ACAMS Updated CAMS Exam Questions and Answers by leyla

According to the Wolfsberg Financial Crime Principles for Correspondent Banking1, a shell bank is defined as a bank that has no physical presence in the jurisdiction in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective consolidated supervision. Physical presence means meaningful mind and management located within a country. The existence simply of a local agent or low level staff does not constitute physical presence. Therefore, a shell bank meets the criteria A, B, and D, as it does not conduct business at a fixed address, does not employ one or more individuals or maintain operating records at that address, and is not subject to inspection by the banking authority that licensed it. Criterion C is not specific to shell banks, as any bank, whether shell or not, may or may not be subject to AML laws that require it to implement an AML program, depending on the jurisdiction.

References:

Wolfsberg Financial Crime Principles for Correspondent Banking1, Section: Definitions, pp. 3-4.

The Financial Action Task Force (FATF) 40 Recommendations address the transparency and beneficial ownership of legal persons (such as companies, foundations, associations, etc.) and legal arrangements (such as trusts, fiducies, anstalts, etc.) in Recommendations 24 and 25. These recommendations aim to prevent the misuse of legal persons and arrangements for money laundering, terrorist financing and other illicit purposes, by requiring countries to ensure that accurate and up-to-date information on the natural persons who ultimately own or control them (the beneficial owners) is available to the competent authorities in a timely manner.

References:

CAMS Study Guide - 6th Edition, Chapter 4, page 112

CAMS Certification Exam Outline, Domain 1, Task 1.2, Skill 1.2.2

Guidance on Transparency and Beneficial Ownership, FATF, October 2014

Recommendation 24: Transparency and beneficial ownership of legal persons, FATF

[Recommendation 25: Transparency and beneficial ownership of legal arrangements], FATF

 Having inadequate privacy policies and procedures can expose an organization to legal risks such as industry or regulatory sanctions and charges of deceptive business practices. Industry or regulatory sanctions can result from violating the laws and regulations that govern data privacy and protection, such as the GDPR, the CCPA, or the GLBA. These sanctions can include fines, penalties, injunctions, or revocation of licenses. Charges of deceptive business practices can arise from misleading or false statements about how the organization collects, uses, or discloses personal data, or from failing to comply with its own privacy policies and procedures. These charges can lead to lawsuits, settlements, or enforcement actions by authorities such as the FTC or the state attorneys general.

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The 4 Biggest Risks of Non-Compliance With Data Privacy Regulations

Security and privacy laws, regulations, and compliance: The complete guide

An Ethical Approach to Data Privacy Protection