ACAMS Updated CAMS Exam Questions and Answers by mae

The Black Market Peso Exchange (BMPE) is a trade-based money laundering technique commonly used by narcotics traffickers based in Colombia and Mexico. The central feature is the use of a money trader to ensure that the revenue from drug sales in the U.S.doesn’t actually cross any borders. Instead, those dollars are used to purchase any number of legitimate commodities from unsuspecting businesses on behalf of legitimate South American businesspersons, whose legitimate imports are used to obtain pesos for the drug cartels12. The BMPE involves six distinct steps:

Obtaining criminal proceeds: The drug cartels sell drugs for dollars in the U.S.

Involvement of intermediary services: The drug cartels sell the dollars to black market peso exchangers in Colombia at a discounted rate.

Identification of complicit companies: The black market peso exchangers identify exporting companies in the U.S. and importing companies in South America that are willing to participate in the scheme.

Placement of funds: The black market peso exchangers deposit the dollars into U.S. bank accounts or use money service businesses or other methods to transfer the funds.

Layering of funds: The black market peso exchangers use the funds to purchase monetary instruments such as checks, money orders, or wire transfers, or to pay for the goods ordered by the South American importers.

Integration of funds: The South American importers receive the goods or the monetary instruments and use them to pay for their imports or to sell them for pesos in the local market.

1: Black Market Peso Exchange in Money Laundering - Financial Crime Academy

2: Overview - FinCEN.gov

Online banking is vulnerable to all three stages of money laundering, namely placement, layering, and integration, because it allows the movement of funds across different accounts, jurisdictions, and institutions with speed, anonymity, and convenience. Online banking can facilitate the following money laundering methods:

Placement: The initial stage of money laundering, where illicit funds are introduced into the financial system. Online banking can enable placement by allowing the deposit of cash or checks through ATMs, mobile devices, or remote deposit capture, or the transfer of funds from prepaid cards, digital wallets, or cryptocurrencies to bank accounts.

Layering: The second stage of money laundering, where illicit funds are moved, disguised, or concealed to obscure their origin and ownership. Online banking can enable layering by allowing the transfer of funds between multiple accounts, often in different jurisdictions or currencies, or the purchase of financial products or services, such as money orders, wire transfers, or online gambling, that create complex transaction trails.

Integration: The final stage of money laundering, where illicit funds are reintroduced into the legitimate economy as apparently legal income or assets. Online banking can enable integration by allowing the transfer of funds to legitimate businesses, investments, or charities, or the purchase of goods or services, such as real estate, luxury items, or travel, that provide a cover for the source of funds.

ACAMS CAMS Certification Video Training Course1, Module 2: Money Laundering Risks and Methods, Lesson 2.1: The Three Stages of Money Laundering

ACAMS CAMS Study Guide, 6th Edition2, Chapter 2: Money Laundering Risks and Methods, Section 2.1: The Three Stages of Money Laundering, pp. 29-34

ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 2: Money Laundering Risks and Methods, Section 2.1: The Three Stages of Money Laundering, Slides 9-13

Cash couriers are individuals who physically transport cash or other monetary instruments across borders or within a country, often to avoid detection by authorities or reporting obligations. Cash couriers are a common method used by terrorist financiers to move funds without leaving an audit trail, as cash is anonymous, portable, and widely accepted12.

1: ACAMS CAMS Certification Video Training Course, Module 4: Terrorist Financing, Section 4.2: Methods of Terrorist Financing, Slide 9 2: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4: Terrorist Financing, Page 97

According to the Financial Action Task Force (FATF) 40 Recommendations, countries should implement measures to prevent the abuse of non-profit organizations (NPOs) for the financing of terrorism. One of these measures is to ensure that NPOs cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists’ organizations. This means that countries should have effective mechanisms to monitor and supervise NPOs, especially those that are at risk of terrorist financing abuse, and to take appropriate actions against NPOs that are involved in such activities. Countries should also ensure that NPOs maintain adequate records of their activities and transactions, and that these records are accessible to competent authorities. Furthermore, countries should promote transparency and accountability in the NPO sector, and encourage NPOs to conduct due diligence on their donors, beneficiaries, and associates.

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FATF 40 Recommendations, Recommendation 8 and Interpretive Note to Recommendation 8

Best Practices on Combating the Abuse of Non-Profit Organisations, FATF, June 2015

COMBATING THE ABUSE OF NON-PROFIT ORGANISATIONS (RECOMMENDATION 8), FATF, June 2015