ACAMS Updated CAMS Exam Questions and Answers by juniper

 According to the Anti-Money Laundering Specialist (the 6th edition) study guide, structuring is a technique used by money launderers to avoid triggering currency transaction reporting requirements by breaking down large amounts of cash into smaller deposits that are below the reporting threshold1. Structuring can also involve withdrawing cash in small amounts from different locations or branches to evade detection and scrutiny2. Therefore, the compliance analyst is potentially identifying structuring as the type of money laundering in this case.

The scenario described in the question presents several indicators of potential money laundering through real estate, which the broker should be aware of and report accordingly. The most relevant red flags are:

Value: The student wants to buy a home that is overvalued, meaning that the asking price is higher than the market value or the appraisal value of the property. This could indicate that the student is trying to launder a large amount of illicit funds in one transaction, or that the seller is colluding with the student to inflate the price and receive a kickback. Overvaluing or undervaluing properties is a common technique used by money launderers to manipulate the price of real estate and conceal the source or destination of their funds12.

Inconsistency: The student’s behavior and profile are inconsistent with the typical characteristics of a legitimate home buyer. The student cancels the viewing of the home at the last minute due to illness, which could suggest a lack of interest or a pretext to avoid scrutiny. The student also wants to buy an expensive home despite being a student, which could indicate a discrepancy between the student’s income and the source of funds. Moreover, the student disregards the broker’s objections to the asking price, which could imply that the student is not concerned about the value or quality of the property, but rather the amount of money that can be laundered through it34.

Transaction speed: The student wants to quickly buy the home, which could indicate a sense of urgency or pressure to move the illicit funds before they are detected or seized by the authorities. Money launderers often use fast transactions to avoid raising suspicion or leaving a paper trail. Transaction speed is especially relevant when combined with other red flags, such as cash payments, anonymous buyers, or overvalued properties5 .

When investigating apotentially suspicious cross-border payment, a financial institution should followrisk-based due diligence procedures.

Option B (Correct):Sanctions screeningis critical to ensure theoriginator or beneficiaryisnot listed on OFAC, EU, UN, or other sanctions lists.

Option C (Correct):Requestingsupporting documents(e.g., invoices, contracts) helps determine whether the transaction isconsistent with the customer’s profile.

Option D (Correct):Conductingnegative news (adverse media) checkshelps identifyfinancial crime risks, such as fraud or money laundering.

Option A (Incorrect):Banksdo not directly calltransaction recipients unless there is a clear suspicion requiring customer verification.

Option E (Incorrect):314(b) requestsunder theUSA PATRIOT Actallow information sharing among U.S. financial institutions butcannot be used for foreign banks.

Financial institutionsoperating in the EU must comply with GDPR and AML directives, ensuring a balance betweenprivacy and AML compliance.

Option B (Correct):Data minimization is a key GDPR principle, ensuring that only necessary data is collected and processed.

Option D (Correct):Strict guidelines apply to AI and machine learning models used in AML complianceto prevent bias and ensure transparency.

Why Other Options Are Incorrect:

Option A (Incorrect):FIs cannot use third parties to supplement missing customer identification unless proper KYC measures are followed.

Option C (Incorrect):Customers cannot be informed about ongoing AML investigations due to “tipping off” restrictions under AML laws.

Best Practices for AML Compliance Under GDPR:

Limit data collection to what is necessary for AML compliance.

Ensure AI and machine learning models comply with transparency regulations.

Prevent unauthorized data access through strict internal controls.