Escalating a Politically Exposed Person (PEP) Account
Question
A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official. Recently a negative news search revealed political corruption in the home country of the official.
To whom should this situation be escalated?
Answers
Explanations
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A. B. C. D.C
The situation described in the question raises concerns about the possibility of money laundering through the account of a politically exposed person (PEP). Therefore, the bank should follow its established policies and procedures for reporting suspicious activities to the appropriate internal and external parties.
In this case, the suspicious transaction report (STR) was already filed by the money laundering analyst. However, the recent negative news search revealing political corruption in the home country of the official adds more complexity to the situation and raises the question of whether the bank needs to escalate the matter further.
The answer to this question is option C, the bank's anti-money laundering officer. This is because the AML officer is responsible for overseeing the bank's AML compliance program and ensuring that it is effective in detecting and preventing money laundering and terrorist financing. Therefore, the AML officer is the appropriate person to escalate the situation to.
The AML officer can assess the risk of the situation and determine whether it is necessary to file a suspicious activity report (SAR) with the appropriate regulatory authorities. If a SAR is filed, the AML officer will work with law enforcement and regulatory authorities to investigate the matter further and take appropriate action to mitigate the risk.
The board of directors (option A) and the line of business executive (option B) may not have the expertise or knowledge necessary to make informed decisions about AML matters. They may also be removed from the day-to-day operations of the bank's AML compliance program. Therefore, the AML officer is the appropriate person to handle this situation.
Option D, the Financial Action Task Force's PEP Hotline, is an external resource that can be used to report PEP-related concerns to the appropriate authorities. However, it is not the first point of escalation in this situation. The bank's AML officer should be notified first, and they can then determine whether it is necessary to report the matter to the appropriate authorities, including the FATF's PEP Hotline.
