ACAMS Updated CAMS Exam Questions and Answers by obi

When a prosecutor instructs a bank to freeze the assets and bank accounts held by one of its clients, the bank must take the following actions:

Ensure the client and beneficiaries are unable to access any frozen assets during the freeze order. This means the bank must prevent any withdrawals, transfers, payments, or other transactions from the frozen accounts or assets. The bank must also notify the client and beneficiaries of the freeze order and the reason for it. The bank must comply with the freeze order until it is lifted by the court or the prosecutor12.

An affidavit must accompany the freeze order for the bank to comply with the request. An affidavit is a sworn statement that provides the legal basis and evidence for the freeze order. The affidavit must specify the name of the client, the amount and location of the assets to be frozen, the nature and source of the funds, the suspected criminal activity, and the legal authority for the freeze order3 .

The institution should obtain a copy of the court order to freeze the assets of the named individuals. A court order is a legal document that authorizes the bank to freeze the assets and accounts of the client. The court order must be signed by a judge or a magistrate and must include the same information as the affidavit. The bank should keep a copy of the court order for its records and to verify its validity .

References:

Frozen Bank Account: Here’s What You Need to Know

Why Is My Bank Account Frozen? - Investopedia

What Is a Frozen Account? What Causes It and How to Unfreeze It

[Freezing Orders - Practical Law]

[Freezing Orders - The Law Society]

[Freezing Orders - LexisNexis]

 According to the ACAMS CAMS Certification Study Guide (6th edition), one of the red flags for money laundering is the transfer of large sums of money to or from high-risk jurisdictions, especially if the transactions are inconsistent with the customer’s profile or business activity. Large payments to a beneficiary in a high-risk jurisdiction may indicate that the originator is involved in illicit activities such as tax evasion, fraud, corruption, or terrorism financing. Therefore, such payments should be escalated for further investigation and reporting1

References: 1: ACAMS CAMS Certification Study Guide (6th edition), page 64.

Mutual Legal Assistance (MLA) is a form of cooperation between different countries for the purpose of collecting and exchanging information and evidence in criminal matters. MLA is usually governed by bilateral or multilateral treaties that establish the procedures and requirements for requesting and providing assistance. The first valid step in the MLA process is to send a formal request from the central authority of the requesting country to the central authority of the requested country. The central authority is the designated entity that is responsible for making, receiving, and facilitating the execution of MLA requests. The request should contain the necessary information and documents to enable the requested country to assess and execute the request, such as the nature and purpose of the request, the legal basis, the description of the assistance sought, the identity of the persons involved, the applicable legal provisions, and the deadline for the response. The request may also be accompanied by a commission letter of request, which is a judicial document that authorizes a foreign authority to perform certain acts on behalf of the requesting authority, such as taking evidence or statements from witnesses or suspects.

References:

Guidelines on Mutual Legal Assistance in Criminal Matters, Section 1.1, 1.2, 1.3, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.16, 2.17, 2.18, 2.19, 2.20, 2.21, 2.22, 2.23, 2.24, 2.25, 2.26, 2.27, 2.28, 2.29, 2.30, 2.31, 2.32, 2.33, 2.34, 2.35, 2.36, 2.37, 2.38, 2.39, 2.40, 2.41, 2.42, 2.43, 2.44, 2.45, 2.46, 2.47, 2.48, 2.49, 2.50, 2.51, 2.52, 2.53, 2.54, 2.55, 2.56, 2.57, 2.58, 2.59, 2.60, 2.61, 2.62, 2.63, 2.64, 2.65, 2.66, 2.67, 2.68, 2.69, 2.70, 2.71, 2.72, 2.73, 2.74, 2.75, 2.76, 2.77, 2.78, 2.79, 2.80, 2.81, 2.82, 2.83, 2.84, 2.85, 2.86, 2.87, 2.88, 2.89, 2.90, 2.91, 2.92, 2.

Private investment companies (PICs) are potentially vulnerable to money laundering due to the difficulty in identifying the ultimate beneficial owners. PICs are often used to hold and manage private wealth, making them attractive targets for money launderers. Since these entities are privately held and not publicly traded, it can be challenging to identify the individuals who ultimately control or benefit from them. This makes it easier for money launderers to use them to disguise the origins of illicit funds.