FRM Part II · FRM Exam Part II · Sound Management of Risks Related to Money Laundering and Financing of Terrorism
An intermediary bank receives a cross-border wire transfer that lacks the required originator information. Which response is most consistent with sound practice?
The intermediary should apply risk-based policies to decide whether to execute, reject or suspend the transfer, follow up with the sending institution, and consider filing a suspicious transaction report. Forwarding it unchanged or altering or deleting records would undermine the traceability that wire transfer rules require.
- AProcess it unchanged since the intermediary has no direct customer relationship
- BHave risk-based policies to decide whether to execute, reject or suspend the transfer and consider filing a suspicious transaction report, and follow up with the sending institutionCorrect
- CStrip the remaining fields and forward it as a domestic payment
- DExecute and delete the record to avoid retaining incomplete data
Explanation
Intermediaries must keep originator and beneficiary information with the transfer and have risk-based procedures for transfers lacking required information, including execute, reject or suspend decisions, follow-up and considering an STR. Passing it on unchanged, restructuring it or deleting records defeats traceability.
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