Elements Triggering a Review of Existing Relationship

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During the account opening process, financial institutions need to gather information about their customers and perform various checks to ensure compliance with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. In some cases, the institution may also need to review the existing relationship with the customer. The following are the two elements that can trigger a review of the existing relationship during the opening of a new account:

A. Incoming transfers from high-risk jurisdictions: If the institution detects incoming transfers from high-risk jurisdictions, it may trigger a review of the existing relationship with the customer. High-risk jurisdictions are countries or regions that have a higher risk of money laundering or terrorist financing activities. Examples of high-risk jurisdictions include countries that have weak AML/CFT laws and regulations or are subject to sanctions by international organizations. A review of the existing relationship with the customer may help the institution assess the source of funds and whether there are any red flags that warrant further investigation.

B. A false positive result for name screening: Financial institutions are required to screen their customers against sanctions and other watchlists to identify individuals or entities that are prohibited from accessing the financial system. If a customer's name matches an individual or entity on a watchlist, it may trigger a false positive result. In this case, the institution may need to conduct additional due diligence to verify whether the customer is indeed a sanctioned individual or entity. If the customer is not on the watchlist, the institution may need to review the existing relationship with the customer to determine whether there are any other red flags that need to be addressed.

C. Regular checks on the flow of funds: Regular checks on the flow of funds can help institutions detect unusual transactions or patterns that may indicate money laundering or terrorist financing activities. However, regular checks on the flow of funds are not typically performed during the account opening process, but rather as part of the institution's ongoing monitoring of the customer relationship.

D. Estimated total income decrease: A decrease in a customer's estimated total income would not typically trigger a review of the existing relationship during the account opening process. However, a decrease in income may be a red flag that requires further investigation during the institution's ongoing monitoring of the customer relationship.

E. Recent adverse media on the client: Recent adverse media on the client may indicate that the customer is involved in illegal or unethical activities. However, adverse media alone may not be sufficient to trigger a review of the existing relationship during the account opening process. Instead, adverse media may be considered as part of the institution's ongoing monitoring of the customer relationship.