ACAMS Updated CAMS Exam Questions and Answers by ilyas

According to the Anti-Money Laundering Specialist (the 6th edition) study guide, the Financial Action Task Force (FATF) is an inter-governmental body that sets the global standards for anti-money laundering and counter-terrorist financing (AML/CTF). The FATF also monitors the compliance and implementation of its recommendations by its members and other jurisdictions. To enhance its global reach and effectiveness, the FATF works with nine FATF-style regional bodies (FSRBs) that cover different regions of the world. These FSRBs have similar objectives and functions as the FATF, but they also take into account the specific characteristics and challenges of their regions. Two ways that FSRBs influence AML/CTF standards within their respective regions are:

They issue typologies specific to their geographical region. Typologies are reports or studies that analyze the methods, trends, and patterns of money laundering and terrorist financing in a particular sector, industry, or region. FSRBs produce typologies that reflect the regional context and risks of their members and provide guidance and best practices to address them. For example, the Asia/Pacific Group on Money Laundering (APG) has issued typologies on trade-based money laundering, wildlife trafficking, and virtual assets in the Asia-Pacific region12.

They administer mutual evaluations of participating members. Mutual evaluations are peer reviews that assess the level of compliance and effectiveness of a country’s AML/CTF system against the FATF standards. FSRBs conduct mutual evaluations of their members and publish the results and recommendations in detailed reports. These reports help identify the strengths and weaknesses of each country’s AML/CTF regime and provide a basis for follow-up actions and technical assistance. For example, the Caribbean Financial Action Task Force (CFATF) hasconducted mutual evaluations of its members such as Barbados, Jamaica, and Trinidad and Tobago34.

Anti-Money Laundering Specialist (the 6th edition) study guide, page 27

APG website, section on Typologies

Anti-Money Laundering Specialist (the 6th edition) study guide, page 28

CFATF website, section on Mutual Evaluations

payments received on the account that reference unknown companies in the instructions indicate a possible attempt to obscure the source or purpose of the funds. This could be a sign of money laundering, tax evasion, fraud, or other illicit activities. Such payments should be referred to AML Investigations for further review and verification of the identity and legitimacy of the companies involved.

FATF Guidance on the Risk-Based Approach for Dealers in Precious Metals and Stones, page 18, paragraph 57: “The dealer should also pay attention to the information provided by the customer on the source and origin of the funds or assets, and verify it where possible. For example, the dealer should be alert to situations where the customer provides vague, incomplete or inconsistent information about the source and origin of the funds or assets, or where the information provided does not match with the customer’s profile or business activity.”

Risk-Based Approach For Dealers in Precious Metals and Stones (DPMS), section “Business-based risk approach”, sub-section “2- Geographical location”: “You must also assess the geographical location of your business and the countries you deal with. You must be aware of the countries that are high-risk or non-cooperative jurisdictions as per the FATF recommendations. You must also consider the countries that are subject to sanctions, embargoes, or similar measures issued by the United Nations, the European Union, or any other relevant organization. You must also be careful of the countries that are known to have significant levels of corruption, organized crime, or terrorist activity.”

What are the Risks of Money Laundering for Precious Metals Dealers?, section “Money Laundering Red Flags for DPMS”, bullet point 4: “The customer provides vague, incomplete, or inconsistent information about the source and origin of the funds or assets.”

According to the risk-based approach, financial institutions should apply enhanced due diligence and ongoing monitoring to higher-risk clients, and take appropriate measures to mitigate the risks of money laundering and terrorist financing. If the client exceeds the criteria of an acceptable risk model created by the institution, the institution shouldcommunicate the issues to the client and request remedial actions, such as providing additional information, documentation, or evidence of compliance. If the client does not cooperate or comply with the institution’s requirements, the institution should consider terminating the relationship with the client, as the risk may outweigh the benefits of continuing the business relationship.

ACAMS CAMS Certification Package - 6th Edition, Chapter 2: Risk Assessments, pp. 51-521

ACAMS CAMS Certification Package - 6th Edition, Chapter 4: Customer Due Diligence, pp. 97-981

ACAMS CAMS Certification Video Training Course, Module 2: Risk Assessments, Lesson 2.3: Risk-Based Approach2

ACAMS CAMS Certification Video Training Course, Module 4: Customer Due Diligence, Lesson 4.3: Enhanced Due Diligence

the Office of Foreign Assets Control (OFAC) has the authority to prohibit or reject any trade or financial transactions involving specified countries, entities, and individuals that are subject to U.S. economic sanctions, unless such transactions are authorized by a general or specific license issued by OFAC. This applies to transactions that occur within the U.S. territory, as well as transactions that involve U.S. persons, U.S. goods, or the U.S. financial system, regardless of where they take place. This is one of the key aspects of OFAC’s extraterritorial reach, which means that OFAC can enforce its sanctions programs beyond the U.S. borders.

Home | Office of Foreign Assets Control, section “Mission”: “The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.”

The Aggressive Extraterritorial Reach of U.S. Economic Sanctions: Foreign Company Exposure to OFAC Enforcement, section “A. Bases for OFAC jurisdiction over foreign parties”, paragraph 1: “One key aspect of the Office of Foreign Assets Control’s extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity.”

The global reach of OFAC sanctions, section “The global reach of OFAC sanctions”, paragraph 1: “OFAC sanctions are trade and economic sanctions administered by The U.S. Treasury Department’sOffice of Foreign Asset Control (OFAC). They are often intended to have extra-territorial effect, meaning that they apply outside the U.S. territory. In some instances a connection with the U.S. territory is required.”

"Prohibit or reject unlicensed trade and financial transactions with specified countries,

entities, and individuals. "