A suspicious transaction report has been filed on an account owned by the wife of...

The most important consideration when deciding whether to recommend closing the account is the requests from the competent authority, such as the Financial Intelligence Unit (FIU), the regulator, or the law enforcement. According to the FAQs related to Suspicious Transaction Reporting issued by theFinancial Monitoring Unit of Pakistan1, reporting entities should not terminate the relationship with the customer after filing a STR, unless instructed by the competent authority. This is because closing the account may alert the customer of the STR, compromise the investigation, or hinder the collection of further evidence. Therefore, the reporting entity should consult with the competent authority before taking any action to close the account.

The other options are less important or irrelevant considerations. The institution’s anti-money laundering policy may provide some guidance on how to handle high-risk customers or accounts, but it should not override the requests from the competent authority. Customer relations and the Chief Executive’s reputational risk are not valid reasons to keep the account open if there is evidence of money laundering or terrorist financing. The reporting entity should act in accordance with the law and the best interests of the public, not the personal or business interests of the customer or the bank’s management.

1: Frequently Asked Questions (FAQs) related to Suspicious Transaction Reporting, 5