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ACCA Applied Knowledge · Business and Technology · Regulation and financial crime

The MLRO of a firm receives an internal report from a junior member of staff about a client's unusual transactions. After review, the MLRO concludes there are reasonable grounds for suspicion. What must the MLRO do next?

The MLRO must submit a suspicious activity report to the relevant national authority, seeking consent to proceed where required. Reasonable grounds for suspicion are enough; proof of crime is not needed. Telling the client would risk tipping off.

  1. ASubmit a suspicious activity report to the relevant national authority and obtain consent before proceeding where requiredCorrect
  2. BReturn the report to the junior staff member and ask for more evidence of the crime before taking any action
  3. CInform the client of the concern so it can provide an explanation, then close the file

Explanation

Where the MLRO concludes there are reasonable grounds for suspicion, a report must be made to the national authority; proof of the underlying crime is not needed. Informing the client would risk tipping off.

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