The customer's profile and transactions are highly suspicious and indicative of possible money laundering.
The customer's income, source of wealth, and investment plans do not match with the large and frequent transfers from a diamond distributor, which is a high-risk business sector for money laundering. The customer's transfers to Hong Kong, which is a high-risk jurisdiction for money laundering, also raise red flags.
The anti-money laundering specialist should recommend contacting the competent authority and local law enforcement to report the suspicious activity and cooperate with any investigation. This is in accordance with the FATF Recommendation 20, which states that "If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, by law, to report promptly its suspicions to the financial intelligence unit (FIU)"1. The other options are not appropriate, as they do not address the urgency and severity of the situation.
References: 1: FATF (2012), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, FATF, Paris, France, www.fatf-gafi.org/recommendations.html, p. 19.