Which reputations risk consequence could a financial entity face for violating AML laws?

• A. Loss of high-profile customers
• B. Seizure of assets
• C. Increased audit costs to monitor behavior
• D. Monetary penalties

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.
An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.
Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or "care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.
During the investigation, new suspicious patterns and trends related to check cashing are observed. The Fl decides to conduct a training to ensure that 1) the AML program is robust and 2) the training program is relevant and appropriate. Which parties should be trained on emerging trends and red flags? (Select Two.)

• A. Loan department
• B. Branch personnel
• C. Financial crimes investigation unit
• D. Senior management
• E. The board of directors

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The investigations team of a financial institution (Fl) wants to perform enhanced due diligence measures on operations done by a foreign bank related to transactions of companies that export scrap gold and silver. What would be the next best steps for the investigations team? (Select Two.)

• A. Ask the respondent bank if the exporting companies have obtained an official license that permits the exporting of scrap gold and silver.
• B. Ask the respondent bank if it has a risk rating for the exporting companies, if the customer profiles are updated, and if so. when was the last time it was done.
• C. Ask the respondent bank if it can file a SAR/STR in its jurisdiction since the investigations team also plans to do the same in the Fl's home country.
• D. Ask the business manager who handles the relationship of the respondent bank if they can persuade the bank to close the accounts of the export companies.
• E. Ask the legal department if it can proceed to rescind the contract of the correspondent banking relationship since the export of scrap gold and silver is a high-risk activity.

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The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.
As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.
The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.
After further review, the decision is made that transactions appear suspicious. Which are the next steps the investigator should take? (Select Two.)

• A. Provide additional information to the LE upon receiving a formal request.
• B. Contact local LE and advise them of the investigation details to help speed up the investigation and prosecution.
• C. Gather all the information that would be useful for law enforcement (LE) and recommend filing a SAR/STR
• D. Close the customer's accounts since the FIU is issuing a warrant to freeze the funds.
• E. Close the investigation as the FIU is already on this matter, and they will inform LE if needed.

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When writing or reviewing a SAR/STR, it is important to:

• A. ensure the narrative is kept to the point; easy to read; and addresses the who, what, when, where, why, and how.
• B. ensure that the narrative is detailed with all available information so that law enforcement can decide what is relevant.
• C. keep the introduction brief but ensure all relevant transactions, account numbers, and suspect names are listed in the conclusion summary.
• D. avoid mentioning suspect names in case it is seen by someone involved in criminal activity, effectively tipping them off.

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