Which pillar of the BSA program focuses on policies, procedures, and processes to limit and control risks, including controls for filing CTRs and timely reporting of suspicious activity?

• A. Internal Controls
• B. Independent Testing
• C. Training
• D. Customer Due Diligence

Answer: (A)

Internal Controls establish and enforce the rules that limit and manage AML risk. This pillar covers the written policies, procedures, and processes that govern how the program operates, who is responsible for each task, and how activities are monitored and documented. It directly includes the controls needed for regulatory reporting, such as filing Currency Transaction Reports when large cash transactions occur and reporting suspicious activity in a timely manner. The aim is to create an auditable, consistent framework so actions are repeatable, responsibilities are clear, and there’s accountability if something goes wrong.

Independent testing is about checking that these controls are effective in practice, Training ensures staff know how to apply the procedures, and Customer Due Diligence focuses on identifying and assessing the risk of customers.