Accounting: Anti-money laundering forms

Questions & Answers
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Question 1:
According to CITATION FIN18 \l 1033 (FINRA, 2018), AML rules are designed to detect and institute a reporting structure on suspicious activities which include predicate offenses related to money laundering and terrorism funding. Such activities include securities fraud and market manipulation. Financial institutions have to institute a system which balances between over-compliance since it has high operational cost and under-compliance which can attract litigations.
Anti- money laundering forms
Suspicious Activity Report (SAR) – it is owned by Financial Crimes Enforcement Networks. (FinCEN). It is meant to flag any suspicious activities that is not ‘ordinary’ and cannot be captured outside the other reporting framework and there is sufficient information to show that the nature of activity involves some illegalities and or it is carried out in some shadowy manner.
Currency Transaction Report (CTR) - U.S banks are the enforcement agencies under KYB policy framework. This is a form that has to be filled by bank representatives after any client deposits or withdraws more than $10,000.
Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN 114) – it is operated by the IRS. It necessitates that U.S citizens with foreign financial accounts to report them to IRS if ‘highest aggregate value of all of the foreign accounts on any day in the tax year is over $10,000.’
Report of International Transportation of Currency or Monetary Instruments (CMIR) – under bank secrecy act it necessitates that anyone including banks themselves who transport, ship, mail money in cash in excess of $10,000 in or out of the country must fill the Report of International Transportation of Currency or Monetary Instruments (CMIR). This law is enforced by the customs and border protection agencies.
Blocked Properties Reporting Form (OFAC) – this form is enforced through the treasury department through the OFAC (office of foreign assets control). It is meant to enforce trade restrictions on targeted individuals and or organizations with whom they have been earmarked to be of special interest by the US governments over dealings related to drugs, terrorism etc.
Voluntary Form for Reporting Blocked Transactions (OFAC) - this form is enforced through the treasury department through the OFAC (office of foreign assets control). This form covers ‘any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by 31 CFR Chapter X.’
Voluntary Form for Reporting Rejected Transactions (OFAC) - this form is enforced through the treasury department through the OFAC (office of foreign assets control). This is filled by individuals and banks when a transaction has been flagged and rejected for any reason. This is primarily to detect fraud or cybersecurity related occurrences in the system.
Question 2:
Regulation S-P (17 CFR §248.30)
* This regulation necessitates all firms to have written policies which are structured in the best interest of the client to protect consumer information against cyber-attacks and other forms of unauthori...