Answer:
Ideally your institution would have an on-going monitoring process that would detect suspicious transactions within exempt accounts and prompt a review. If the annual review for suspicious activity is a manual process, then your institution will have to establish written guidelines and/or procedures to follow. These steps would include the timeframes used during the review and supporting documentation required in each exemption folder. Some suggestions include:
- Review a year's worth of cash activity (e.g. look for spikes in activity, unusual cash volumes, and compare levels to previous years). Sometimes these cash reports can be summarized by weekly or monthly activity.
- Explaining the nature of the business, size, number of locations, and reason for handling cash.
- Look at the last three months of statements for possible suspicious activity (e.g. kiting, several international wires, unusual ACH activity, change in balance). If suspicious activity is discovered, then you would go back further (six months to a year).
- Include copies of signature cards and any available business documents (e.g. articles of incorporation)
- Search the Internet for additional information (e.g. information on business, recent news articles, criminal history)
First published on BankersOnline.com 5/2/05
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