ACAMS Updated CAMS Exam Questions and Answers by tia

According to the ACAMS CAMS Certification Study Guide (6th edition), senior management and the Board of Directors have the ultimate responsibility for the effectiveness of the AML program and the compliance with the relevant laws and regulations. Therefore, they should be informed of all significant STRs and the numbers and trends of the filings, as this would help them to assess the level of risk exposure and the adequacy of the controls and resources. The other options are either too restrictive or too burdensome for senior management and the Board of Directors, and may interfere with the timely and confidential filing of STRs.

A compliance officer should communicate with regulatory and law enforcement authorities in line with applicable local laws during an ongoing investigation into a client’s activities by a competent authority. This is because the compliance officer has a duty to cooperate with the authorities and provide relevant information and documents as requested, while also protecting the confidentiality and privacy of the client and the institution. The compliance officer should not restrict the communication to senior management only, as this could hinder the investigation or create a perception of obstruction. The compliance officer should not communicate only in writing, as this could limit the effectiveness and timeliness of the communication. The compliance officer should not limit the communication to the absolute minimum, as this could imply a lack of cooperation or transparency.

 The Financial Action Task Force (FATF) Recommendation that should cause an anti-money laundering specialist the most concern is B: Financial institutions should not keep anonymous accounts. This is because anonymous accounts are accounts that are opened or maintained without verifying the identity of the customer or the beneficial owner, or with fictitious or incomplete information. Anonymous accounts pose a high risk of money laundering and terrorist financing, as they can be used to conceal the origin, destination, and purpose of illicit funds, and to evade the detection and reporting of suspicious transactions. Therefore, the FATF Recommendation 10 requires financialinstitutions to identify and verify the identity of their customers and the beneficial owners, and to prohibit the opening or maintaining of anonymous accounts or accounts in obviously fictitious names1.

The other options are also FATF Recommendations, but they are less relevant or applicable to the scenario. Option A: Financial institutions should not warn their customers when information relating to them is being reported to the competent authorities, is the FATF Recommendation 21, which aims to prevent tipping-off, i.e., alerting the customer that they are being investigated or reported for money laundering or terrorist financing. However, this does not directly address the issue of identity verification or anonymous accounts2. Option C: Financial institutions should maintain all necessary suspicious transaction report records on transactions, both domestic and international, for at least 5 years, is the FATF Recommendation 11, which aims to ensure that financial institutions have adequate and consistent records of their customers and transactions, and that these records are available to the competent authorities when needed. However, this does not prevent the opening or maintaining of anonymous accounts in the first place3. Option D: If financial institutions suspect that funds stem from criminal activity,they should be required to close the account, is not a FATF Recommendation, but rather a possible action that financial institutions may take in accordance with their risk assessment and policies. However, the FATF does not mandate or recommend the closure of accounts as a general rule, and advises that financial institutions should consult with the competent authorities before taking such action, as it may alert the customer or compromise the investigation4.

The board of directors is ultimately responsible for ensuring that the financial institution has an effective anti-money laundering program that complies with the applicable laws and regulations. If the institution receives a regulatory enforcement action, the board should take prompt and corrective actions to address the deficiencies and mitigate the risks of further violations or penalties. One of the most important actions is to instruct the compliance officer to develop a plan to remediate the institution’s anti-money laundering program, which should include a root cause analysis, a gap assessment, a timeline, and a budget. The board should also monitor the implementation and progress of the remediation plan, and communicate with the regulators on a regular basis.

The other options are not appropriate actions for the board of directors to take in response to a regulatory enforcement action. Terminating the compliance officer and staff may not solve the underlying issues of the anti-money laundering program, and may create more disruption and instability. Purchasing and installing a new suspicious activity monitoring system may not be necessary or sufficient to address the deficiencies, and may entail additional costs and challenges. Hiring an attorney to protest the enforcement action may not be in the best interest of the institution, and may antagonize the regulators and escalate the situation.