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CAMS · Question #672

An international bank is investigating a payment requested by a correspondent banking partner. The payment originated from a corporation located in Hong Kong, and the final beneficiary is an…

The correct answer is B. Confirm that neither the beneficiary nor the originator are sanctioned parties. C. Request supporting documents, including invoices and contracts, to confirm the purpose of the D. Check for negative news in public sources on the sender and receiver. When investigating a potentially suspicious cross-border payment, a financial institution should follow risk-based due diligence procedures. Option B (Correct): Sanctions screening is critical to ensure the originator or beneficiary is not listed on OFAC, EU, UN, or other…

Conducting and Responding to Investigations

Question

An international bank is investigating a payment requested by a correspondent banking partner. The payment originated from a corporation located in Hong Kong, and the final beneficiary is an individual in New York. The transaction triggered an alert in the bank's automated transaction monitoring system. Which steps should the bank take first to address the alert? (Select Three.)

Options

  • ACall the receiving individual to review identity verification documents.
  • BConfirm that neither the beneficiary nor the originator are sanctioned parties.
  • CRequest supporting documents, including invoices and contracts, to confirm the purpose of the
  • DCheck for negative news in public sources on the sender and receiver.
  • ESend a 314(b) request to the corporation's bank in Hong Kong.

How the community answered

(36 responses)
  • A
    17% (6)
  • B
    75% (27)
  • E
    8% (3)

Explanation

When investigating a potentially suspicious cross-border payment, a financial institution should follow risk-based due diligence procedures. Option B (Correct): Sanctions screening is critical to ensure the originator or beneficiary is not listed on OFAC, EU, UN, or other sanctions lists. Option C (Correct): Requesting supporting documents (e.g., invoices, contracts) helps determine whether the transaction is consistent with the customer's profile. Option D (Correct): Conducting negative news (adverse media) checks helps identify financial crime risks, such as fraud or money laundering.

Topics

#transaction monitoring#correspondent banking#sanctions screening#alert investigation

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