What should a bank do when it receives a request from a customer to transfer funds to an individual in Iraq?
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A. B. C. D.B
When a bank receives a request from a customer to transfer funds to an individual in Iraq, it should take certain precautions to ensure compliance with applicable laws and regulations related to financial transactions. Specifically, the bank should consider the potential risks associated with the transaction and determine whether it complies with its own policies and procedures as well as with relevant regulatory requirements.
One of the primary considerations for banks when processing transactions to or from certain countries is compliance with the sanctions regulations administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury. OFAC maintains a list of individuals, organizations, and countries subject to economic and trade sanctions, known as the Specially Designated Nationals and Blocked Persons (SDN) List. The SDN List is designed to prevent U.S. persons from conducting transactions with individuals or entities that pose a threat to U.S. national security or foreign policy objectives.
In the case of a request to transfer funds to an individual in Iraq, the bank should first confirm whether the individual and the financial institution involved in the transaction are on the SDN List. If either the individual or the financial institution is listed on the SDN List, the bank must block the transaction and report it to OFAC. If neither party is listed on the SDN List, the bank can proceed with the transfer but must still comply with other applicable regulatory requirements related to customer due diligence, suspicious activity reporting, and other anti-money laundering measures.
In summary, the correct answer to the question of what a bank should do when it receives a request from a customer to transfer funds to an individual in Iraq is B. The bank should conduct the transfer if the individual and the financial institution are not on the SDN list, but must block the transfer and notify OFAC immediately if either party is listed on the SDN List.