ACAMS Updated CAMS Exam Questions and Answers by gideon

According to the FATF 40 recommendations, the focus of AML efforts has been expanded beyond financial institutions to include other businesses and professions that are vulnerable to money laundering and terrorist financing risks. These include:

Casinos, when customers engage in financial transactions equal to or above a designated threshold. Casinos are required to identify and verify the identity of their customers, keep records of transactions, report suspicious transactions, and implement internal controls and compliance programs to prevent money laundering and terrorist financing. The designated threshold is USD/EUR 3,000 or more1.

Real estate agents, when they are involved in transactions for clients concerning buying and selling properties. Real estate agents are required to identify and verify the identity of their customers and beneficial owners, keep records of transactions, report suspicious transactions, and implement internal controls and compliance programs to prevent money laundering and terrorist financing. Real estate transactions can involve large amounts of money and complex legal arrangements that can be used to conceal the source or destination of illicit funds2.

Trust and company service providers, when they prepare for or carry out transactions for a client concerning the creation, operation or management of legal persons or arrangements. Trust and company service providers are required to identify and verify the identity of their customers and beneficial owners, keep records of transactions, report suspicious transactions, and implement internal controls and compliance programs to prevent money laundering and terrorist financing. Trust and company service providers can facilitate the misuse of legal persons or arrangements, such as shell companies or trusts, to hide the true ownership and control of assets or funds3.

The other option, dealers in art, when they engage in any cash transaction with a customer at or above a designated threshold, is not covered by the FATF 40 recommendations. However, dealers in precious metals and stones are covered when they engage in any cash transaction with a customer at or above a designated threshold of USD/EUR 15,000 or more. Dealers in art may be subject to national or regional regulations that impose AML obligations on them, depending on the jurisdiction.

References:

FATF Recommendation 22: Designated Non-Financial Businesses and Professions: Customer Due Diligence

FATF Recommendation 23: Designated Non-Financial Businesses and Professions: Other Measures

FATF Recommendation 24: Transparency and Beneficial Ownership of Legal Persons

[FATF Recommendation 25: Transparency and Beneficial Ownership of Legal Arrangements]

Wash trading is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled. Wash trading is a form of market manipulation that creates artificial trading activity and volume, and may be used to evade taxes, inflate prices, or launder money. Wash trading can also involve the use of third parties or intermediaries to conceal the true identity and source of funds of the trader.

References: = The main references for this question are the following sources:

The document titled “Money Laundering and Terrorist Financing Typologies and Trends in Canadian Securities Dealers” published by the Investment Industry Regulatory Organization of Canada (IIROC) in December 2019. You can access it by clicking here. This document states that “Wash trading is a form of market manipulation where an individual simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. Wash trading is illegal under securities law because it misleads investors and regulators about the true supply and demand of the securities involved. Wash trading can also be used to evade taxes, inflate prices, or launder money.”

The document titled “Market Manipulation” published by the Financial Industry Regulatory Authority (FINRA). You can access it by clicking here. This document states that “Wash sales are a form of market manipulation in which an investor simultaneously sells and buys the same security to create misleading, artificial activity in the marketplace. Wash sales are illegal under Section 9(a)(1)(A) of the Securities Exchange Act of 1934. Wash sales can be used to manipulate the price of a security, evade taxes, or launder money.”

purchasing a low volume of chips with cash and turning them in for a casino check is a common technique of money laundering in casinos. This method allows the launderer to convert “dirty” money into physical casino chips, which are then played with for a short while, and then cashed out as “clean” money in the form of a check. This way, the launderer can avoid the reporting requirements and the traceability of cash transactions.

References:

ACAMS CAMS Certification Video Training Course - Exam-Labs1

Understanding Money Laundering in Casinos | ComplyAdvantage2

Casino Money Laundering: Red Flag Indicators - Alessa3

 According to the Anti-Money Laundering Specialist (the 6th edition) study guide, when a financial institution receives a law enforcement inquiry, it should cooperate as much as possible and respond to all formal requests for information, unless there is a valid objection that can and should be made1. The institution should also file a suspicious transaction report (STR) if the inquiry or the customer’s activity triggers any red flags or indicators of money laundering or other financial crimes2. Additionally, the institution should monitor the account for suspicious activity and review the money laundering risk posed by the account, as these are part of the ongoing due diligence and risk assessment processes3. Closing the account immediately is not a recommended action, as it may alert the customer or interfere with the investigation4.

References:

1: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 121

2: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 122

3: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 123

4: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 124