ACAMS Updated CAMS Exam Questions and Answers by ela

Section 319(a) of the USA PATRIOT Actenhancesregulatory oversight of foreign financial institutions with U.S. correspondent accounts.

Option A (Correct):This section requires foreign banks to provide relevant AML records within 120 hours upon request from a U.S. regulatory agency.

Option B (Incorrect):This describes Section 311, which deals with special measures against foreign jurisdictions or financial institutions.

Option C (Incorrect):This is covered under Section 319(b), which permits asset seizures from U.S. correspondent accounts.

Option D (Incorrect):This relates to Section 312, which mandates due diligence on foreign correspondent accounts and private banking.

Best Practices for Compliance with Section 319(a):

Ensure the ability to produce AML-related records within 120 hours.

Establish clear communication channels between correspondent banks.

Monitor foreign financial institution relationships for compliance risks.

TheBasel Committee’s AML guidelinesemphasizerisk-based customer due diligence (CDD) and beneficial ownership transparency.

Option A (Correct):CDD policies must be risk-basedto applyenhanced due diligence (EDD) for high-risk customersandsimplified due diligence (SDD) for low-risk customers.

Option C (Correct):Banksmust verify the identity of customers and beneficial ownersto prevent financial crime risks.

Why Other Options Are Incorrect:

Option B (Incorrect):Numbered accountsare not strictly prohibitedbut requirestrict transparency and due diligence measures.

Option D (Incorrect):CDD proceduresmust be risk-based, not uniform across all customers.

Option E (Incorrect):Transactionsshould not be processed until full due diligence is completed, except in rare cases where regulatory exceptions apply.

Best Practices for Risk-Based Customer Due Diligence:

Apply EDD for high-risk entities (e.g., PEPs, offshore companies).

Ensure full beneficial ownership transparency.

Implement ongoing transaction monitoring for risk assessment.

One of the central pillars of the EU AML Package adopted in June 2024 is theEU AML Regulation. This regulation introduces directly applicable AML/CFT rules across all EU member states, replacing the previous approach where AML directives were transposed into national laws. This shift addresses regulatory fragmentation and strengthens enforcement across borders.

The complete AML Package includes the following four pillars:

EU AML Regulation (directly applicable rulebook)

6th AML Directive (not the 7th)

Establishment of a new EU Anti-Money Laundering Authority (AMLA)

Revised Transfer of Funds Regulation, especially concerning crypto-asset service providers

The EU AML Regulation aims to unify and streamline the application of AML/CFT measures across the EU, ensuring a consistent and effective framework.

U.S. AML lawshave significantextraterritorial effectsdue tothe dominance of the U.S. dollar in global finance.

Option C (Correct):Section 319(b) of the USA PATRIOT Actallows theseizure of funds from foreign correspondent bank accountsin the U.S.

Option D (Correct):OFAC sanctionscan affectnon-U.S. entitiesif theyengage in prohibited transactions using U.S. dollars.

Option A (Incorrect):TheTravel Rule applies only to financial institutions under U.S. jurisdiction.

Option B (Incorrect):TheAML Act of 2020strengthensU.S. financial crime enforcement, butdoes not govern all USD transactions worldwide.