What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)
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A. B. C. D.BC
The Wolfsberg Principles are a set of global anti-money laundering (AML) guidelines developed by an association of international banks to promote effective AML measures and risk management in the financial industry. When it comes to monitoring and reporting suspicious activity for correspondent banking, two requirements outlined in the Wolfsberg Principles are:
A. Incorporate suspicious activity monitoring into periodic reviews: According to the Wolfsberg Principles, correspondent banks should incorporate suspicious activity monitoring as part of their periodic reviews. Periodic reviews refer to the ongoing assessment and evaluation of correspondent banking relationships to ensure compliance with AML and other regulatory requirements. By integrating suspicious activity monitoring into these reviews, correspondent banks can actively identify and assess any potential suspicious transactions or patterns. This requirement emphasizes the importance of continuously monitoring transactions and customer behavior to detect and prevent money laundering and other illicit activities.
B. Incorporate due diligence results such as customer risk ratings: Another requirement for monitoring and reporting suspicious activity in correspondent banking, as per the Wolfsberg Principles, is the incorporation of due diligence results, including customer risk ratings. Due diligence is the process of collecting and verifying information about customers, their business activities, and associated risks. Correspondent banks are expected to perform thorough due diligence on their customers and assign risk ratings based on the level of risk they pose. These risk ratings help in assessing the likelihood of suspicious activity and aid in prioritizing monitoring efforts. By incorporating customer risk ratings into their monitoring processes, correspondent banks can focus their resources on high-risk customers and transactions.
To summarize, the two requirements for monitoring and reporting suspicious activity for correspondent banking, as outlined by the Wolfsberg Principles, are:
A. Incorporating suspicious activity monitoring into periodic reviews to actively identify and assess potential suspicious transactions or patterns.
B. Incorporating due diligence results, including customer risk ratings, to prioritize monitoring efforts and focus resources on high-risk customers and transactions.