ACAMS Updated CAMS Exam Questions and Answers by hettie

According to the Anti-Money Laundering Specialist (the 6th edition) resources, one of the essential elements of an effective AML program is the establishment of a written AML policy that sets out the bank’s commitment to comply with the applicable AML laws and regulations, as well asthe roles and responsibilities of the board of directors, senior management, and staff in implementing the AML program. The AML policy should also include the bank’s risk assessment, customer due diligence, transaction monitoring, record keeping, reporting, training, and audit procedures. The AML policy should be approved by the board of directors and communicated to all staff from the top down. The other options are not incorrect, but they are not the primary responsibility of the board of directors in demonstrating commitment to AML compliance.

Arobust customer identification programis critical in preventing money laundering and financial crime.

Option B (Correct):Understanding the nature and purpose of a customer’s business helps banks assess thelegitimacyof financial activity and identify potential risks.

Option D (Correct):Understandingwhya customer selects a particular bank provides insights intopossible risk factors, such as jurisdictional concerns or access to certain financial instruments.

Option A (Incorrect):Limiting online activities is not a standard CDD (Customer Due Diligence) measure. Risk-based controls are applied but do not involve blanket restrictions.

Option C (Incorrect):While online verification is useful,in-person or government-sourced verificationis preferred.

 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 about the 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.

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.