ACAMS Updated CAMS Exam Questions and Answers by alissa

Wider exposure to organized crime and corruption: When individuals or communities are exposed to organized crime networks or corrupt practices, they may become more susceptible to engaging in illicit activities. Organized crime groups often exploit vulnerabilities, leading to money laundering.

Weaker development of economy and job opportunities: In regions with limited economic growth and scarce job prospects, individuals may turn to illicit activities as a means of survival. Poverty and lack of legitimate income sources can drive people toward money laundering.

These two options are indicative of money laundering red flags associated with money service businesses, as they may suggest attempts to avoid reporting requirements, conceal the source or destination of funds, or use false or stolen identities. Money service businesses are vulnerable to money laundering due to the high volume and anonymity of transactions, the ease of cross-border transfers, and the lack of effective regulation and supervision in some jurisdictions12. Therefore, they should implement robust anti-money laundering policies and procedures, and monitor and report any suspicious activity.

 A financial institution should consult with its legal counsel before responding to a grand jury subpoena regarding a customer, as such subpoenas may involve complex legal issues and potential conflicts of interest. A grand jury subpoena is a legal order issued by a federal or state grand jury that compels a person or entity to produce documents, testify, or both, in connection with a criminal investigation. A financial institution that receives a grand jury subpoena should not disclose its existence or contents to the customer or any third party, unless authorized by law or the court, as doing so may constitute obstruction of justice or violate the secrecy rules of the grand jury. A financial institution should also assess and review all relevant information it has aboutthe customer that is the subject of the subpoena, in accordance with its risk-based AML program, and consider filing a SAR if it identifies any suspicious activity.

Financial institutions (FIs) are required to cooperate with law enforcement agencies (LEAs) in their investigations of money laundering, terrorist financing, and other financial crimes. However, sometimes LEAs may submit requests for information or documents that are overly broad, unduly intrusive, or unreasonable in scope or volume. Such requests may pose challenges or risks for FIs, such as violating customer privacy, compromising data security, disrupting business operations, or incurring excessive costs.

The most appropriate response for an FI in such a situation is to narrow the request through a prompt response to the LEA. This means that the FI should communicate with the LEA as soon as possible to clarify the purpose, scope, and relevance of the request, and to negotiate a more reasonable and proportionate request that meets the LEA’s needs and the FI’s capabilities. The FI should also explain the potential difficulties or consequences of complying with the original request, and propose alternative or additional sources of information that may be more useful or accessible. The FI should document the communication and the agreed terms of the request, and comply with the request in a timely and accurate manner.

By narrowing the request through a prompt response, the FI can demonstrate its good faith and willingness to cooperate with the LEA, while also protecting its own interests and obligations. This can help avoid or resolve any conflicts or misunderstandings between the FI and the LEA, and facilitate a more efficient and effective investigation.