According to the Anti-Money Laundering Specialist (the 6th edition) resources, the institution should

develop a system to monitor all the activity of the customer’s accounts to mitigate the risk

associated with these accounts. This is because the customer’s behavior and profile may indicate

some red flags of money laundering, such as:

Operating an import-export business, which is a common sector for trade-based money laundering,

where trade transactions are used to disguise the movement of illicit funds, either by over- or under-

invoicing, misrepresenting the quantity or quality of goods, or falsifying documents1.

Receiving funds from a jurisdiction perceived as highly corrupt, which may increase the risk of the

funds being derived from bribery, embezzlement, fraud, or other predicate offences2. Transparency

International is a global civil society organization that publishes an annual CorruptionPerceptions

Index, which ranks countries by their perceived levels of public sector corruption based on expert

assessments and surveys3.

Making frequent transfers among the accounts, which may indicate a layering technique, where

funds are moved through multiple accounts, institutions, or jurisdictions to obscure the audit trail

and the source and ownership of the funds4.

Preferring to manage the accounts separately, which may indicate a lack of transparency or an

attempt to avoid detection or reporting by the institution.

By developing a system to monitor all the activity of the customer’s accounts, the institution can:

Identify and verify the identity and beneficial ownership of the customer and the parties involved in

the transactions.

Obtain and verify information on the nature and purpose of the business relationship and the source

and destination of the funds.

Conduct a risk assessment of the customer and the transactions based on the customer’s profile,

behavior, and geographic locations.

Apply enhanced due diligence and ongoing monitoring measures for higher-risk customers and

transactions, such as obtaining additional information, documentation, or approval, or conducting

more frequent or in-depth reviews.

Detect and report any suspicious or unusual transactions or activities to the relevant authorities.

The other three options are incorrect because:

File a suspicious transaction report is not the best answer, as it is a reactive measure that should be

taken after the institution has identified or suspected money laundering or terrorist financing

activity, not before. The institution should first conduct due diligence and monitoring of the customer

and the transactions, and then file a report if there are reasonable grounds to believe that the

activity is suspicious or unusual.

Diminish the importance of the subjective Transparency International rating is not the best answer,

as it is a complacent and irresponsible attitude that may expose the institution to legal, regulatory,

reputational, or operational risks. The Transparency International rating is not subjective, but based

on credible sources and methodologies, and it is widely used as a reference by governments,

businesses, civil society, and the public to assess the level of corruption in different countries3. The

institution should not ignore or downplay the rating, but rather use it as one of the factors to

evaluate the risk of the customer and the transactions.

Conduct a trade-price manipulation analysis is not the best answer, as it is a specific and technical

measure that may not be sufficient or appropriate to mitigate the risk associated with these

accounts. A trade-price manipulation analysis is a method of detecting trade-based money

laundering by comparing the prices of goods or services in a transaction with the market prices or

other benchmarks, and identifying any significant discrepancies or anomalies. However, this measure

may not be feasible or effective if the institution does not have access to reliable and comparable

data, or if the goods or services are not standardized or homogeneous. Moreover, this measure may

not address other aspects of the risk, such as the identity, ownership, or behavior of the customer

and the parties involved in the transactions.

1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 108 2: ACAMS, CAMS Study Guide, 6th

Edition, Chapter 5, p. 107 3: Transparency International, Corruption Perceptions Index, 3 4: ACAMS,

CAMS Study Guide, 6th Edition, Chapter 5, p. 106 : ACAMS, CAMS Study Guide, 6th Edition, Chapter

5, p. 103 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 103 : ACAMS, CAMS Study Guide,

6th Edition, Chapter 5, p. 104 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 105 : ACAMS,

CAMS Study Guide, 6th Edition, Chapter 5, p. 105 : ACAMS, CAMS Study Guide, 6th Edition, Chapter

5, p. 109