According to the ACAMS study guide, one of the best practices for dealing with law enforcement inquiries is to verify the identity and authority of the law enforcement officer before providing any information (p. 224).
This is to ensure that the inquiry is legitimate and not a phishing attempt or a breach of confidentiality. The compliance officer should also document the inquiry and the information provided, and consult with legal counsel if necessary. The other options are not appropriate, as they may either violate the law, compromise the investigation, or create unnecessary work.
ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.
What Is An AML Officer1

Financial institutions must screen customers against adverse information and determine whether they pose a significant financial crime risk.
* Option B (Correct):A direct link to an organized crime group is a severe red flag. Organized crime networks engage in money laundering, corruption, and other illicit activities. UnderFATF Recommendations 10 and 12, financial institutions must implement enhanced due diligence (EDD) for high-risk customers and consider account closure if they pose undue risk.
* Option A (Incorrect):Bankruptcy does not necessarily indicate financial crime risk, though it may raise financial stability concerns.
* Option C (Incorrect):While PEPs pose a higher risk for corruption, financial institutions typically apply EDD rather than immediately terminating the relationship.
* Option D (Incorrect):Violating a construction permit is a regulatory issue, not directly linked to financial crime.
Reference:FATF Recommendation 10 (Customer Due Diligence); FATF Recommendation 12 (PEPs); Wolfsberg Principles on Risk-Based Due Diligence.

Mutual Legal Assistance Treaties (MLATs)areformal agreementsforcross-border law enforcement cooperation.
Option D (Correct):MLATsallow countries toexchange information, conduct joint investigations, and provide legal assistance.
Option A (Incorrect):Memoranda of Agreement (MOA)are typicallynon-binding agreementsbetween private entities.
Option B (Incorrect):Declarations of understandingare informal statements, not legally binding treaties.
Option C (Incorrect):Memoranda of Understanding (MOUs)governgeneral cooperation, notformal legal assistance.
Reference:FATF Recommendation 40 (International Cooperation), U.S.-EU MLATs, INTERPOL Guidelines on Cross-Border Investigations.

The Basel Committee on Banking Supervision (BCBS) is an international body that sets standards and guidelines for the prudential regulation of banks. One of its key publications is the Customer Due Diligence for Banks, which outlines the essential elements of Know Your Customer (KYC) standards for banks.
According to this document, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to address variations in risk among each line of business within the organization. This means that banks should adopt a risk-based approach to KYC, taking into account the different types, levels, and sources of risk associated with different customers, products, services, transactions, and delivery channels. By doing so, banks can allocate their resources more efficiently and effectively, and mitigate the potential for money laundering, terrorist financing, and other financial crimes.
References:
Customer Due Diligence for Banks, BCBS, October 2001, p. 5, 14-15.
The Basel Committee: The Important Set Of International Banking Regulations, Financial Crime Academy, November 2023.

An internal investigation log is primarily intended to track the status of investigations into unusual activity. This is to ensure that the investigations are conducted in a timely, thorough, and consistent manner, and that the results and recommendations are documented and communicated to the relevant parties12. An internal investigation log can also help the organization to identify any trends, patterns, or gaps in its anti- money laundering (AML) compliance program, and to measure its effectiveness and efficiency3.
An internal investigation log is not intended to provide training on investigations to the anti-money laundering officer and Financial Intelligence Unit (FIU), report status of investigations to the Board of Directors, or detect and monitor possible suspicious activity. These are separate functions that may involve the use of the internal investigation log, but are not its primary purpose.
1: How to Conduct Effective AML Investigations - Blog | Unit211 2: BSA/AML Internal Audit: PwC2 3:
Anti-Money Laundering: 5 Steps to Conduct an Audit3