Section 7: Monitoring of Transactions and Activities

To apply the risk-based oversight approach, the financial institution shall observe the following: a) The financial institution shall provide supervisory tools commensurate with the risks identified in accordance with Paragraph (1.1) under the ML/TF Risk Assessment Section , to enable it to analyze and detect unusual transactions, patterns, and activities in real time of execution or before that. The financial institution shall provide adequate human resources in this regard to monitor transactions and activities and detect any unexpected or unusual behavior from customers. Such tools shall be consistent with the nature, size, and complexity of the financial institution’s business and it shall ensure adequate and continuous monitoring. b) The financial institution shall develop indicators and patterns commensurate with the risks identified, the complexity of its business and activities, and modern ML/TF technologies so that it can detect unusual transactions or activities according to the requirements, development and diversity of the methods used in the execution of such operations and transactions. The indicators can be transformed into strategies for assessing ML/TF risks and designing controls to mitigate such risks. 7.5 The supervisory tools of the financial institution shall include appropriate technological systems that enable it to monitor transactions and activities and detect any unusual or unexpected behavior from customers as manual monitoring of transactions alone is not sufficient. It is necessary for the financial institution to use effective electronic systems for its continuous oversight of transactions, and the systems used shall be commensurate with its risk complexity and outcomes. However, these systems shall be integrated with the basic systems of the financial institution to achieve the following: a) Linking the risk-based customer classification to the technological system to allow further monitoring of high-risk customers and transactions in accordance with the requirements stated in Paragraph (7.2) in the Monitoring of Transactions and Activities Section. b) Following-up all the business of the financial institution as appropriate to ensure adequate monitoring and control. c) Applying a simplified monitoring approach consistent with the risks posed by low-risk customers and businesses, in accordance with Paragraph (7.2) under the Monitoring of Transactions and Activities Section. 7.6 The financial institution shall test the supervisory tools periodically (Once a year a maximum) to ensure that they are effective and adequate and shall develop these tools based on the results of periodic tests that must be documented. 7.7 The financial institution shall monitor customers and transactions on an ongoing basis and take the necessary preventive measures to review and update customer information and categorize customers based on the monitoring results, in accordance with Paragraph (3.7) in the Due Diligence Section . This is to detect any inconsistency between the information disclosed by customers at the beginning of or during a business relationship and the activities monitored. Customers and transactions shall continue to be monitored until the conclusion of the business relationship. 7.8 The financial institution must qualify and train its employees to carry out the monitoring process according to their various work tasks and it shall not only rely on technological systems and programs, taking into consideration its prescribed ML/TF indicators.