CAMS · Question #559
A school teacher recently opened a private banking account with a major bank. The customer indicated annual income of EUR 45,000 and listed her source of wealth as a EUR 1.5 million inheritance from r
The correct answer is B. Contact the competent authority and local law enforcement.. The customer's profile and transactions are highly suspicious and indicative of possible money laundering. The customer's income, source of wealth, and investment plans do not match with the large and frequent transfers from a diamond distributor, which is a high-risk business se
Question
A school teacher recently opened a private banking account with a major bank. The customer indicated annual income of EUR 45,000 and listed her source of wealth as a EUR 1.5 million inheritance from relatives. The customer plans to invest EUR 12,000 to 15,000 earned annually from bearer bonds. The relationship manager verified the client's identity and documented all of the above information in the account file before opening the account. During a routine review of the account, several electronic fund transfers in excess of EUR 5 million each were made from a diamond distributor. The relationship manager also noticed that in each instance, the customer immediately transferred the funds to bank accounts in Hong Kong. Which of the following is appropriate for the anti-money laundering specialist to recommend?
Options
- AArrange a meeting between the customer and legal department.
- BContact the competent authority and local law enforcement.
- CSuspend further customer transactions through the bank.
- DInvestigate the source and purpose of the transactions.
How the community answered
(33 responses)- A3% (1)
- B85% (28)
- C3% (1)
- D9% (3)
Explanation
The customer's profile and transactions are highly suspicious and indicative of possible money laundering. The customer's income, source of wealth, and investment plans do not match with the large and frequent transfers from a diamond distributor, which is a high-risk business sector for money laundering. The customer's transfers to Hong Kong, which is a high-risk jurisdiction for money laundering, also raise red flags. The anti-money laundering specialist should recommend contacting the competent authority and local law enforcement to report the suspicious activity and cooperate with any investigation. This is in accordance with the FATF Recommendation 20, which states that "If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, by law, to report promptly its suspicions to the financial intelligence unit (FIU)". The other options are not appropriate, as they do not address the urgency and severity of the
Topics
Community Discussion
No community discussion yet for this question.