Treasury Enforcement Agent Exam Regulatory Frameworks & Compliance 2 — Questions and Answers
Question 1: Under the Bank Secrecy Act (BSA), what is the threshold amount that triggers a Currency Transaction Report (CTR) filing requirement?
- $5,000
- $10,000 (Correct answer)
- $25,000
- $50,000
Correct answer: $10,000
The BSA requires financial institutions to file a CTR for any cash transaction exceeding $10,000 in a single business day.
Question 2: Which federal agency has primary enforcement authority over the Office of Foreign Assets Control (OFAC) sanctions programs?
- FBI
- Department of State
- Department of the Treasury (Correct answer)
- Department of Homeland Security
Correct answer: Department of the Treasury
OFAC is an office within the U.S. Department of the Treasury and operates under Treasury's enforcement authority.
Question 3: A financial institution suspects a customer is structuring cash deposits to avoid CTR reporting. Under the BSA, what must the institution file?
- A Currency Transaction Report (CTR)
- A Suspicious Activity Report (SAR) (Correct answer)
- A Foreign Bank Account Report (FBAR)
- A FinCEN 8300 form
Correct answer: A Suspicious Activity Report (SAR)
Structuring is a crime under 31 U.S.C. § 5324, and suspected structuring must be reported via a Suspicious Activity Report (SAR).
Question 4: The USA PATRIOT Act Section 314(a) requires financial institutions to do what upon receiving a request from FinCEN?
- Freeze all accounts immediately
- Search their records for accounts or transactions matching named suspects (Correct answer)
- Report all foreign wire transfers
- Terminate accounts of flagged customers
Correct answer: Search their records for accounts or transactions matching named suspects
Section 314(a) allows law enforcement to request that financial institutions search their records for accounts or transactions linked to suspects within two weeks.
Question 5: Which of the following best describes 'layering' in the context of money laundering?
- Placing illegal proceeds into the financial system
- Moving funds through complex transactions to disguise their origin (Correct answer)
- Using shell companies to invest laundered funds in legitimate businesses
- Structuring deposits to avoid reporting thresholds
Correct answer: Moving funds through complex transactions to disguise their origin
Layering is the second stage of money laundering, involving complex financial transactions to obscure the trail of illegal funds.
Question 6: Under the Customer Identification Program (CIP) rule, banks must verify the identity of customers opening new accounts. Which of the following is NOT a required identifying element for individual customers?
- Name
- Date of birth
- Address
- Credit score (Correct answer)
Correct answer: Credit score
CIP requires name, date of birth, address, and an identification number (e.g., SSN) — credit score is not a required element.
Question 7: Which federal law prohibits U.S. persons from engaging in transactions with individuals or entities on the Specially Designated Nationals (SDN) list?
- Bank Secrecy Act
- Foreign Corrupt Practices Act
- OFAC Regulations under the International Emergency Economic Powers Act (Correct answer)
- Anti-Money Laundering Act of 2020
Correct answer: OFAC Regulations under the International Emergency Economic Powers Act
OFAC administers and enforces economic sanctions based primarily on authority derived from IEEPA, prohibiting transactions with SDN-listed parties.
Treasury Enforcement Agent Exam Regulatory Frameworks & Compliance 2
Under the Bank Secrecy Act (BSA), what is the threshold amount that triggers a Currency Transaction Report (CTR) filing requirement?