7 cards from real CFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bank Secrecy Act & SAR Filing flashcards as text
A fraud examiner reviews a SAR and notices the narrative section is vague and lacks specific details. Why is a complete SAR narrative critical?
Answer: It provides law enforcement the context needed to initiate or support an investigation
A detailed SAR narrative gives law enforcement the who, what, when, where, and why needed to act on the report and build a case.
Under the BSA, what is the maximum civil penalty per violation for a willful violation of CTR reporting requirements?
Answer: $25,000
Willful violations of BSA reporting requirements can result in civil penalties of up to $25,000 per day per violation.
Which of the following scenarios would most likely NOT warrant a SAR filing?
Answer: A customer deposits $12,000 in cash and the transaction is automatically reported via CTR
A routine CTR-reportable cash deposit by itself, without additional suspicious indicators, does not automatically require a SAR filing.
What does the term 'layering' refer to in a money laundering scheme?
Answer: Creating complex transaction layers to distance funds from their criminal source
Layering is the second stage of money laundering, involving complex transactions such as wire transfers, currency conversions, and shell company movements to obscure the money trail.
A bank's BSA officer learns that an employee filed a SAR on a customer and then mentioned the filing to a colleague who told the customer. This violates:
Answer: The tipping off prohibition under 31 U.S.C. § 5318(g)(2)
31 U.S.C. § 5318(g)(2) prohibits any disclosure that a SAR has been filed or that information is being reported, and this chain of disclosure violates that prohibition.
A Politically Exposed Person (PEP) opens a new account at a bank. Under enhanced due diligence requirements, the bank should:
Answer: Conduct enhanced scrutiny of the source of funds and ongoing monitoring
PEPs require enhanced due diligence (EDD) including verification of source of wealth, purpose of the relationship, and heightened ongoing monitoring, but are not automatically refused or immediately reported.
Which of the following is a red flag for trade-based money laundering (TBML) that a fraud examiner should identify?
Answer: Over- or under-invoicing of goods or services in international trade
TBML often involves manipulating the price, quantity, or quality of international trade transactions, with over- or under-invoicing being a primary red flag.