CAMS-FCI practice question 18 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. While reviewing the account activity, it is noted that several transfers are sent to a company located in an offshore jurisdiction. Which step should the investigator take next?
Answer options
A: Request information from the company.
B: File a SAR/STR to the FIU where the company is located.
C: Request information about the beneficiaries related to the company.
D: Conduct an open-source search to determine the ownership and registration of the company. Correct answer
Correct Answer:
D. Conduct an open-source search to determine the ownership and registration of the company.
Explanation

When an investigator identifies a new, unknown entity involved in suspicious transactions, such as a company in an offshore jurisdiction, the most logical and immediate next step is to gather preliminary intelligence. Conducting an open-source search (OSINT) is a fundamental investigative technique that is non-intrusive and can quickly provide context about the company's legitimacy, registration, and potential ownership structure from public records, media reports, and other online sources. This initial research helps the investigator build a more complete picture before taking further actions like making formal requests for information, which can be time-consuming.

Why Incorrect

A. Requesting information directly from the company is improper; the financial institution should direct inquiries to its own customer (the correspondent bank), not a third party.
B. Filing a SAR/STR in another jurisdiction is premature. The investigator must first gather sufficient information to understand the activity and articulate the suspicion.
C. While requesting beneficiary information is a valid step, it typically follows initial, less intrusive research like an open-source search to first gather available intelligence.

References

1. ACAMS CAMS6-EN Study Guide, (2020). Chapter 4, Section: "Conducting the Investigation," pp. 258-260. This section details the investigative process, including the use of public sources and the internet as key tools for gathering information on subjects of an investigation.

2. Financial Action Task Force (FATF). (2020). FATF Recommendations. Recommendation 10 (Customer Due Diligence), Interpretive Note, para. 15. This note emphasizes ongoing due diligence on the business relationship, which includes scrutinizing transactions to ensure they are consistent with the institution's knowledge of the customer, their business, and risk profile. OSINT is a primary method for such scrutiny.

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