Determine Activity Reporting: Compliance Officer's Guide

BD

The compliance officer has received a report from the institution's monitoring system that has identified an account with multiple alerts for cash deposits and international wires. The compliance officer must now determine whether this activity should be reported. To make this determination, the officer will need to refer to certain sources of information held within the institution.

Two sources of information that will enable the compliance officer to determine whether the activity should be reported are:

B. The customer due diligence information on file D. Transaction records for the period during which the unusual activity occurred

Explanation:

B. The customer due diligence (CDD) information on file: The CDD information contains details about the customer, their business activities, source of funds, and transactions conducted. The CDD information can help the compliance officer determine the legitimacy of the customer's activities and if they are consistent with the customer's business profile. For instance, if the customer is a small business owner and the amount of cash deposits and international wires exceeds their regular business profile, then this could raise suspicions of money laundering or terrorist financing.

D. Transaction records for the period during which the unusual activity occurred: Transaction records provide the compliance officer with details of the actual transactions conducted by the customer. These records can help the officer determine the source of funds for the cash deposits and the beneficiaries of the international wires. If the transaction records show that the cash deposits were made in a manner inconsistent with the customer's regular business profile or that the international wires were sent to countries or entities associated with high-risk activities, then this could raise suspicions of money laundering or terrorist financing.

A. The signature card for the account: The signature card contains the account holder's signature and other identification details. While it may provide useful information about the account holder, it is unlikely to assist the compliance officer in determining whether the activity should be reported.

C. The monitoring system parameters for identifying unusual activity: The monitoring system parameters can assist the compliance officer in identifying unusual activity, but they are unlikely to provide sufficient information to determine whether the activity should be reported.

In conclusion, the compliance officer should refer to the customer due diligence information on file and the transaction records for the period during which the unusual activity occurred to determine whether the activity should be reported.