You have to take reasonable measures to conduct ongoing monitoring of financial transactions that pose high risks of money laundering and terrorist financing to detect suspicious transactions. Reasonable measures may involve manual or automated processes, or a combination of both depending on your resources and needs. They also depend on the size of your business and the risks to which you are exposed. You do not necessarily have to create or purchase an electronic system. You can use your available resources and business processes and build on these.
Your policies and procedures have to determine what kind of monitoring is done for particular high risk situations, including how to detect suspicious transactions. Your policies and procedures should also describe when monitoring is done (its frequency), how it is reviewed, and how it will be consistently applied.
You could consider the following measures to monitor high risk situations:
- review transactions based on an approved scheduled that involves management sign-off;
- develop reports or perform more frequent review of reports that list high risk transactions. Flag activities or changes in activities from your expectations and elevate concerns as necessary;
- set business limits or parameters regarding accounts or transactions that would trigger early warning signals and require mandatory review; and
- review transactions more frequently against suspicious transaction indicators relevant to the relationship and escalate them should additional indicators be detected.