Preventing Money Laundering through Effective Response Strategies

C

The correct answer is C. Conduct further investigation to determine whether this is truly suspicious activity.

Explanation:

In this scenario, the compliance officer has noticed that several customers of a money transmitter are each remitting the same amount of money but much more frequently. This behavior could potentially be indicative of suspicious activity, but it is important to conduct further investigation before making any conclusions or taking any actions.

Option A, filing a suspicious transaction report (STR), is a common action taken by financial institutions when they suspect that a transaction or activity may be related to money laundering, terrorist financing, or other criminal activity. However, an STR should only be filed after conducting an appropriate level of investigation and determining that there are reasonable grounds to suspect that the activity is suspicious.

Option B, instructing the tellers not to process remittances for these customers in the future, is a drastic action that may be warranted if the investigation ultimately reveals that the customers are engaging in suspicious activity. However, this action should only be taken after a thorough investigation and consultation with senior management and legal counsel.

Option D, immediately contacting the customers and asking them why they are remitting money more often, could potentially tip off the customers and compromise the investigation. This action should only be taken as part of a coordinated approach to investigating suspicious activity, and it should be done in consultation with senior management and legal counsel.

Therefore, the best course of action in this scenario is to conduct further investigation to determine whether the activity is truly suspicious. The investigation should include gathering additional information about the customers, their businesses, and the purpose of the remittances, as well as reviewing the transactions in the context of other relevant factors, such as the customers' transaction history, source of funds, and destination of funds. The investigation should also consider whether the customers have any known links to high-risk countries, politically exposed persons (PEPs), or other individuals or entities that may pose a higher risk for money laundering or terrorist financing. Based on the results of the investigation, the institution can then determine whether an STR should be filed, whether additional monitoring or due diligence is necessary, or whether other actions should be taken.