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

Ongoing Due Diligence: FATF emphasizes the importance of continuous monitoring of business relationships and transactions. This involves regularly assessing the risk associated with a customer and ensuring that the information remains up-to-date. It includes monitoring transactions for any suspicious activity or red flags.

Beneficial Owners: Identifying beneficial owners is crucial, but it must be done with verification of their true identity. This is part of the initial due diligence process.

Risk Assessment: Conducting risk assessments is essential, but it is not specific to customer due diligence. Risk assessment applies broadly to anti-money laundering (AML) programs.

Products and Services Suitability: While understanding the suitability of products and services is relevant, it is not a direct measure within customer due diligence.

References:

Anti-Money Laundering Specialist (the 6th edition) resources.

FATF 40 Recommendations (Recommendation 10: Customer Due Diligence).1

CFATF Technical Articles (Customer Due Diligence Measures).2

Paying a large amount in cash for an art purchase is a typical red flag of potential money laundering, as it may indicate an attempt to avoid traceability and reporting requirements. Cash transactions are often used by criminals to launder illicit funds, as they are difficult to track and verify. According to the FATF guidance on money laundering and terrorist financing risks in the art trade, cash payments above a certain threshold should be subject to enhanced due diligence and reporting obligations by art market participants (AMPs). AMPs should also be wary of customers who provide insufficient or inconsistent information about the source of funds, the purpose of the transaction, or the identity of the beneficial owner.

References:

Money Laundering and Terrorist Financing Risks and Vulnerabilities Associated with Gold, FATF, July 2023, p. 22-23.

Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals, FATF, June 2023, p. 38-39.

Red Flags Money laundering and terrorist financing risks, Responsible Art Market, 2017, p. 2.

The Basel Committee on Banking Supervision’s Customer Due Diligence for Banks Paper recommends that banks should verify the bank has a physical presence in the country where it is incorporated and confirm the bank is subject to regulatory supervision with adequate anti-money laundering laws before opening a correspondent account. These steps are intended to prevent the establishment of relationships with shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. Shell banks pose a high risk of money laundering and terrorist financing, as they can be used to hide the identity and source of funds, evade regulatory oversight, and facilitate illicit transactions. Therefore, banks should conduct enhanced due diligence on correspondent banks that operate in offshore jurisdictions, where the regulatory standards and transparency may be lower or insufficient.

References:

ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4, Section 4.3.1, p. 1091

ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 2, Task 2.2, p. 52

Basel Committee on Banking Supervision, Customer Due Diligence for Banks, October 2001, p. 13-143

A personal banking customer who simultaneously opens several accounts with almost identical names will most likely cause further inquiry, as this could indicate an attempt to evade transaction monitoring, reporting, or identification requirements. For example, a customer could open accounts with slight variations of their name, such as John Smith, Jon Smith, J. Smith, or John Smyth, to avoid detection or aggregation of their transactions. This could also be a sign of identity theft, fraud, or money muling. Therefore, the bank should verify the customer’s identity and the purpose of the accounts, and monitor the activity for any suspicious patterns or behaviors.

References:

ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4, Section 4.2.2, p. 1051

ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 2, Task 2.1, p. 52

FATF Guidance on the Risk-Based Approach for the Banking Sector, October 2014, p. 353

 A deferred prosecution agreement (DPA) is a type of enforcement action that allows a financial institution to avoid criminal prosecution if it admits to wrongdoing, pays a fine, and agrees to remediate its AML program deficiencies within a specified period of time1. A cease and desist order (C&D) is another type of enforcement action that requires a financial institution to stop engaging in unsafe or unsound practices or violations of law, and to take corrective actions to address its AML program weaknesses2. Both of these actions are commonly used by regulators to address serious or systemic AML program failures by financial institutions, as evidenced by recent cases345.

References:

1: Deferred Prosecution Agreement - Wikipedia

2: FFIEC BSA/AML Appendices - Appendix R – Enforcement Guidance

3: FinCEN Announces $15 Million Civil Money Penalty against Bancrédito International Bank for Willful Violations of the Bank Secrecy Act

4: Lessons From The Seven Largest AML Bank Fines In 2021

5: Fines for AML Compliance Failures - ACAMS Today