16) Should a financial institution close a customer’s account once it becomes suspicious of the funds in that customer’s account?

A decision to close an account is entirely a commercial one, informed by the financial institution’s assessment of the money laundering risk posed to it by that customer. The contract between the financial institution and customer is usually wide enough to permit the financial institution, on its own initiative, to close a customer’s account. If this is not currently the case, financial institutions should ensure that contracts make provisions for this.

Where a financial institution chooses to take such action, this would result in the withdrawal and consequential payment to the customer of all the funds in the closed account. As such, since this withdrawal would be a transaction on the account it may constitute a prohibited act. In this case, the consent of the designated authority to proceed with the withdrawal of all the funds in the account must first be obtained.

Where a disclosure has been made to the FID about a particular transaction involving suspected criminal property, any subsequent action to close the account would require consent from the designated authority.

Where financial institutions request consent from the designated authority to close an account, the balance in the account should be stated in the request.