FRM Part II · FRM Exam Part II · Sound Management of Risks Related to Money Laundering and Financing of Terrorism
A bank's wire transfer unit receives cross-border payments from an ordering institution. Several incoming messages lack required originator information. Which response is most consistent with the guidance on wire transfers?
The bank should use risk-based procedures to detect incomplete transfers, seek the missing originator information from the ordering institution, and consider restricting or ending the relationship if failures persist. Ignoring the gaps or inventing data is improper, and automatic rejection and reporting of every case is not required.
- AApply risk-based procedures to identify such transfers, consider asking the ordering institution for the missing data, and consider restricting or terminating the relationship if the deficiency persistsCorrect
- BProcess all payments unchanged because the beneficiary is a verified customer
- CReturn every such payment immediately and file a suspicious transaction report for each
- DFill in the missing originator fields using the bank's own estimate and process the payment
Explanation
Beneficiary institutions should have risk-based procedures to handle transfers lacking originator information, which can include requesting the information, and restricting or ending the relationship with institutions that repeatedly fail to comply. Ignoring the gap or fabricating data is improper, and blanket rejection plus automatic reporting is not required.
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