CAMS Exam Dumps - Certified Anti-Money Laundering Specialist (the 6th edition)

According to the Wolfsberg Principles on Correspondent Banking1, an institution should consider the following three elements in its enhanced due diligence process for higher risk respondent bank customers:

The quality of the respondent’s AML and client identification controls: The correspondent should assess the adequacy and effectiveness of the respondent’s AML policies, procedures, and systems, as well as its compliance with applicable AML laws and regulations. The correspondent should also verify that the respondent has implemented appropriate customer identification and verification measures, and that it maintains sufficient records of its customers and transactions.

A risk-based determination as to whether or not the respondent is a shell bank: The correspondent should ensure that the respondent is not a shell bank, which is defined as a bank that has no physical presence in any country and is not affiliated with a regulated financial group. The correspondent should also avoid establishing or maintaining relationships with banks that are known to allow their accounts to be used by shell banks.

Whether a Politically Exposed Person (PEP) has an interest or management role in the respondent: The correspondent should identify and assess the potential risks associated with any PEPs who have an ownership or management interest in the respondent, or who are customers of the respondent. The correspondent should apply enhanced scrutiny and monitoring to such relationships, and obtain senior management approval before establishing or continuing them.

References:

Wolfsberg Correspondent Banking Principles 2022 by the Wolfsberg Group, October 2022.

 The best option for the compliance officer is to follow the financial institution’s established STR reporting policy, which should include procedures for reporting suspicious activity involving senior management or board members. This would ensure that the compliance officer acts in accordance with the bank’s internal controls and governance, and avoids any potential conflicts of interest or breaches of confidentiality. The other options are not advisable because they could either compromise the integrity of the STR filing, expose the compliance officer to legal or reputational risks, or alert the subject of the investigation.

References:

ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 4, page 1401

ACAMS CAMS Certification Video Training Course, Module 4, Lesson 22

ACAMS CAMS Certification Practice Exam, Question 843

The board of directors has the ultimate responsibility within a bank for ensuring that the bank has a comprehensive and effective BSA/AML program and oversight framework that is reasonably designed to ensure compliance with applicable regulations. According to the Federal Financial Institutions Examination Council (FFIEC) BSA/AML Examination Manual, the board of directors must approve the BSA/AML compliance program, which includes the BSA/AML policy, internal controls, independent testing, designated BSA/AML compliance officer, and training1. The board of directors must also provide sufficient resources, ensure qualified staff, and hold senior management accountable for implementing and adhering to the BSA/AML compliance program1.

References:

1: FFIEC BSA/AML Examination Manual, Board of Directors and Senior Management Oversight

Screening customers at onboarding and quarterly thereafter is not sufficient to ensure compliance with economic sanctions, as sanctions lists may change frequently and the financial institution may not be aware of the latest updates. Screening should occur promptly after list updates to ensure that the financial institution is not dealing with a sanctioned individual or entity, or facilitating a prohibited transaction. This is recommended by the international guidance from the Financial Action Task Force (FATF) and the Wolfsberg Group12. Screening and performing enhanced due diligence on new relationships is also important, but not the only step to ensure compliance.

References:

CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Sanctions, page 86

The Wolfsberg Group Correspondent Banking Due Diligence Questionnaire 2014, Section 5: Sanctions Policy, page 12

ACAMS CAMS Certification Video Training Course - Exam-Labs, Video 3.1: Sanctions

Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 109

The European Union Fourth Anti-Money Laundering Directive (4th AMLD) is a legal framework that aims to prevent the use of the Union’s financial system for the purposes of money laundering and terrorist financing. One of the provisions of the 4th AMLD is to lower the currency threshold for cash payments from €15,000 to €10,000. This means that any person who makes or receives cash payments of €10,000 or more, whether in a single transaction or in several linked transactions, is subject to customer due diligence and record-keeping obligations. The 4th AMLD also extends its applicability to providers of gambling services, which are now listed as ‘obliged entities’.

References:

Directive - 2015/849 - EN - Fourth Anti-Money Laundering Directive - EUR-Lex, Article 11 and Recital 23.

EUR-Lex - 02015L0849-20210630 - EN - EUR-Lex, Article 11 and Recital 23.

Key elements of the 4th EU Anti-Money Laundering Directive, Section: Cash payments.

Anti-money laundering and countering the financing of terrorism legislative package, Section: New EU AML/CFT Regulation.

According to the ACAMS study guide, one of the red flags for money laundering in cash-intensive businesses is “the presence of privately-owned ATMs on the premises” (p. 222). This could indicate that the business is using the ATM to deposit or withdraw large amounts of cash from illicit sources, or to facilitate the movement of funds across borders. The other options are not necessarily indicative of money laundering risk, as they could be explained by legitimate factors such as the change in customer preferences, the economic situation, or the expansion of the business.

References:

ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.

CFI. (2023)Money Laundering - Overview, How It Works, Example 1. Retrieved from https://corporatefinanceinstitute.com

CALERT. (2016)How Do Criminals Launder Money Through a Restaurant? 2. Retrieved from https://calert.info

A bank’s risk assessment is a process of identifying, measuring, and mitigating the potential risks that the bank faces in its operations, products, services, and customers. According to the ACAMS Study Guide, a bank should focus on the following areas when performing a risk assessment1:

The type and location of the institution’s clients. This involves analyzing the customer base, the types of accounts and transactions, the source and destination of funds, the level of due diligence and verification, and the risk profile of the customers. For example, a bank should consider whether its customers are individuals or entities, domestic or foreign, politically exposed persons, high-net-worth individuals, non-profit organizations, or cash-intensive businesses. The location of the customers may also indicate the level of exposure to money laundering, terrorist financing, sanctions, or tax evasion risks.

The nature and breadth of the services and products the institution provides. This involves evaluating the range and complexity of the products and services offered by the bank, the delivery channels, the payment methods, and the innovation and technology involved. For example, a bank should consider whether it offers wire transfers, correspondent banking, trade finance, private banking, trust and fiduciary services, prepaid cards, mobile banking, or cryptocurrency services. The nature and breadth of the services and products may also affect the level of transparency, traceability, and compliance of the transactions.

The geographic locations where the institution does business. This involves assessing the jurisdictions where the bank operates, where its customers reside, where its counterparties are located, and where the funds flow. For example, a bank should consider whether it has branches, subsidiaries, or affiliates in high-risk countries, whether it serves customers from high-risk countries, whether it engages in cross-border transactions, and whether it complies with the local laws and regulations of the countries where it does business. The geographic locations where the institution does business may also influence the level of exposure to political, legal, regulatory, or reputational risks.

References:

1: ACAMS Study Guide, Chapter 2: Risk Assessments, 1

This is the correct answer because the institution must ensure that the beneficiaries of the transfers are not on a terrorist watch list, such as the United Nations Security Council Consolidated List, the U.S. Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List, or the European Union Terrorism List. These lists contain the names of individuals, entities, and groups that are subject to sanctions or other measures due to their involvement or association with terrorism or terrorist financing. The institution must screen the beneficiaries of the transfers against these lists and report any matches or hits to the relevant authorities. Failing to do so may expose the institution to legal, regulatory, or reputational risks, as well as facilitate the financing of terrorism.

References:

ACAMS CAMS Certification Video Training Course1, Module 3: International AML/CTF Standards, Lesson 3.2: International AML/CTF Standards

ACAMS CAMS Study Guide, 6th Edition2, Chapter 3: International AML/CTF Standards, Section 3.2: International AML/CTF Standards, pp. 57-58

ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 3: International AML/CTF Standards, Section 3.2: International AML/CTF Standards, Slide 12

According to the guidance issued by the Financial Crimes Enforcement Network (FinCEN) and the federal banking agencies, a financial institution is legally permitted to discuss any aspects of the reported activity with the law enforcement officer who contacts them about the suspicious transaction report (SAR), as long as the officer provides appropriate credentials and a written request for the information. The financial institution is also legally permitted to send the deposit documents referenced in the SAR, as they are part of the supporting documentation that may be requested by law enforcement1

However, the financial institution is not legally permitted to provide copies of the customer’s loan documents or explain the customer’s loan payment history, as they are not directly related to the reported activity and may contain confidential information that is protected by privacy laws or contractual agreements. The financial institution should only disclose the minimum amount of information necessary to respond to the law enforcement request and should not volunteer any information that is not relevant or requested12

References:

1: Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering Considerations, FinCEN and Federal Banking Agencies, 2021, Question 1

2: The best practices for effective Suspicious Activity Reporting, The Payments Association, 2020