Home > Blogs > Real Time Case Scenario of Screening in Anti Money Laundering

Real Time Case Scenario of Screening in Anti Money Laundering

Real Time Case Scenario of Screening in Anti Money Laundering

Last Updated on Aug 30, 2023, 2k Views



Certainly, here's a real-time case scenario involving screening in anti-money laundering (AML) processes:

Case Scenario: International Wire Transfer Screening


ABC Bank is a global financial institution that facilitates international wire transfers for its clients. The bank has stringent AML procedures in place to detect and prevent money laundering and other financial crimes.


Transaction Initiation: A client, John Smith, initiates an international wire transfer of $500,000 from his personal account to an offshore account in a high-risk jurisdiction. The purpose of the transfer is stated as a business investment.

Initial Screening: The bank's AML Course system immediately initiates a screening process as the transaction is flagged for further review due to the high-risk jurisdiction and the substantial amount involved. The bank's AML Course software compares the transaction details against various watchlists, sanctions lists, and internal databases containing information about known high-risk individuals, entities, and countries.

Match Identification: During the screening, the bank's AML Course system identifies a potential match. The beneficiary's account is linked to an entity on a global sanctions list maintained by an international organization due to its involvement in illegal arms trading.

Alert Generation: The AML Course system generates an alert for further investigation. The bank's compliance team receives the alert, including details about the transaction, the potential match, and the associated risks.

Investigation: The compliance team starts investigating the case. They review the match, cross-reference additional information about the beneficiary, and gather more context about the transaction's purpose. They also consider factors such as the client's transaction history, source of funds, and the relationship with the beneficiary.

Enhanced Due Diligence (EDD): Based on the investigation, the bank decides to conduct enhanced due diligence on the transaction. This involves contacting the client, John Smith, to request additional documentation supporting the purpose of the transaction and the legitimacy of the beneficiary's business.

Client Interaction: John Smith responds to the bank's request by providing additional documentation, including contracts and business plans related to the investment. The bank's compliance team reviews the documents to ensure their authenticity and consistency.

Resolution: After a thorough investigation and assessment, the bank determines that the transaction is not related to money laundering or any illegal activity. The potential match was a false positive due to similarities in the beneficiary's name with an entity on the sanctions list. The transaction is allowed to proceed.

Key Takeaways:

AML Course screening is a critical step in identifying and preventing money laundering and financial crimes.

Automated AML Course systems use watchlists, sanctions lists, and internal databases to compare transaction details against known risk factors.

False positives can occur due to similarities in names or other factors, emphasizing the need for thorough investigation and due diligence.

Enhanced due diligence may be required for transactions that exhibit higher risks.

A robust AML Course program involves not only automated screening but also human expertise to interpret results and make informed decisions.

Find Anti Money Laundering Certification Training in Other Cities