Typical Events to Identify and Investigate Potential AML Activities

ADE

The three typical events to identify and investigate potential Anti-Money Laundering (AML) activities are as follows:

1. A. Blocked transactions involving individuals included in the OFAC SDN list: One important aspect of AML compliance is to prevent transactions involving individuals or entities that are included in the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list. The OFAC SDN list comprises individuals and organizations who are sanctioned by the U.S. government for various reasons, including involvement in money laundering, terrorism, or other illicit activities. When a financial institution identifies a transaction involving an individual on the SDN list, it is required to block the transaction and report it as a potential AML activity.

2. C. Internal tips from employees of the bank about potential suspicious activity: Employees of a bank or financial institution often have access to valuable information and insights that can help in identifying potential suspicious activity. They may come across unusual or suspicious transactions, customer behavior, or other red flags during their regular job duties. Internal tips from employees serve as an important source of information for initiating investigations into potential AML activities. Whistleblower protections and internal reporting mechanisms encourage employees to report their concerns without fear of retaliation.

3. E. Alerts triggered by the automated AML monitoring system: Financial institutions employ automated AML monitoring systems to detect patterns, anomalies, and suspicious transactions. These systems use various algorithms and rules to analyze large volumes of financial data and generate alerts when potential AML activities are identified. Alerts can be triggered by specific transaction patterns, thresholds, or predefined risk indicators. Once an alert is generated, it requires further investigation to determine if the flagged activity is indeed suspicious and warrants reporting to the appropriate authorities.

While all the options provided may have some relevance to AML activities, the three choices above are the most directly associated with identifying and investigating potential money laundering activities. The blocked transactions involving individuals on the OFAC SDN list help prevent illicit funds from being transferred. Internal tips from employees provide insider information on suspicious activities, while alerts triggered by automated AML monitoring systems enable the detection of potential money laundering patterns or transactions.