According to the Wolfsberg Group, a global association of leading banks that develops guidance and standards for the management of financial crime risks, both private and correspondent banks should monitor account and transactional activity after the proper identification and verification of customers, as part of their anti-money laundering and counter-terrorist financing (AML/CTF) measures12. This is consistent with the FATF Recommendation 10, which requires financial institutions to conduct ongoing due diligence on their business relationships, including scrutinising transactions to ensure that they are consistent with the customer's risk profile and source of funds3. Monitoring account and transactional activity is a key component of the risk-based approach, as it enables banks to detect and report suspicious or unusual transactions, identify changes in customer behaviour or circumstances, and update customer information and risk assessments accordingly4.
References:
1: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012)
2: Wolfsberg Correspondent Banking Due Diligence Questionnaire (2017)
3: The FATF Recommendations - Financial Action Task Force
4: Risk-Based Approach for the Banking Sector - Financial Action Task Force

The charity frequently withdrawing cash from the bank indicates possible terrorist financing, as cash transactions are often used to conceal the source, destination, and purpose of funds. Cash transactions also make it difficult to trace the flow of funds and identify the beneficiaries. Terrorist financiers may use charities as a cover to collect and distribute funds for their activities, and may exploit the cash-based nature of charitable donations to avoid detection12.
Reference: https://www.fatf-gafi.org/media/fatf/documents/reports/FATF%20Terrorist%20Financing%
20Typologies%20Report.pdf

A money laundering risk assessment is a crucial component of an effective anti-money laundering (AML) program. It involves identifying, assessing, and understanding the specific risks related to money laundering and terrorist financing that the institutionmay face. A risk assessment helps the institution to design and implement appropriate controls, policies, procedures, and training to mitigate the risks. A risk assessment should be updated regularly and whenever there are significant changes in the institution's business activities, products, services, customers, or geographic locations. In this scenario, the financial institution has experienced significant deficiencies in its AML program during a recent regulatory examination. The deficiencies were primarily attributed to the lack of oversight by the institution's leadership in implementing adequate controls over the new products and services that were added as part of the institution's aggressive growth strategy. To correct these weaknesses in the AML program, the leadership should first address the area of international control known as "Money laundering risk assessment" (Option C). By conducting a new and comprehensive risk assessment, the leadership can identify the potential vulnerabilities and gaps in the AML program that may arise from the new products and services. The risk assessment can also help the leadership to prioritize the actions and resources needed to address the deficiencies and enhance the AML program.
Once the risk assessment is completed, the leadership can then work on updating the AML policy, providing adequate training, and ensuring sufficient compliance staff to implement and monitor the controls.
:
1, Chapter 2: Risk Assessments
2, Section 2: Anti-Money Laundering Compliance Program
3, Question 145

When investigating unusual transactions, financial institutions must focus on data-driven risk assessment and internal review first.
* Option A (Correct):Assessing business ownership and control structureshelps determine ifmultiple businesses are connected through hidden links(e.g., shell companies or common ownership).
* Option C (Correct):The account managermay provide valuable insight on whether the customer's activity aligns with their expected profile.
* Option B (Incorrect):Law enforcement should only be contacted after internal review confirms suspicious activity.
* Option D (Incorrect):Declining transactions without thorough investigationcould lead tomissed SAR filingsor improper risk assessment.
* Option E (Incorrect):Social media is not a reliable investigative toolfor AML casework.
Key Red Flags in Business AML Investigations:
* Frequent transactions between businesses with no clear commercial relationship.
* Ownership structures that obscure beneficial owners.
* Rapid movement of funds through multiple accounts without economic justification.
Best Practices for Investigating Complex Cases:
* Verify ownership and control through official company registries.
* Conduct negative news screening and PEP/sanctions screening.
* Request supporting documentation from the customer.
Reference:
FATF Recommendation 10 (Customer Due Diligence)
Wolfsberg Group Guidance on Transaction Monitoring and Investigations
FinCEN Red Flags for Business Money Laundering Investigations

The anti-money laundering officer (AML officer) is responsible for overseeing the implementation and effectiveness of the anti-money laundering (AML) program of a financial institution. The AML officer should have sufficient authority, independence, and access to resources to perform this role. Reporting to the Sales Director may compromise the independence and objectivity of the AML officer, as the Sales Director may have conflicting interests or incentives that could influence the AML officer's decisions or actions. The AML officer should report to a senior management level that is independent of business functions and has direct access to the board of directors or a relevant committee. This would ensure that the AML officer can communicate any AML issues orconcerns to the board without any interference or undue influence from the business functions.: = Some of the references that support this answer are:
ACAMS Study Guide for the CAMS Certification Examination, Chapter 2, Section 2.2.1, page 41: "The AML officer should report to a senior management level that is independent of the business line and has direct access to the board of directors or a relevant committee." Money Laundering Reporting Officer: The Role Of MLRO, Section "Role Of Money Laundering Reporting Officer": "The MLRO should have independent monitoring and should be able to connect directly with people who make business decisions, such as senior management or the board of directors." Money Laundering Reporting Officer (MLRO)? | Dow Jones, Section "What is a Money Laundering Reporting Officer (MLRO)?": "A Money Laundering Reporting Officer (MLRO) is tasked with overseeing a firm's compliance with the Financial Conduct Authority's (FCA) rules on money laundering. ... The MLRO should have sufficient authority and independence within the firm to carry out their responsibilities effectively."