ACAMS Updated CAMS Exam Questions and Answers by josie

 the internal investigation did not examine the brokerage account, which could be a potential source of money laundering. According to the CAMS Study Guide, 6th Edition, one of the common methods of money laundering is to use securities brokers to move funds through the purchase and sale of stocks, bonds, or other instruments1. The customer’s frequent transfers from the business account to the brokerage account, and the increased volume of activity in the business account, could indicate that the customer is trying to disguise the origin or ownership of illicit funds by investing them in money market securities. Therefore, the anti-money laundering specialist should recommend the internal investigator to concentrate on the trades made in the brokerage account, and to look for any signs of market manipulation, insider trading, or unusual patterns of transactions1.

1: CAMS Study Guide, 6th Edition, Chapter 2: Money Laundering Risks and Methods, page 55-56.

 According to the Financial Action Task Force (FATF), the global standard-setter for anti-money laundering and counter-terrorist financing, two channels that can be utilized during a cross-border money laundering investigation to assist in gathering information are contacting existing liaison officers in the foreign jurisdiction and exchanging information between national law enforcement agencies. These are two of the methods that the FATF recommends in its guidance on international cooperation1. The FATF states thatliaison officers can facilitate the exchange of information and intelligence, provide operational support, and coordinate joint investigations1. The FATF also encourages the use of bilateral or multilateral agreements or arrangements to enable the exchange of information and intelligence between national law enforcement agencies, as well as the use of informal networks or mechanisms, such as the Egmont Group of Financial Intelligence Units1.

Option C is incorrect because contacting the potential suspect or their family members to request information is not a recommended channel for cross-border money laundering investigations. This method may alert the suspect of the investigation, compromise the confidentiality of the information, or violate the legal rights of the suspect or their family members. Moreover, the information obtained from the suspect or their family members may not be reliable or admissible in court.

Option D is incorrect because submitting only formal requests for information to a financial intelligence unit (FIU) is not a sufficient channel for cross-border money laundering investigations. While FIUs play an important role in collecting, analyzing, and disseminating financial information, they are not the only source of information for cross-border investigations. The FATF guidance states that investigators should also seek information from other competent authorities, such as law enforcement, supervisory, or judicial authorities, depending on the nature and purpose of the information sought1. Furthermore, the FATF guidance advises investigators to use both formal and informal channels of communication, as formal requests may take longer or face legal obstacles1.

1: FATF, International Co-operation Review Group, Guidance on Investigating and Prosecuting Money Laundering and the Financing of Terrorism, October 2012, pp. 13-18.

A money remittance business will most likely attract money launderers because it deals primarily in cash transactions, engages in international transactions, and conducts transactions for walk-in customers. These factors make money remittance businesses vulnerable to money laundering risks, such as:

Cash transactions: Cash is the preferred medium of exchange for money launderers, as it is anonymous, untraceable, and easily convertible. Money remittance businesses often deal with large amounts of cash, which can be used to place, layer, or integrate illicit funds into the financial system. Cash transactions also pose challenges for customer identification, record keeping, and transaction monitoring.

International transactions: Money remittance businesses facilitate cross-border transfers of funds, which can be used to move illicit funds from one jurisdiction to another, or to obscure the origin, destination, or purpose of the funds. International transactions also involve exposure to different legal, regulatory, and cultural environments, which may create inconsistencies or gaps in anti-money laundering (AML) and counter-terrorism financing (CTF) standards and practices.

Walk-in customers: Money remittance businesses often serve walk-in customers, who may not have an established relationship with the business, or who may use false or incomplete identification documents. Walk-in customers also increase the volume and complexity of transactions, which may make it difficult to detect suspicious or unusual activity, or to apply risk-based due diligence measures.

ACAMS CAMS Certification Video Training Course1, Module 2: Money Laundering Risks and Methods, Lesson 2.3: Money Laundering Risks and Methods by Sector

ACAMS CAMS Study Guide, 6th Edition2, Chapter 2: Money Laundering Risks and Methods, Section 2.3: Money Laundering Risks and Methods by Sector, pp. 37-38

ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 2: Money Laundering Risks and Methods, Section 2.3: Money Laundering Risks and Methods by Sector, Slide 16

The correct answer is A and D, as these two statements are directly quoted from the Wolfsberg Group’s “Suppression of the Financing of Terrorism” document1. Statement A describes the general role of financial institutions in the fight against terrorism, while statement D describes the specific due diligence measures that financial institutions should apply to customers engaged in high-risk sectors or activities. Statement B and C are not part of the Wolfsberg Group’s document, and they are not accurate descriptions of the role of financial institutions in the fight against terrorism. Statement B is too vague and unrealistic, as financial institutions cannot guarantee to drive down terrorism by analyzing activity types. Statement C is too narrow and prescriptive, as financial institutions may not have the resources or the mandate to create dedicated financial intelligence units for terrorist financing.

 1: The Suppression of the Financing of Terrorism – Wolfsberg Statement, page 213-214.