CAMS-FCI practice question 25 of 25

During transaction monitoring. Bank A learns that one of its customers. Med Supplies 123, is attempting to make a payment via wire totaling 382.500…

Full set: 101 questions
During transaction monitoring. Bank A learns that one of its customers. Med Supplies 123, is attempting to make a payment via wire totaling 382.500 USD to PPE Business LLC located in Mexico to purchase a large order of personal protective equipment. specifically surgical masks and face shields. Upon further verification. Bank A decides to escalate and refers the case to investigators. Bank A notes that days prior to the above transaction, the same customer went to a Bank A location to wire 1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical masks and face shields from Chin a. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the purchase of these items, this time using a different vendor in China. The investigator must determine the next steps in the investigation and what actions, if any. should be taken against relevant parties. The investigator is gathering more information to determine if a SAR/STR filing is needed. Which steps are the correct ways of collecting the additional information? (Select Two.)
Answer options
A: Reach out to the relationship manager asking if more up-to-date customer due diligence information can be collected on the customer. Correct answer
B: Use available documentation received from law enforcement (e.g.. grand jury subpoena) as red flags in SAR/STR filing.
C: Reach out to the customer and ask for supporting documentation for the conducted wires to avoid SAR/STR filing.
D: Conduct open-source research to determine if the customer and involved counterparties are in the same business field. Correct answer
E: Issue a USA PATRIOT ACT Section 314(b) request to participating financial institutions advising that information is needed to decide if the activity is suspicious.
Correct Answer:
A. Reach out to the relationship manager asking if more up-to-date customer due diligence information can be collected on the customer.; D. Conduct open-source research to determine if the customer and involved counterparties are in the same business field.
Explanation

The initial steps of an investigation involve gathering information from both internal and external sources. Internally, consulting the relationship manager to update customer due diligence (CDD) information is crucial to reassess the customer's risk profile and expected activity. Externally, conducting open-source research on the customer and counterparties helps verify their legitimacy, identify adverse media, and understand the business rationale for the transactions. These steps are fundamental to building a comprehensive view of the activity before deciding whether a suspicious activity report (SAR/STR) is warranted.

Why Incorrect

B: The scenario does not mention law enforcement involvement; this is not a data collection step available to the investigator at this stage. C: The phrasing "to avoid SAR/STR filing" suggests a biased objective and creates a significant risk of tipping off the customer. E: While a valid tool, updating internal CDD and conducting open-source research are more foundational and universally applicable initial actions.

References

1. Financial Action Task Force (FATF). (2014, June). Guidance for a Risk-Based Approach for the Banking Sector. FATF/OECD. (See Section 3, paragraphs 3.6-3.8, which emphasize the importance of ongoing monitoring and keeping customer information up-to-date as part of the investigative and due diligence process).

2. Financial Crimes Enforcement Network (FinCEN). (2020, May 18). Advisory on Medical Scams Related to the Coronavirus Disease 2019 (COVID-19). FIN-2020-A002. (This advisory encourages FIs to use "all sources of information," including open-source intelligence, to identify and report suspicious activity, which is a core investigative step).

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