ACAMS Updated CAMS Exam Questions and Answers by wynter

A subpoena is a legal order that requires a person or an entity to produce documents, information, or testimony related to a legal matter. A financial intelligence unit (FIU) is a specialized unit within a financial institution that is responsible for detecting, analyzing, and reporting suspicious activities and transactions. When a bank receives a subpoena regarding one of its clients, the FIU should review the subpoena and perform a transaction review to determine if there is any evidence of money laundering, terrorist financing, fraud, or other criminal activity involving the client. The FIU should also respond fully to the subpoena by providing the requested information and documents, unless there is a valid reason to object or seek a protective order. The FIU should not adjust the client’s risk score, file a SAR, or close the client’s account based solely on the receipt of the subpoena, as these actions may be premature, inappropriate, or illegal. Adjusting the client’s risk score may require further investigation and due diligence. Filing a SAR may be unnecessary or misleading if the subpoena does not indicate any suspicious activity. Closing the client’s account may violate the bank’s contractual obligations, customer service standards, or anti-discrimination laws. Moreover, these actions may alert the client or the subject of the investigation to the existence of the subpoena, which may interfere with the legal process or jeopardize the safety of the bank or its employees.

References:

Subpoena Responses for Financial Institutions

Requests by Law Enforcement for Financial Institutions to Maintain Accounts

SUBPOENA COMPLIANCE UPDATE

[ACAMS Study Guide, 6th Edition, Chapter 5, p. 140]

According to the ACAMS CAMS Study Guide, one of the key elements of an effective anti-money laundering (AML) program is ongoing training for all relevant staff. Training should cover the legal and regulatory obligations, the risks and red flags of money laundering and terrorist financing, the procedures and controls for customer due diligence and transaction monitoring, the reporting and record-keeping requirements, and the roles and responsibilities of the staff and the management. Training should also be tailored to the specific functions and needs of the staff, and should be updated regularly to reflect the changes in the AML environment and the FI’s policies and procedures.

PEPs are considered high-risk customers for AML purposes, as they may abuse their positions of power and influence to commit or facilitate corruption, bribery, embezzlement, or other financial crimes. Therefore, it is essential that the FI’s staff are aware of the definition and categories of PEPs, the sources and methods to identify and verify PEPs, the enhanced due diligence measures and ongoing monitoring that apply to PEPs, and the escalation and reporting procedures for suspicious activities involving PEPs .

If an internal audit reveals that a large group of employees do not know how to handle PEPs, this indicates a serious gap in the FI’s AML training program, which could expose the FI to regulatory sanctions, reputational damage, and legal liabilities. Therefore, the next course of action that should be taken is to create a company-wide training program that covers the relevant aspects of PEPs, and to ensure that the training is delivered to all staff who deal with PEPs or have access to PEP-related information. The training should also be evaluated for its effectiveness and impact, and the results should be reported to the senior management and the board of directors.

References:

ACAMS CAMS Study Guide, 6th Edition, Chapter 2: Developing an Effective Anti-Money Laundering Program, page 51-52

ACAMS CAMS Study Guide, 6th Edition, Chapter 3: Conducting Customer Due Diligence, page 75-78

FATF Guidance: Politically Exposed Persons (Recommendations 12 and 22), June 2013, 1

ACAMS CAMS Study Guide, 6th Edition, Chapter 4: Conducting Ongoing Monitoring, page 97-98

This is an emerging risk associated with cyber-enabled fraud because the use of false identities and documents can allow criminals to disguise their activities and evade detection. In such cases, the name and address provided on the account may not match the name and address on the government-issued documentation. This discrepancy can be difficult to detect, making it a potential risk for financial institutions.

One of the main challenges of online banking is verifying the identity of customers who open accounts or conduct transactions remotely, without face-to-face interaction. This poses a higher risk of money laundering, as criminals may use false or stolen identities, or hide behind shell companies or nominees, to move illicit funds through online platforms. Therefore, online banking providers must implement robust and risk-based customer due diligence (CDD) measures, such as verifying identity documents, using biometric or digital verification methods, screening customers against sanctions and watchlists, and monitoring customer behavior and transactions for any red flags or anomalies.

References:

ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 2: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Section 2.2: Customer Due Diligence (CDD) and Know Your Customer (KYC), p. 32-35.

eWallets: AML Risks & How to Comply1