Which additional information should the investigator request?

An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.

• X is the UBO. and owns 97% shares of this entity customer;

• Y is is the authorized signatory of this entity customer.

This entity customer was previously the subject of a SAR/STR.

KYC PROFILE

Customer Name: AAA International Company. Ltd

Customer ID: 123456

Account Opened: June 2017

Last KYC review date: 15 Nov 2020

Country and Year of Incorporation: The British Virgin Islands, May 2017

AML risk level: High

Account opening and purpose: Deposits, Loans and Trade Finance

Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount

During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern:

TRANSACTION JOURNAL

Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency:

Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties

Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties

For United States Dollars (USD) currency:

Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties

Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.

RFI Information and Supporting documents:

According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:

1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.

2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank’s customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan

After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed.

Which additional information should the investigator request?
A . Previously filed SARVSTR unrelated to the customer, but similar in content
B . Formation document/description of the group-related companies
C . Source of the incoming funds to the group-related companies
D . Adverse news screening on all names listed in the formation documents

View Answer

Answer: C

Explanation:

The additional information that the investigator should request is the source of the incoming funds to the group-related companies. This is because the customer declared that the ongoing source of funds to this account comes from group-related companies, but the transaction journal shows that the customer received funds from different third parties, not from group-related companies. Therefore, the investigator should verify the relationship and legitimacy of these third parties and their funds with the customer and the group-related companies. The other options are not relevant or necessary for this investigation.

Reference: Advanced CAMS-FCI Certification | ACAMS