Aproper investigation of unusual transactions requires a mix of data analysis, contextual review, and expert judgmentto assess potential risks.

Option B (Correct):Cross-referencing transactions with external factors(e.g.,political events, commodity price fluctuations, news reports) helps identifypotential links to illicit activities.

Option C (Correct):Therelationship managermay provide insights intowhether a transaction aligns with the customer’s known profile and business activity.

Option D (Correct):Arisk-based approachensures thathigher-risk transactions receive enhanced scrutiny, while lower-risk ones undergo standard monitoring.

Why Other Options Are Incorrect:

Option A (Incorrect):Focusing only on transaction amountsignorescontextual factors, such asunusual behavior in low-value transactions.

Option E (Incorrect):Automated alerts are valuable but cannot replace human analysis and judgment.Manual reviews remain necessary for complex cases.

Red Flags in Unusual Transactions:

Large or frequent transactions inconsistent with a customer’s normal profile.

Payments from/to high-risk jurisdictions without a clear purpose.

Use of intermediaries or shell companies to move funds.

Best Practices for AML Investigations:

Use both qualitative and quantitative factorsto assess transaction risks.

Collaborate with business units(e.g., relationship managers) to understand client behavior.

Apply a risk-based approach to allocate investigation resources efficiently.