When investigating unusual transactions, financial institutions must focus on data-driven risk assessment and internal review first.
Option A (Correct): Assessing business ownership and control structures helps determine if multiple businesses are connected through hidden links (e.g., shell companies or common ownership).
Option C (Correct): The account manager may provide valuable insight on whether the customer's activity aligns with their expected profile.
Option B (Incorrect): Law enforcement should only be contacted after internal review confirms suspicious activity.
Option D (Incorrect): Declining transactions without thorough investigation could lead to missed SAR filings or improper risk assessment.
Option E (Incorrect): Social media is not a reliable investigative tool for AML casework.
Key Red Flags in Business AML Investigations:
Frequent transactions between businesses with no clear commercial relationship.
Ownership structures that obscure beneficial owners.
Rapid movement of funds through multiple accounts without economic justification.
Best Practices for Investigating Complex Cases:
Verify ownership and control through official company registries.
Conduct negative news screening and PEP/sanctions screening.
Request supporting documentation from the customer.
Reference:
FATF Recommendation 10 (Customer Due Diligence)
Wolfsberg Group Guidance on Transaction Monitoring and Investigations
FinCEN Red Flags for Business Money Laundering Investigations