This potential action is authorized by Section 319 of the USA PATRIOT ACT, which allows the U.S.
government to seize funds from a foreign bank's correspondent account in the U.S. if the foreign bank refuses to cooperate with a request for records relating to an investigation of money laundering or terrorist financing.
The U.S. government can seize an amount equal to the funds in the account of the target of the investigation, regardless of whether those funds are actually in the correspondent account. In this case, the U.S. government can seize $1 million from Bank A's correspondent account in the U.S. because Bank A holds $1 million in the account of the WTS, which is the target of the forfeiture action.
The other potential actions are not authorized by the USA PATRIOT ACT or other U.S. laws. The U.S.
government cannot seize Bank A's entire $5 million correspondent account in the U.S. because that would exceed the amount in the WTS's account and would violate the principle of proportionality. The U.S.
government cannot seize the WTS's $1 million account at the non-U.S. branch of Bank A because that would require the cooperation of the foreign jurisdiction where the branch is located, which may not be forthcoming.
The U.S. government cannot seize $5 million from the non-U.S. branch of Bank A where the WTS's account is located because that would also require the cooperation of the foreign jurisdiction and would exceed the amount in the WTS's account.
References:
* CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: International Standards and Global Initiatives, pp. 67-68
* CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Study Guide, pp. 54-55
* How Does the Patriot Act Affect Criminal Investigations? | Nolo, Section 319: Forfeiture of Funds in United States Interbank Accounts
* The USA PATRIOT Act at 20: Sneak and Peek Searches - CRS Reports, Section 319: Forfeiture of Funds in United States Interbank Accounts

Explanation/Reference:
References:
https://docs.microsoft.com/en-us/azure/architecture/data-guide/technology-choices/data-storage

Structuring is the intentional evasion of a reporting or recordkeeping requirement by breaking down a large transaction into smaller ones, or by using multiple accounts, institutions, or persons to avoid triggering the threshold for reporting or recordkeeping. Structuring is also known as smurfing, and it is a common technique used by money launderers to conceal the source, ownership, or control of illicit funds.
References:
ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 2, Section 2.1.1, page 511 ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.1, video time 7:00-8:002 ACAMS CAMS Certification Practice Exam, Question 134, page 2853

Explanation
U.S. law requires that assets and accounts of an OFAC-specified country, entity, or individual be blocked when such property is located in the United States, is held by U.S. individuals or entities, or comes into the possession or control of U.S. individuals or entities.
For example, if a funds transfer comes from offshore and is being routed through a U.S. bank to an offshore bank, and there is an OFAC-designated party to the transaction, it must be blocked. The definition of assets and property is broad and is specifically defined within each sanction program.
Assets and property includes anything of direct, indirect, present, future, or contingent value (including all types of bank transactions). Banks must block transactions that:
* Are by or on behalf of a blocked individual or entity;
* Are to or go through a blocked entity; or
* Are in connection with a transaction in which a blocked individual or entity has an interest.