ACAMS Updated CAMS Exam Questions and Answers by niall

 According to the FATF Recommendation 12, financial institutions should take reasonable measures to determine whether the beneficiaries of a life insurance policy and/or, where required, the beneficial owner of the beneficiary are politically exposed persons. This should occur at the latest at the time of the payout1. The purpose of this requirement is to prevent the abuse of life insurance products for money laundering or terrorist financing by PEPs or their associates. Therefore, the best way to mitigate the risk of adding a beneficiary to a life insurance policy for a foreign PEP is to perform due diligence on the beneficiary, such as verifying their identity, relationship with the PEP, and source of funds2.

The other options are not correct because they either do not comply with the FATF standards, or do not adequately address the risk of adding a beneficiary to a life insurance policy for a foreign PEP. Determining the source of wealth and source of funds is a measure that should be applied to the PEP as the customer, not the beneficiary, as partof the enhanced due diligence process2. Declining the request if the beneficiary is a foreign PEP may not be feasible or proportional, as not all foreign PEPs are involved in money laundering or terrorist financing, and some may have legitimate reasons to add a beneficiary to their life insurance policy. Declining the request to add a beneficiary due to increased risk may also not be feasible or proportional, as it may violate the contractual rights of the PEP as the customer, and may not be necessary if the due diligence on the beneficiary does not reveal any red flags or suspicions.

 https://complyadvantage.com/insights/peps-life-insurance/

https://www.cfatf-gafic.org/index.php/documents/fatf-40r/378-fatf-recommendation-12-politically-exposed-persons

Bringing $15,000 worth of chips into the casino is a red flag because it could indicate that the customer is trying to avoid the currency transaction reporting (CTR) requirement for cash transactions over $10,0001. Requesting a wire transfer to an unrelated third party is another red flag because it couldindicate that the customer is trying to conceal the source or destination of the funds, or transfer them to a high-risk jurisdiction2.

1: ACAMS CAMS Certification Video Training Course, Module 3: Casinos and Gaming, Section 3.1: Regulatory Requirements, Slide 8 2: ACAMS CAMS Certification Video Training Course, Module 3: Casinos and Gaming, Section 3.2: Money Laundering Methods and Red Flags, Slide 11

 the account officer should avoid disclosing any details of the investigation to the customer, as this could compromise the integrity of the law enforcement inquiry, or even constitute tipping off, which is a criminal offense in many jurisdictions12. The account officer should only inform the customer that a legal request has been made, and that the bank is obliged to comply with it, without revealing the nature or scope of the request3. The account officer should also document the communication with the customer, and report it to the appropriate internal authority, such as the compliance officer or the legal department4.

1: CAMS Study Guide, 6th Edition, Chapter 5: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), page 151-152. 2: Tipping Off: What It Is and How to Avoid It, ACAMS Today, March 2019. 3: How to Handle Law Enforcement Requests, ACAMS Webinar, June 2018. 4: Best Practices for Responding to Law Enforcement Inquiries, ACAMS White Paper, October 2017.

According to the CAMS study guide, chapter 4, page 851, bearer shares are shares that do not have the name of the owner registered on them, and the ownership is transferred by the physical delivery of the share certificate. This means that the true beneficial owner of the company can be hidden or changed without any record or notification. Bearer shares are considered a high-risk factor for money laundering and terrorist financing, as they can facilitate the movement and concealment of illicit funds through anonymous corporate vehicles. Therefore, the company having bearer shares should cause the most suspicion of money laundering among the options given.

The other options are not necessarily indicative of money laundering, although they may have some risk implications depending on the context and the customer profile. Option A, the jurisdiction being a known tax haven, may suggest that the company is seeking to avoid or minimize taxes, but this does not imply that the company is involved in money laundering, as there may be legitimate tax planning or optimization purposes. Option C, the corporation director being a European citizen, may indicate that the company has some cross-border or international activities, but this does not imply that the company is involved in money laundering, as there may be valid business or personal reasons for the director’s nationality. Option D, no financial statements being filed for 3 years, maysuggest that the company is not complying with the accounting or reporting standards of the jurisdiction, but this does not imply that the company is involved in money laundering, as there may be other explanations or mitigating factors for the lack of financial statements.

1: ACAMS CAMS Study Guide - 6th Edition, Chapter 4, page 85: https://www.acams.org/wp-content/uploads/2019/09/ACAMS-CAMS-Study-Guide-6th-Edition-Chapter-4.pdf