An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction.
What action should the employee take?
Click on the arrows to vote for the correct answer
A. B. C. D.B
The correct answer is B. Report the conversation to the compliance officer.
Explanation: The colleague's advice to the customer on how to avoid a suspicious transaction report suggests that the customer may be attempting to engage in illicit activity. The employee who overheard this conversation has a duty to report any suspicious activity to the appropriate authorities, as mandated by Anti-Money Laundering (AML) laws and regulations.
Option A, reporting to the local police, may not be the appropriate course of action at this stage, as the employee is not in a position to ascertain whether a crime has actually been committed. The responsibility for reporting suspicious activity lies with the financial institution and its AML compliance function.
Option C, telling the colleague that it is against policy to give such advice, is not sufficient to address the potential AML risk. A more comprehensive approach is needed to investigate and report any suspicious activity.
Option D, ignoring the situation because the colleague is the relationship manager for that customer, is not acceptable as it may violate the institution's AML policy and regulatory requirements.
Therefore, the best course of action is to report the conversation to the compliance officer, who is responsible for investigating and reporting suspicious activity to the relevant authorities. The compliance officer will determine whether further action, such as filing a suspicious activity report (SAR), is necessary.