A real estate agency discovers that a client's identity documents appear to be fraudulent during the customer due diligence process. What is the most appropriate action under AML/CFT requirements?

Option A: Continue with the transaction but request additional documentation

Continuing with the transaction while requesting additional documentation violates AML/CFT requirements. Once fraudulent documents are suspected, the business relationship must be terminated immediately. Additional documentation cannot cure the fundamental problem of suspected fraud, and continuing the relationship could facilitate money laundering or terrorism financing, exposing the agency to criminal liability.

Option C: Accept alternative forms of identification from the client

Accepting alternative forms of identification when fraud is already suspected fails to address the underlying compliance issue. The AML/CFT Act requires termination of the business relationship when fraudulent documents are suspected, regardless of what alternative documentation might be available. This approach would still breach the agency's obligations to report suspicious activity.

Option D: Proceed with the transaction and monitor it more closely

Proceeding with the transaction and monitoring it more closely directly violates AML/CFT obligations. Once fraudulent documentation is suspected, the relationship must be terminated immediately. Enhanced monitoring cannot substitute for the mandatory requirement to cease all business dealings and file a suspicious transaction report with the FIU.