ACAMS Updated CAMS Exam Questions and Answers by poppie

Money laundering can have serious consequences for financial institutions. They may face increased investigation costs and fines from regulators and law enforcement agencies for failing to detect or prevent money laundering activities. Additionally, money laundering can result in a loss of profitable business as customers and counterparties may no longer want to do business with the institution due to its reputation for being associated with illicit activity.

Gatekeepers (e.g., accountants, auditors, lawyers) play a critical role in detecting financial crime.

Option B (Correct):Corporate clientsposehigher money laundering risksdue tocomplex ownership structures and cross-border financial activities.

Option C (Correct):The nature of requested services(e.g.,offshore structuring, large cash transactions) can indicate potentialmoney laundering attempts.

Why Other Options Are Incorrect:

Option A (Incorrect):The length of time a client has been with an accounting firm does not necessarily indicate financial crime risk.

Option D (Incorrect):Short-term relationships may be high-risk, but understanding the business type and services requested is more critical.

Red Flags for Money Laundering in Professional Services:

Clients requesting offshore structures for no apparent business reason.

Use of complex trusts or nominee directors to obscure ownership.

Unexplained large transactions moving through legal or accounting firms.

Best Practices for Gatekeepers to Prevent Money Laundering:

Perform Enhanced Due Diligence (EDD) on high-risk clients.

Report unusual financial activity to FIUs.

Follow FATF’s DNFBP (Designated Non-Financial Businesses and Professions) AML guidelines.

According to the ACAMS CAMS Study Guide (the 6th edition), FIUs are central agencies that receive, analyze, and disseminate financial intelligence to support the detection and prevention of money laundering, terrorist financing, and other financial crimes1. FIUs have different legal powers and functions depending on their type and jurisdiction, but generally they can use various investigative techniques, such as requesting additional information from reporting entities, accessing databases, conducting analysis, and issuing guidance12. FIUs also have access to a wide range of financial information, such as suspicious activity reports, currency transaction reports, cross-border cash declarations, and other relevant data sources, to identify and assess potential illicit activities13. Moreover, FIUs can cooperate and exchange information with domestic andforeign counterparts, subject to certain legal and operational safeguards, to facilitate cross-border investigations and prosecutions of financial crimes14.

The Egmont Group is an international body of Financial Intelligence Units (FIUs) from around the world. Its primary purpose is to serve as a forum for FIUs to exchange information, and it also sets international standards for AML/CFT measures. Additionally, the Egmont Group does not serve as a prudential regulator for global financial institutions or as an authoritative body in the field of anti-corruption.