CAMS-FCI practice question 6 of 25

SAR/STR NARRATIVE A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank. Client…

Full set: 101 questions
SAR/STR NARRATIVE A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank. Client Information: Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North Americ a. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors. Beneficiary Information: As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for the purchase of property in another country. Payment Reference: ABCXXXXX31PZFG2H ABCXXXXXX51PQGEH ABCXXXXXX214QWVG ABCXXXXXX41PSXA2 ABCXXXXXX815QWS3 Concerns: • We are unsure about the country of incorporation of the beneficiaries. • We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion. • There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds. • Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds. • The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in real estate business which again poses a higher risk. When drafting the SAR/STR narrative, the investigator notes several payment references. What additional information should the investigator include in the narrative?
Answer options
A: The investigator's concerns based on their subjective opinion
B: The suspicious accounts and transactions identified Correct answer
C: All relevant tables, spreadsheets, and other supporting documentation
D: Personal tax records pertinent to the owners to indicate tax evasion
Correct Answer:
B. The suspicious accounts and transactions identified
Explanation

A Suspicious Activity Report/Suspicious Transaction Report (SAR/STR) narrative must be a concise and chronological summary of the suspicious activity. Its primary purpose is to provide law enforcement with sufficient information to understand the "who, what, when, where, why, and how" of the matter. Therefore, the narrative must clearly identify the suspicious accounts and the specific transactions (including dates, amounts, and counterparties) that form the basis for the suspicion. The payment references noted by the investigator are part of this transactional detail that must be included and explained.

Why Incorrect

A. SAR/STR narratives must be based on objective facts and logical inferences from those facts, not the investigator's subjective or unsupported personal opinions.
C. The narrative should summarize key information. While supporting documentation is maintained internally, attaching all of it to the SAR/STR is generally not required or practical.
D. A bank investigator would not have access to personal tax records and including them would be improper. Suspicion of tax evasion is reported, not proven with confidential records.

References

1. ACAMS CAMS6-EN Study Guide, (2020). Chapter 4, Section: "Elements of a Good SAR/STR," pp. 271-272. This section explicitly states that a good narrative should identify the essential elements of the suspicious activity (the "who, what, when, where, why, and how") and provide a detailed explanation of the transactions.

2. Financial Crimes Enforcement Network (FinCEN). (2019). SAR Quality Fact Sheet. This document emphasizes the importance of a well-written narrative that is "concise, accurate, and logical" and provides a "chronological and complete account of the suspicious activity." It specifies including transaction details.

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