Which scenario best justifies why a financial institution (FI) might close a customer's account?

The correct answer is C. The customer uses a shipping company dealing with specially designated nationals (SDNs). Financial institutions must close accounts that violate sanctions laws or pose a severe AML risk. Option C (Correct): Doing business with Specially Designated Nationals (SDNs) violates U.S. OFAC and EU sanctions, requiring account closure.

AML/CFT Compliance Programs

Question

Options

AThe account has transactions that triggered multiple Suspicious Activity Reports (SARs).
BThe account shows periodic fixed amount remittances for tuition fees.
CThe customer uses a shipping company dealing with specially designated nationals (SDNs).
DThe customer is the object of a civil subpoena.

How the community answered

(20 responses)

A
15% (3)
B
5% (1)
C
75% (15)
D
5% (1)

Explanation

Financial institutions must close accounts that violate sanctions laws or pose a severe AML risk. Option C (Correct): Doing business with Specially Designated Nationals (SDNs) violates U.S. OFAC and EU sanctions, requiring account closure.

Topics

#account closure#SDN screening#sanctions compliance#risk-based decisions

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