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Question 247

ACME Bank is a $600 million institution with 15 branches within three counties. Because of its proximity to Mexico, the bank has many foreign national customers and makes many foreign wire transfers for its customers. Currently the bank's branch managers print the OFAC list of SDNs and place them in strategic places in each branch. The wire transfer department keeps its own copy of the list. The compliance officer has implemented an annual auditing program to check the bank's compliance with OFAC regulations. The findings of this audit are provided to the bank's board of directors annually. The bank's regulatory agency has indicated to management that the bank has a high risk for BSA/AML/OFAC compliance. Of the following actions, which would be the most effective to strengthen the bank's

OFAC compliance?

    Correct Answer: B

    Given the bank's high risk for BSA/AML/OFAC compliance, purchasing and implementing interdiction software for the wire transfer area would be the most effective action to strengthen the bank's OFAC compliance. Interdiction software can automatically screen transactions in real-time against the OFAC list and other watchlists, significantly improving the accuracy and efficiency of compliance efforts. This reduces the likelihood of human error and ensures that transactions are checked against the most current lists, providing a more robust compliance mechanism compared to periodic audits, daily manual checks, or sharing transaction information with federal agencies.

Discussion
Cam22Option: B

Interdiction software is specifically designed to screen transactions in real-time against OFAC and other watchlists. Given the bank's high-risk profile for BSA/AML/OFAC compliance, implementing interdiction software would significantly enhance its ability to detect and prevent prohibited transactions. This software can automate the screening process, reducing the risk of human error and ensuring that all transactions are thoroughly screened against the most up-to-date watchlists. While conducting compliance audits twice a year (option A) and requiring the BSA officer to check the OFAC website daily for changes (option C) are beneficial practices, they may not provide the same level of efficiency and accuracy as interdiction software. Similarly, routinely providing account transaction information to federal security agencies (option D) could be useful for detecting suspicious patterns but might not directly address OFAC compliance concerns as effectively as interdiction software tailored for that purpose.