Which are the two most common controls a financial institution (FI) uses to identify suspicious money-laundering activity? (Choose two.)

The two most fundamental and common controls financial institutions (FIs) use to identify potential money laundering are transaction monitoring and sanctions screening. Transaction monitoring systems use rules and scenarios to automatically flag unusual or suspicious patterns of activity that deviate from a customer's expected behavior. Sanctions screening is a mandatory control that checks customers and transactions against lists of prohibited individuals, entities, and jurisdictions maintained by governmental bodies like OFAC. Together, these controls form the cornerstone of an FI's proactive detection and reporting framework for suspicious financial activity.

B. Adverse media information: This is a key component of customer due diligence (CDD) and risk assessment, but it is generally used to understand a customer's risk profile rather than being a primary control for identifying suspicious activity in real-time.
C. Governmental subpoena: This is a legal demand for information received by the FI from a government agency. It is a reactive measure, not a proactive internal control used by the FI to identify suspicious activity.
D. Search warrant: This is a legal order authorizing law enforcement to conduct a search. Like a subpoena, it is an external legal process that the FI must respond to, not an internal control it uses for detection.

1. ACAMS CAMS6 Study Guide (6th Edition). Chapter 2, "Compliance Standards for Anti-Money Laundering and Combating the Financing of Terrorism." This chapter details the core components of an effective AML/CFT program, explicitly identifying transaction monitoring as the primary method for detecting unusual activity (Section 2.4.3) and sanctions screening as a critical compliance control (Section 2.5).

2. Financial Action Task Force (FATF). The FATF Recommendations: International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation. FATF, Paris, France, 2012 (updated 2023). Recommendation 10 (Customer Due Diligence) and its Interpretive Note emphasize ongoing monitoring of the business relationship, which includes scrutinizing transactions. Recommendation 6 covers targeted financial sanctions. These form the international basis for the controls in options A and E.

3. University of Manchester, School of Law. Courseware on International Financial Crime. The curriculum consistently presents transaction monitoring systems and sanctions compliance programs as the two main pillars of a financial institution's operational framework for detecting and preventing money laundering and terrorist financing.