Upon receipt of a law enforcement or government request about a customer, a financial institution (FI) should immediately perform which task?
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A. B. C. D.D
The correct answer to this question is B: File a suspicious activity report or suspicious transaction report.
When a financial institution (FI) receives a request from law enforcement or government about a customer, it is crucial for the institution to act quickly and follow the appropriate protocols. Failing to do so may result in serious legal and reputational consequences.
The FI should first verify the identity of the requester and the legitimacy of the request. Once confirmed, the FI should immediately file a suspicious activity report (SAR) or suspicious transaction report (STR) with the relevant regulatory authorities. SAR/STR is a critical tool used by law enforcement agencies to detect and investigate money laundering and other financial crimes. The report provides details about the suspicious activity or transaction, the parties involved, and any supporting evidence, such as account statements, transaction records, and customer due diligence information.
It is not appropriate to notify the board of directors that the customer is currently under investigation, as this may compromise the investigation and potentially alert the customer. Contacting the customer to inform them of the request is also not recommended, as it may raise suspicion and jeopardize the integrity of the investigation.
Reviewing the account activity for the customer to determine their overall risk is a good practice, but it should not be the immediate action taken upon receiving a request from law enforcement or government. The FI should focus on complying with the regulatory requirements and providing the necessary information to the authorities to assist in the investigation.
In summary, the FI should promptly file a SAR/STR upon receipt of a law enforcement or government request about a customer to ensure compliance with anti-money laundering (AML) regulations and assist in the investigation of financial crimes.