Correspondent banking relationshipspresent high money laundering risks, requiringenhanced due diligence (EDD)when monitoringcross-border transactions.
Option B (Correct):Verifying that neither the sender nor the receiver is on a sanctions list is a mandatory AML check.
Option C (Correct):Requesting invoices and contracts helps establish the legitimacy of the transactionandensures funds are being used for their stated purpose.
Option D (Correct):Conducting adverse media checkscan revealpast financial crime links or regulatory issuesrelated to the sender or beneficiary.
Why Other Options Are Incorrect:
Option A (Incorrect):Calling the individual is not a standard AML procedureandmay violate privacy laws.
Option E (Incorrect):314(b) information sharing applies only to U.S. financial institutions-the bankshould first conduct its internal review before escalating internationally.
Best Practices for Investigating Suspicious Correspondent Banking Transactions:
Check for links to known money laundering typologies.
Verify business relationships using supporting documentation.
Ensure transaction transparency through KYC/CDD measures.
Reference:
FATF Recommendation 13 (Correspondent Banking AML Requirements)
USA PATRIOT Act Section 314(b) on Information Sharing
Wolfsberg Group Guidance on Cross-Border Transaction Monitoring

According to the Basel Committee guidelines, banks should formulate a customer acceptance policy and a tiered customer identification programme that involves more extensive due diligence for higher risk customers12. The customer acceptance policy should be approved by senior management and include clear guidelines on the types of customers that are likely to pose a higher than average risk to the bank1. Senior management should also ensure that the bank has adequate resources and systems to effectively manage the risks associated with higher risk customers1. Therefore, senior management should determine whether or not to enter business relationships with higher risk customers, based on the bank's risk appetite, policies, and procedures.
References:
CAMS Study Guide (the 6th edition), page 1843
Customer due diligence for banks - Bank for International Settlements1
The Basel Committee: The Important Set Of International Banking Regulations2

A compliance officer should communicate with regulatory and law enforcement authorities in line with applicable local laws during an ongoing investigation into a client's activities by a competent authority. This is because the compliance officer has a duty to cooperate with the authorities and provide relevant information and documents as requested, while also protecting the confidentiality and privacy of the client and the institution. The compliance officer should not restrict the communication to senior management only, as this could hinder the investigation or create a perception of obstruction. The compliance officer should not communicate only in writing, as this could limit the effectiveness and timeliness of the communication. The compliance officer should not limit the communication to the absolute minimum, as this could imply a lack of cooperation or transparency.
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CAMS Certification Package - 6th Edition | ACAMS1
CAMS Certifications: How to Get CAMS Certified | ACAMS2
ACAMS CAMS Certification Video Training Course - Exam-Labs3
Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)4

FSRBs are regional bodies that work with FATF to promote the implementation of AML and CFT standards.
FSRBs are made up of member countries that have agreed to work together to combat money laundering and the financing of terrorism [1]. The tools used by FSRBs to promote the implementation of AML and CFT standards include training measures, mutual evaluations of its members, technical assistance, and the sharing of information. FSRBs may also adopt recommendations and best practices based on the FATF's 40 Recommendations.

This represents the highest risk factor for terrorist financing because it may indicate that the charity is diverting funds to support terrorist organizations or activities, or that it is acting as a front or conduit for terrorist financing. Disbursement of funds to entities unrelated to the purpose of the charity may also violate the donor's intentions, the charity's mission, or the applicable laws and regulations. A charity with unaudited accounts may have weak internal controls, governance, or transparency, which may increase the risk of misappropriation, diversion, or misuse of funds.
ACAMS CAMS Certification Video Training Course1, Module 2: Money Laundering Risks and Methods, Lesson 2.3: Money Laundering Risks and Methods by Sector ACAMS CAMS Study Guide, 6th Edition2, Chapter 2: Money Laundering Risks and Methods, Section 2.3:
Money Laundering Risks and Methods by Sector, pp. 40-41
ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 2: Money Laundering Risks and Methods, Section 2.3: Money Laundering Risks and Methods by Sector, Slide 18