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

AnEnterprise-Wide Risk Assessment (EWRA)helpsfinancial institutionsidentify and mitigatemoney laundering risks.

Option B (Correct):Wolfsberg Group and FATF emphasize that an EWRA should focus onhigher-risk customers, products, and geographies, ensuringappropriate controlsare in place.

Option A (Incorrect):Institutions shouldnot blindly adopt third-party frameworkswithoutcustomizing themto their specific risk exposure.

Option C (Incorrect):While new clients are important, an EWRA mustassess risks across all customers and transactions.

Option D (Incorrect):EWRAmust address residual risk, not just inherent risk. Effectivemitigation strategiesare essential.

 According to the Wolfsberg Group, the FI should take the following steps regarding the opening of the account for the senior government official:

Reasonably establish if the source of wealth and funds of the official is legitimate. This is to ensure that the FI is not facilitating the laundering of proceeds of corruption, bribery, or other illicit activities by the official, who is considered a politically exposed person (PEP) and poses a higher risk of financial crime. The FI should obtain information and documentation on the origin andownership of the funds, the official’s income and assets, and the purpose and expected activity of the account12.

Perform due diligence procedures on the managing intermediary. This is to verify the identity, reputation, and regulatory status of the intermediary, who acts as a third party on behalf of the official. The FI should also assess the intermediary’s own AML/CFT policies and controls, and the nature and extent of the relationship between the intermediary and the official13.

Determine whether the intermediary representative is acting on the officer’s behalf. This is to establish the beneficial ownership and control of the account, and to avoid any potential conflicts of interest or undue influence by the intermediary. The FI should obtain a written confirmation from the intermediary that they are authorized to act on behalf of the official, and that they will disclose any changes in the beneficial ownership or control of the account13.

TheAML supervisory authorityis responsible for overseeing financial institutions' compliance with AML/CFT regulations.

Option D (Correct):AML supervisory authorities, such as theFinancial Conduct Authority (FCA) in the UK,FinCEN in the US, orEuropean Central Bank (ECB) for EU institutions, conduct inspections, issue reports, and enforce penalties when AML deficiencies are found.

Option A (Incorrect):Self-regulatory bodies provide guidelines butdo not have legal authorityto withdraw banking licenses.

Option B (Incorrect):Law enforcement may investigate criminal conduct, butregulatory compliance issuesfall under AML supervisory authorities.

Option C (Incorrect):FATF provides guidance and assessments but doesnot directly enforcecompliance at individual financial institutions.