The bank's current anti-money laundering program is inadequate because it does not include a process for monitoring customer account activity, which is a key component of detecting and reporting suspicious transactions. The fact that the consultant and the bank have mutual clients does not affect the risk rating of those customers, nor does it justify a lower level of scrutiny. The bank should revise its procedures to ensure that it has a comprehensive and risk-based approach to customer due diligence, transaction monitoring, and reporting.
:
CAMS Certification Package - 6th Edition, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 67-69.
FATF Guidance for a Risk-Based Approach: Legal Professionals, pp. 10-11, 19-20.
BSA/AML Internal Audit: PwC, pp. 1-2.

The important fact to include in the STR is the recent change in the timing of deposits and withdrawals in the account, as this indicates a possible change in the customer's source and use of funds, and may suggest money laundering or other illicit activity. The customer's work history, the amount of his monthly retirement check, the fact that he is well known to the bank staff, and the fact that he has lived in the area and banked at this bank for 25 years are not relevant for the STR, as they do not explain the unusual pattern of transactions in his account.
:
CAMS Certification Package - 6th Edition | ACAMS, Chapter 4: Conducting and Supporting the Investigation Process, page 131 CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Examination Preparation, page 8 ACAMS CAMS Certification Video Training Course - Exam-Labs, Video 4.2: Suspicious Transaction Reporting Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 97

an employee who avoids taking periodic vacations despite having accrued vacation time may be trying to conceal fraudulent or illegal activities that would be exposed in their absence. This is a common red flag for internal fraud and money laundering, as it indicates a lack of segregation of duties, internal controls, and oversight. Employees who engage in such behavior may also exhibit other signs of stress, defensiveness, or secrecy.
:
Learn about red flags for internal fraud, section "An employee may be a higher internal fraud risk when a combination of the following red flags are present", bullet point 1: "Unwilling to share duties or take leave." Money Laundering Red Flags | Key Behaviours and Indicators, section "Employee Red Flags", bullet point 1:
"Avoiding taking holidays or time off work."
Top 10 AML Red Flags: Warning Signs and Financial Risks, section "AML Red Flags Categories", sub- section "Employee Red Flags", bullet point 1: "Avoiding taking vacations or sick leaves."

Correspondent banking relationships present high money laundering risks, requiring enhanced due diligence (EDD) when monitoring cross-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 transaction and ensures funds are being used for their stated purpose.
Option D (Correct): Conducting adverse media checks can reveal past financial crime links or regulatory issues related to the sender or beneficiary.
Why Other Options Are Incorrect:
Option A (Incorrect): Calling the individual is not a standard AML procedure and may violate privacy laws.
Option E (Incorrect): 314(b) information sharing applies only to U.S. financial institutions-the bank should 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

The USA PATRIOT Act stipulates that US banks that maintain correspondent accounts for foreign banks must keep identification records of foreign bank owners with 50% or more ownership in the bank. This ensures that the US government can track the flow of funds through the correspondent accounts and prevent money laundering and terrorist financing. Additionally, the US federal banking agency can require foreign banks to produce records or information related to any account opened in the US or other countries. This allows the agency to monitor the activities of foreign banks and ensure compliance with US regulations.