The Patriot Act, enacted in 2001, introduced several provisions to enhance the anti-money laundering and counter-terrorist financing (AML/CFT) measures for U.S. banks and their foreign correspondent relationships.
Some of the potential issues for foreign financial institutions (FFIs) maintaining correspondent accounts with U).S. banks under the Patriot Act are:
Cancellation of correspondent banking relationships: The Patriot Act requires U.S. banks to conduct due diligence and enhanced due diligence on their foreign correspondent accounts, and to terminate any account that poses a significant risk of money laundering or terrorist financing. This may result in the cancellation of correspondent banking relationships with FFIs that do not meet the U.S. standards or cooperate with the U.S.
authorities. The loss of correspondent banking relationships may affect the FFIs' ability to access the U.S.
financial system and provide services to their customers.
Forfeiture of funds in a U.S. interbank account: The Patriot Act authorizes the U.S. government to seize and forfeit any funds in a U.S. interbank account that are involved in or traceable to money laundering or terrorist financing activities. This means that FFIs may face the riskof losing their funds in a U.S. interbank account if they or their customers are suspected or accused of engaging in illicit activities. The forfeiture of funds may have significant financial and reputational consequences for the FFIs and their customers.
Prohibition of correspondent accounts for shell banks: The Patriot Act prohibits U.S. banks from establishing or maintaining correspondent accounts for shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. This means that FFIs that are shell banks or have relationships with shell banks cannot access the U.S. financial system through correspondent accounts.
The prohibition of correspondent accounts for shell banks aims to prevent the use of shell banks as vehicles for money laundering and terrorist financing.
CAMS Study Guide, 6th Edition, Chapter 4: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 81-841 USA PATRIOT Act, Title III: International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Sections 312, 319, and 3132 Wolfsberg Anti-Money Laundering Principles for Correspondent Banking, October 2014, pp. 3-43 Reference:http://www.ffiec.gov/bsa_aml_infobase/pages_manual/olm_027.htm

These options involve transferring funds to another country, which could indicate cross-border movement of illicit funds, and cashing out winnings in checks under 10,000 USD, which could indicate structuring to avoid reporting thresholds. The other options do not seem as suspicious or relevant to money laundering.

This potential action is authorized by Section 319 of the USA PATRIOT ACT, which allows the U.S.
government to seize funds from a foreign bank's correspondent account in the U.S. if the foreign bank refuses to cooperate with a request for records relating to an investigation of money laundering or terrorist financing.
The U.S. government can seize an amount equal to the funds in the account of the target of the investigation, regardless of whether those funds are actually in the correspondent account. In this case, the U.S. government can seize $1 million from Bank A's correspondent account in the U.S. because Bank A holds $1 million in the account of the WTS, which is the target of the forfeiture action.
The other potential actions are not authorized by the USA PATRIOT ACT or other U.S. laws. The U.S.
government cannot seize Bank A's entire $5 million correspondent account in the U.S. because that would exceed the amount in the WTS's account andwould violate the principle of proportionality. The U.S.
government cannot seize the WTS's $1 million account at the non-U.S. branch of Bank A because that would require the cooperation of the foreign jurisdiction where the branch is located, which may not be forthcoming.
The U.S. government cannot seize $5 million from the non-U.S. branch of Bank A where the WTS's account is located because that would also require the cooperation of the foreign jurisdiction and would exceed the amount in the WTS's account.
CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: International Standards and Global Initiatives, pp. 67-68 CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Study Guide, pp. 54-55 How Does the Patriot Act Affect Criminal Investigations? | Nolo, Section 319: Forfeiture of Funds in United States Interbank Accounts The USA PATRIOT Act at 20: Sneak and Peek Searches - CRS Reports, Section 319: Forfeiture of Funds in United States Interbank Accounts

Correspondent banking relationshipspresent high money laundering risks, requiringenhanced due diligence (EDD)when monitoringcross-border transactions.
Option B (Correct):Verifying that neither the sender nor the receiver is on a sanctions list is a mandatory AML check.
Option C (Correct):Requesting invoices and contracts helps establish the legitimacy of the transactionandensures funds are being used for their stated purpose.
Option D (Correct):Conducting adverse media checkscan revealpast financial crime links or regulatory issuesrelated to the sender or beneficiary.
Why Other Options Are Incorrect:
Option A (Incorrect):Calling the individual is not a standard AML procedureandmay violate privacy laws.
Option E (Incorrect):314(b) information sharing applies only to U.S. financial institutions-the bankshould first conduct its internal review before escalating internationally.
Best Practices for Investigating Suspicious Correspondent Banking Transactions:
Check for links to known money laundering typologies.
Verify business relationships using supporting documentation.
Ensure transaction transparency through KYC/CDD measures.
Reference:
FATF Recommendation 13 (Correspondent Banking AML Requirements)
USA PATRIOT Act Section 314(b) on Information Sharing
Wolfsberg Group Guidance on Cross-Border Transaction Monitoring

According to the Anti-Money Laundering Specialist (the 6th edition) resources, one of the red flags for money laundering in real estate transactions is the use of an appraiser who is not on the approved list of the financial institution. This could indicate a possible collusion between the appraiser and the borrower or the underwriter to inflate the value of the property and obtain a higher loan amount. The anti-money laundering specialist should document the underwriter's actions and the reasons for approving the exception, as well as the discrepancy between the appraised value and the market value of theproperty. The specialist should then file a suspicious transaction report (STR) to the relevant authorities, as required by the local regulations .
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 7: Money Laundering Risks and Methods, page 201.
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 8: Anti- Money Laundering Programs, page 227.
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 9:
Conducting or Supporting the Investigation Process, page 255.