CAMS · Question #906
A compliance officer at a financial institution has completed an investigation into a high-risk customer's activities and determined that there are strong indications of money laundering. The…
The correct answer is A. Escalate the matter to the institution's high-risk client committee, presenting the investigation. In situations involving significant AML concerns, especially with high-risk clients, thecompliance officer must follow proper escalation procedureswithin the institution. The appropriate course of action is toescalate the matter to a senior governance body, such as ahigh-risk…
Question
A compliance officer at a financial institution has completed an investigation into a high-risk customer's activities and determined that there are strong indications of money laundering. The compliance officer has documented their findings and is ready to recommend offboarding the customer. However, the relationship manager responsible for the customer is resistant to the idea, citing the customer's significant revenue contribution to the institution. What should the compliance officer do next to ensure the appropriate escalation and decision- making process is followed?
Options
- AEscalate the matter to the institution's high-risk client committee, presenting the investigation
- BProceed with offboarding the customer unilaterally based on their investigation findings and anti-
- CAttempt to persuade the relationship manager to agree with the offboarding recommendation by
- DDelay the offboarding decision and continue monitoring the customer's activities, waiting for
How the community answered
(27 responses)- A70% (19)
- B11% (3)
- C4% (1)
- D15% (4)
Explanation
In situations involving significant AML concerns, especially with high-risk clients, thecompliance officer must follow proper escalation procedureswithin the institution. The appropriate course of action is toescalate the matter to a senior governance body, such as ahigh-risk client committee, which is typically tasked with balancing AML risk against business considerations. Unilateral offboarding (Option B)may violate internal protocols. Persuading the relationship manager (Option C)bypasses formal governance. Delaying action (Option D)risks further exposure to regulatory or reputational damage. This escalation ensuresdocumented risk-based decision-makingand demonstrates to regulators that the institution appliesstructured and objective AML governance.
Topics
Community Discussion
No community discussion yet for this question.