ACAMS Updated CAMS Exam Questions and Answers by hettie

The Office of Foreign Assets Control (OFAC) is the U.S. Treasury Department’s agency that administers and enforces economic sanctions programs against countries, groups, and individuals that pose a threat to the national security, foreign policy, or economy of the U.S. OFAC’s requirements have an extraterritorial reach because they apply not only to U.S. persons (citizens, permanent residents, entities, and those physically present in the U.S.), but also to any person or entity that engages in a transaction that has a connection to the U.S., such as using the U.S. financial system, U.S. goods, or U.S. persons. This means that intermediaries of a transaction with a U.S. nexus, such as foreign banks, brokers, or agents, are required to comply with OFAC’s regulations and may face penalties for violating them. OFAC’s jurisdiction does not depend on the registration or incorporation of an entity in the U.S., nor does it extend to foreign financial intelligence units, unless they are involved in a transaction with a U.S. nexus.

Mutual Legal Assistance Treaties (MLATs) are characteristics of D. only involving two countries, E. cooperatively combating crime between countries, and F. being useful for gathering evidence and intelligence in a foreign country. MLATs are public and binding under international law (A), can be used for obtaining banking records from treaty partners (B), and provide a legal basis for transmitting evidence ©.

According to the USA PATRIOT Act, US authorities do have the power to subpoena records from foreign banks that maintain correspondent accounts with US banks. This is known as a "section 314(a) request," which allows law enforcement to obtain information related to suspected terrorist financing or money laundering.

However, US authorities are not limited to seizing only funds transferred under OFAC sanctions if there is an equivalent UN sanctions regime that has been contravened. The US government can impose its own sanctions that are independent of the UN, and can seize funds or take other actions to enforce those sanctions.

Therefore, the correct answers to the question are A and C:

A. If the funds are seized, then the foreign bank would be within its rights to dispute such seizure. C. The USA PATRIOT Act authorizes the Secretary of the Treasury or the Attorney General to subpoena records from the foreign bank that maintains a correspondent account with a US bank.

The threat of US sanctions against foreign individuals and entities continues to exist despite the absence of a US nexus. This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 591, which states: “It is important to note that the threat of US sanctions against foreign individuals and entities continues to exist even when there is no direct US nexus (i.e., no US persons or assets involved).”