Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

When encountering repeat SAR filings, which criteria are essential for a financial institution to consider when escalating an investigation?

1. Choosing when to disclose the SAR to the client

2. Determining when to close the account

3. Analyzing the relationship with the client

4. Resolving the timeline for returning cash to the client

The correct answer is: Determining when to close the account

In the context of repeat Suspicious Activity Report (SAR) filings, determining when to close the account is a critical assessment that financial institutions need to make. This action is particularly significant because it reflects the institution's duty to mitigate risk and protect itself from potential regulatory and reputational exposure due to ongoing suspicious behavior associated with a client. When a financial institution identifies repeated suspicious activity that leads to multiple SARs, it must consider whether the risks posed by maintaining the client's account outweigh the benefits of the relationship. Closing the account can serve to prevent further illicit activity, protect other customers, and fulfill the institution's regulatory obligations. This decision is also part of a broader risk management strategy; it ensures that the institution does not inadvertently facilitate further misconduct by allowing a relationship to continue despite recurring red flags. Other elements, such as analyzing the relationship with the client, may indeed play a role in the decision-making process, but the direct action of closing an account in response to repeated suspicions stands as a crucial step in managing anti-financial crime initiatives. It is an important part of the compliance framework that responds decisively to emerging risks associated with the client.