The Financial Action Task Force (FATF) Recommendations slate that a financial institution s customer due diligence (COD) procedures should include continued monitoring of a customer's business relationships and transactions.

The Financial Action Task Force (FATF) Recommendations explicitly establish ongoing monitoring as a fundamental component of Customer Due Diligence (CDD). Recommendation 10 mandates that financial institutions conduct "ongoing due diligence on the business relationship." This process includes scrutinizing transactions to ensure they align with the institution's knowledge of the customer and their risk profile, as well as keeping customer identification data current. This continuous monitoring is essential for detecting unusual or suspicious activities that may indicate money laundering or terrorist financing.

B. False: This is incorrect. FATF Recommendation 10, a cornerstone of the international Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) framework, explicitly requires ongoing monitoring as part of the CDD process.

1. Financial Action Task Force (FATF). (2023). International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation – The FATF Recommendations. FATF/OECD. Recommendation 10, Customer Due Diligence, p. 13. "Financial institutions should be required to undertake the following customer due diligence (CDD) measures: ... (d) Conducting ongoing due diligence on the business relationship..." The Interpretive Note to Recommendation 10 further clarifies this includes scrutinizing transactions.

2. International Monetary Fund (IMF). (2023). Financial System Stability Assessment: Switzerland. IMF Country Report No. 23/299, p. 51. The report, in its technical analysis of FATF compliance, states, "The main preventive measures to be taken by financial institutions are customer due diligence (CDD) (R.10)... This includes ongoing monitoring of the business relationship."

3. Madinger, J. (2012). Money Laundering: A Guide for Criminal Investigators (3rd ed.). CRC Press. Chapter 5, "The International Response," p. 103. This academic text explains that under the FATF framework, "The fourth element of a CDD program is to conduct ongoing due diligence on the business relationship... This includes scrutinizing transactions undertaken throughout the course of the relationship to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer..."