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

The Office of Foreign Assets Control (OFAC), part of the U.S. Department of the Treasury, is responsible for theadministration and enforcement of economic and trade sanctions. These sanctions are based on U.S. foreign policy and national security objectives and target:

Foreign countries and regimes

Terrorist organizations

Narcotics traffickers

Individuals and entities engaged in activities related to the proliferation of weapons of mass destruction

OFAC acts under various authorities, including national emergency powers granted by the President and specific legislation. One of its primary tools is theSpecially Designated Nationals(SDN) List, which identifies individuals and entities whose assets are blocked and with whom U.S. persons are generally prohibited from dealing.

It is important to note that OFAC is not responsible for designating jurisdictions as primary money laundering concerns (a task handled by FinCEN under Section 311 of the USA PATRIOT Act), nor does it manage trade agreements.

Along-term, root cause-based approach ensures AML deficiencies are fully remediated.

Option C (Correct):Addressing root causes ensures the institution remains compliant and prevents recurring violations.

Option A (Incorrect):Consulting with an FIU is unnecessary for internal remediation plans.

Option B (Incorrect):Short-term fixes do not resolve systemic AML issues.

Option D (Incorrect):AML compliance improvements may require investment—cost-cutting should not compromise compliance.

Best Practices for AML Audit Remediation:

Conduct root cause analysis before implementing corrective measures.

Develop a long-term compliance improvement plan.

Allocate sufficient resources for sustainable AML enhancements.

Thereal estate sectoris a known avenue formoney laundering, and this scenario presents multiplered flags.

Option A (Correct):High-risk jurisdictionsare associated withcorruption and financial crime, making transactions involving their citizenshigher risk.

Option D (Correct):Selling assetsbelow market valueis a common tactic todisguise illicit funds or transfer value illicitly.

Option B (Incorrect):While cross-border legal representation may raise questions,it is not inherently suspicious.

Option C (Incorrect):Offshore companies are common intax planning, though they requirefurther scrutiny.

 The Fourth European Union Directive on money laundering (AMLD4) requires member countries to maintain registries of the beneficial owners of legal entities, such as companies, trusts, foundations, etc. This is to ensure that the true identity and ownership of the customers and the natural persons on whose behalf transactions are conducted are known to the obliged entities, such as banks, lawyers, accountants, etc., and to the competent authorities, such as regulators, supervisors, or law enforcement12. This requirement aims to prevent the misuse of legal entities for money laundering or terrorist financing purposes, and to enhance transparency andaccess to beneficial ownership information34.

 1: AMLD4, Article 30, 5; 2: AMLD4, Recital 25, 5; 3: AMLD4, Recital 26, 5; 4: AMLD4, Recital 27, 5.

In situations involving significant AML concerns, especially with high-risk clients, thecompliance officer must follow proper escalation procedureswithin the institution. The appropriate course of action is toescalate the matter to a senior governance body, such as ahigh-risk client committee, which is typically tasked with balancing AML risk against business considerations.

Unilateral offboarding (Option B)may violate internal protocols.

Persuading the relationship manager (Option C)bypasses formal governance.

Delaying action (Option D)risks further exposure to regulatory or reputational damage.

This escalation ensuresdocumented risk-based decision-makingand demonstrates to regulators that the institution appliesstructured and objective AML governance.

According to the ACAMS CAMS Certification Study Guide (6th edition), the bank should file a SAR if it knows, suspects, or has reason to suspect that a transaction involves funds derived from illegal activity, or is intended or conducted to hide or disguise funds or assets derived from illegal activity, or to evade any BSA regulation or federal law, or has no business or apparent lawful purpose, or is not the sort in which the customer would normally be expected to engage1. The scenario described in the question meets these criteria, as the small deposits and withdrawals from a high-risk country could indicate money laundering, terrorist financing, or other illicit activities. The bank should also document its decision to file or not file a SAR, and retain thesupporting documentation for five years1.

The other options are not correct because they either do not comply with the BSA requirements, or do not adequately address the potential risk of the activity. Blocking any further activity could alert the customer of the bank’s suspicion, and could also interfere with law enforcement investigations. Initiating an investigation into the activity could be part of the bank’s due diligence process, but it does not substitute the obligation to file a SAR if the activity is suspicious. Contacting the customer could also tip off the customer, or elicit false or misleading explanations that could hinder the bank’s assessment of the activity.

ACAMS CAMS Certification Study Guide (6th edition), page 82-83. 12345678 [9]

The method of purchasing chips with cash and redeeming them for a check is used to launder money in casinos. This is because the check can be deposited into a bank account or cashed at another location, creating a paper trail that appears to be legitimate. The check can also be used to conceal the source and amount of the cash, as well as the identity of the person who obtained it. This method is also known as “chip washing” or “chip dumping” and is one of the common ways that money launderers exploit casinos12.

1: CAMS Certification Package - 6th Edition | ACAMS, Chapter 2: Money Laundering Risks and Methods, p. 32-33 2: FATF Report: Money Laundering through the Physical Transportation of Cash, October 2015, p. 28-29, http://www.fatf-gafi.org/media/fatf/documents/reports/money-laundering-through-transportation-cash.pdf

A bank’s risk assessment is a process of identifying, measuring, and mitigating the potential risks that the bank faces in its operations, products, services, and customers. According to the ACAMS Study Guide, a bank should focus on the following areas when performing a risk assessment1:

The type and location of the institution’s clients. This involves analyzing the customer base, the types of accounts and transactions, the source and destination of funds, the level of due diligence and verification, and the risk profile of the customers. For example, a bank should consider whether its customers are individuals or entities, domestic or foreign, politically exposed persons, high-net-worth individuals, non-profit organizations, or cash-intensive businesses. The location of the customers may also indicate the level of exposure to money laundering, terrorist financing, sanctions, or tax evasion risks.

The nature and breadth of the services and products the institution provides. This involves evaluating the range and complexity of the products and services offered by the bank, the delivery channels, the payment methods, and the innovation and technology involved. For example, a bank should consider whether it offers wire transfers, correspondent banking, trade finance, private banking, trust and fiduciary services, prepaid cards, mobile banking, or cryptocurrency services. The nature and breadth of the services and products may also affect the level of transparency, traceability, and compliance of the transactions.

The geographic locations where the institution does business. This involves assessing the jurisdictions where the bank operates, where its customers reside, where its counterparties are located, and where the funds flow. For example, a bank should consider whether it has branches, subsidiaries, or affiliates in high-risk countries, whether it serves customers from high-risk countries, whether it engages in cross-border transactions, and whether it complies with the local laws and regulations of the countries where it does business. The geographic locations where the institution does business may also influence the level of exposure to political, legal, regulatory, or reputational risks.

1: ACAMS Study Guide, Chapter 2: Risk Assessments, 1