Understanding FATF Standards for SARs/STRs Information Sharing

A

The correct answer is C. Financial institutions (FIs) should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.

The Financial Action Task Force (FATF) is an international organization that sets global standards for anti-money laundering and counter-terrorism financing (AML/CFT). In 2012, the FATF released a set of recommendations for the exchange of information within a financial group relating to suspicious activity reports/transactions (SARs/STRs).

Under the FATF standards, financial institutions (FIs) are encouraged to share information relating to SARs/STRs within their group to facilitate more effective AML/CFT efforts. However, FIs must establish sufficient safeguards to ensure that the confidentiality of the information shared is protected.

This means that FIs should have policies and procedures in place to ensure that information shared is only used for legitimate AML/CFT purposes and is not disclosed to unauthorized parties. Additionally, FIs must ensure that their staff members are trained on the importance of confidentiality and are aware of the consequences of breaching confidentiality.

Option A is incorrect because the FATF recommendations do not specify a specific retention period for SARs/STRs and supporting documentation. Rather, FIs should retain this information for a period of time that is consistent with applicable laws and regulations.

Option B is incorrect because FIs are permitted to share customer information for AML/CFT purposes, subject to appropriate safeguards being in place.

Option D is incorrect because the FATF recommendations do not require FIs to obtain regulatory approval before sharing SARs/STRs information within a financial group. However, FIs must comply with any applicable laws and regulations that govern the sharing of such information.