ACAMS Updated CAMS Exam Questions and Answers by hoorain

According to the Wolfsberg Anti-Money Laundering Principles for Private Banking (2012), the bank should have a clear policy on how to deal with intermediaries, such as lawyers, accountants, trust and company service providers, or other financial institutions, that introduce or manage clients on behalf of the bank. The policy should reflect the following aspects1:

The bank should perform due diligence on the intermediary itself, including its ownership, reputation, regulatory status, and AML policies and procedures.

The bank should obtain the identity and beneficial ownership information of the clients introduced or managed by the intermediary, and verify them using reliable and independent sources, unless there are legal or regulatory impediments to do so.

The bank should assess the level of due diligence performed by the intermediary on its clients, and determine whether it is equivalent or comparable to the bank’s own standards. If not, the bank should perform additional due diligence on the intermediary’s clients, or decline to accept them.

The bank should monitor the transactions and activities of the clients introduced or managed by the intermediary, and report any suspicious or unusual activity to the relevant authorities.

Option B is consistent with these aspects, as it states that the bank must obtain the same type of information with respect to an introduced client that would otherwise be obtained by the bank, absent the involvement of the intermediary. This ensures that the bank has a sufficient understanding of the client’s identity, source of wealth, and risk profile, and can apply appropriate AML measures.

Option C is also consistent with these aspects, as it states that where an intermediary manages assets on behalf of a number of clients and is the account holder with the bank, but that intermediary does not conduct the same level of due diligence as the bank, it is necessary for the bank to undertake due diligence on the intermediary’s clients. This ensures that the bank does not rely solely on the intermediary’s due diligence, and can identify and mitigate any potential money laundering risks associated with the clients.

Option A is not consistent with these aspects, as it states that when an intermediary introduces clients to the bank, it is not necessary for the bank to perform due diligence on the intermediary’s clients. This contradicts the principle that the bank should obtain and verify the identity and beneficial ownership information of the clients introduced by the intermediary, unless there are legal or regulatory impediments to do so.

Option D is also not consistent with these aspects, as it states that where an intermediary manages assets on behalf of a number of clients and arranges for the opening of accounts for its clients with the bank, and that intermediary is a financial institution subject to similar regulations, it is necessary for the bank to perform due diligence on the intermediary’s clients. This contradicts the principle that the bank may rely on the due diligence performed by the intermediary on its clients, if the intermediary is a regulated financial institution that applies equivalent or comparable AML standards to the bank, and if the bank has access to the relevant information and documentation.

References:

1: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012), Section 3: Intermediaries

According to the Basel Committee on Banking Supervision principles, the most important question the banker should ask when opening a numbered or alternate name account is who will control the account. This is because such accounts pose a higher risk of money laundering and terrorist financing, as they can be used to conceal the identity and beneficial ownership of the funds. Therefore, the banker should perform enhanced due diligence and verify the identity and source of funds of the person who has the authority to operate the account, as well as the purpose and nature of the business relationship12

The other questions are less relevant or secondary to the issue of control. The inheritance of the proceeds in the event of the businessman’s death is a matter of succession law and does not affect the identification of the beneficial owner. The amount of money deposited into the account may indicate the level of risk, but does not reveal the origin or destination of the funds. The account-opening date is a procedural detail that does not affect the compliance with the anti-money laundering and counter-terrorist financing standards12

References:

1: Basel Committee on Banking Supervision - Core principles for effective banking supervision, 2012, Principle 14 and Essential Criterion 14.1

2: Basel Committee on Banking Supervision - Sound management of risks related to money laundering and financing of terrorism, 2014, Paragraphs 30 and 31

According to the guidance issued by the Financial Crimes Enforcement Network (FinCEN) and the federal banking agencies, a financial institution is legally permitted to discuss any aspects of the reported activity with the law enforcement officer who contacts them about the suspicious transaction report (SAR), as long as the officer provides appropriate credentials and a written request for the information. The financial institution is also legally permitted to send the deposit documents referenced in the SAR, as they are part of the supporting documentation that may be requested by law enforcement1

However, the financial institution is not legally permitted to provide copies of the customer’s loan documents or explain the customer’s loan payment history, as they are not directly related to the reported activity and may contain confidential information that is protected by privacy laws or contractual agreements. The financial institution should only disclose the minimum amount of information necessary to respond to the law enforcement request and should not volunteer any information that is not relevant or requested12

References:

1: Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering Considerations, FinCEN and Federal Banking Agencies, 2021, Question 1

2: The best practices for effective Suspicious Activity Reporting, The Payments Association, 2020

 The investigator should escalate these concerns to the bank anti-money laundering officer, who is responsible for overseeing the implementation and effectiveness of the bank’s AML/CFT policies and procedures, as well as ensuring compliance with relevant laws and regulations. The bank anti-money laundering officer can then decide on the appropriate course of action, such as conducting further investigation, reporting to the regulators, or terminating the relationship with the customer. The other options are not suitable for escalating these concerns, as they may not have the authority, expertise, or responsibility to handle such matters.

References:

ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 4, pp. 113-114

FATF Guidance: The Role of Hawala and Other Similar Service Providers in Money Laundering and Terrorist Financing, October 20131, p. 19

Basel Committee on Banking Supervision, Sound management of risks related to money laundering and financing of terrorism, June 20172, p. 10