Which of the following is NOT a requirement for a payroll customer under Phase II designation?

The correct response highlights that maintaining an account for a minimum of 6 months is not a requirement for a payroll customer under the Phase II designation. In the context of the Bank Secrecy Act (BSA) regulations, Phase II designations involve specific conditions aimed at identifying higher-risk customers and monitoring their activities. While knowing your customer and their transactional patterns is essential, having a minimum account maintenance period is not explicitly outlined in the regulations for payroll customers.

In the case of the other criteria:

• The requirement to withdraw more than $10,000 to pay employees is relevant since payroll transactions can trigger reporting obligations due to the large cash amounts involved.

• Being incorporated under US law ensures that the institution is dealing with legitimate businesses, which is critical in mitigating risks related to fraud and money laundering.

• Conducting regular transactions in currency pertains to monitoring the flow of cash through the payroll accounts, which helps in distinguishing between normal business operations and unusual activity patterns that may suggest illicit behavior.

Overall, it's the nature of payroll transactions and their associated risks that drive the compliance requirements, rather than a fixed minimum account duration, which is why the maintenance of an account for 6 months is not a mandated criterion in this context.