CAMS Exam Dumps - Certified Anti-Money Laundering Specialist (the 6th edition)

Economic sanctions are penalties imposed by one or more countries against another country, group, or individual for violatinginternational norms or threatening national interests1. The ultimate goal of economic sanctions is to protect national security by changing the behavior or policies of the target, or by weakening its capabilities or resources2. Sanctions can be used to advance various foreignpolicy objectives, such as counterterrorism, nonproliferation, democracy promotion, human rights protection, conflict resolution, and cybersecurity1. Sanctions can take different forms, such as travel bans, asset freezes, trade embargoes, arms restrictions, and aid reductions1. Sanctions can be applied unilaterally by one country, or multilaterally by a coalition of countries or an international organization, such as the United Nations or the European Union1.

1: What Are Economic Sanctions? | Council on Foreign Relatio

2: How Economic Sanctions Work - Investopedia

The Patriot Act, enacted in 2001, introduced several provisions to enhance the anti-money laundering and counter-terrorist financing (AML/CFT) measures for U.S. banks and their foreign correspondent relationships. Some of the potential issues for foreign financial institutions (FFIs) maintaining correspondent accounts with U.S. banks under the Patriot Act are:

Cancellation of correspondent banking relationships: The Patriot Act requires U.S. banks to conduct due diligence and enhanced due diligence on their foreign correspondent accounts, and to terminate any account that poses a significant risk of money laundering or terrorist financing. This may result in the cancellation of correspondent banking relationships with FFIs that do not meet the U.S. standards or cooperate with the U.S. authorities. The loss of correspondent banking relationships may affect the FFIs’ ability to access the U.S. financial system and provide services to their customers.

Forfeiture of funds in a U.S. interbank account: The Patriot Act authorizes the U.S. government to seize and forfeit any funds in a U.S. interbank account that are involved in or traceable to money laundering or terrorist financing activities. This means that FFIs may face the riskof losing their funds in a U.S. interbank account if they or their customers are suspected or accused of engaging in illicit activities. The forfeiture of funds may have significant financial and reputational consequences for the FFIs and their customers.

Prohibition of correspondent accounts for shell banks: The Patriot Act prohibits U.S. banks from establishing or maintaining correspondent accounts for shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. This means that FFIs that are shell banks or have relationships with shell banks cannot access the U.S. financial system through correspondent accounts. The prohibition of correspondent accounts for shell banks aims to prevent the use of shell banks as vehicles for money laundering and terrorist financing.

CAMS Study Guide, 6th Edition, Chapter 4: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 81-841

USA PATRIOT Act, Title III: International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Sections 312, 319, and 3132

Wolfsberg Anti-Money Laundering Principles for Correspondent Banking, October 2014, pp. 3-43

The customer directing the payment of the money borrowed to an unrelated third party is a red flag for potential money laundering, as it could indicate layering or integration of illicit funds. The other options are not necessarily indicative of money laundering, although they could warrant further monitoring or due diligence depending on the customer profile and risk assessment.

FIUsexchange information through secure platformsto investigate financial crime cases.

Option B (Correct):TheEgmont Secure Webis theprimary communication platformforFIUs globally.

Option A (Incorrect):MLATsallow forformal legal cooperationbut arenot an FIU-to-FIU communication tool.

Option C (Incorrect):INTERPOL databasestrackcriminal records, not financial intelligence data.

Option D (Incorrect):TheUN Sanctions Listprovidesentity restrictions, not an FIU data-sharing mechanism.

 This is a red flag of money laundering or terrorist financing that involves the use of non-profit organizations (NPOs) as conduits for illicit funds. NPOs may be vulnerable to abuse by criminals who exploit their legitimate activities, reputation, and access to funds and resources. A transaction monitoring process that would alert a bank for this red flag activity is to analyze the source, destination, frequency, and purpose of the funds transferred to and from the charity account, and to compare them with the expected profile and activity of the NPO. If the bank detects any inconsistency, discrepancy, or deviation from the norm, it should raise an alert and conduct further investigation.

FATF Report: Risk of Terrorist Abuse in Non-Profit Organisations, page 9

Transaction Monitoring Processes for Red Flag Activity in Banking

AML Red Flags – What are the Top 10 Indicators? - ComplyAdvantage, section “Red flags related to the nature of transactions”

According to the Anti-Money Laundering Specialist (the 6th edition) study guide, ongoing training is a key element of an effective anti-money laundering compliance program, as it ensures that the staff are aware of their roles and responsibilities, the latest regulatory developments, and the emerging risks and trends in money laundering and terrorist financing1. Ongoing training also helps to foster a culture of compliance within the institution, where the staff are committed to adhering to the policies and procedures, detecting and reporting suspicious activities, and protecting the institution from reputational and legal damages2.

1: CAMS Study Guide, 6th Edition, Chapter 2, Section 2.5, page 53

2: CAMS Study Guide, 6th Edition, Chapter 2, Section 2.6, page 54

 the results of related audits and examinations are the most useful additional element to report to executive management on a regular basis. Audits and examinations are essential tools to assess the effectiveness and compliance of the anti-money laundering program across the organization. They can identify strengths, weaknesses, gaps, risks, and best practices in the program and provide recommendations for improvement. They can also help to monitor the implementation of corrective actions and remediation plans. Reporting the results of audits and examinations can help executive management to oversee the performance of the program, ensure accountability, and demonstrate commitment to the anti-money laundering objectives12

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1: ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 2, page 62

2: CERTIFICATION Candidate Handbook, page 16