A director of a financial institution was convicted of laundering money as part of a Ponzi scheme and terminated. As a result of an internal investigation evidence proved that an employee assisted in the illegal activity. Which action should the institution take?
Correct Answer: B
If an employee of a financial institution is found to have assisted in money laundering or any other criminal activity, the institution should take appropriate disciplinary action and report the employee to the relevant authorities. This is not only a legal obligation, but also a sound compliance practice to protect the institution's reputation and integrity. Disciplining the employee without informing the authorities would be insufficient and potentially expose the institution to further legal risks. Ignoring the employee's involvement or requiring additional training for all employees would be ineffective and inappropriate responses. References: * ACAMS CAMS Certification Package - 6th Edition, Chapter 5: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 121-1221 * ACAMS CAMS Certification Package - 6th Edition, Chapter 6: AML Compliance Program, pp. 143-1441 * ACAMS CAMS Certification Video Training Course, Module 5: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Lesson 5.2: International Standards and Best Practices2 * ACAMS CAMS Certification Video Training Course, Module 6: AML Compliance Program, Lesson 6.4: Internal Controls2
Question 103
In order to demonstrate commitment to AML compliance within a bank, the Board of Directors should:
Correct Answer: D
According to the Anti-Money Laundering Specialist (the 6th edition) resources, one of the essential elements of an effective AML program is the establishment of a written AML policy that sets out the bank's commitment to comply with the applicable AML laws and regulations, as well as the roles and responsibilities of the board of directors, senior management, and staff in implementing the AML program. The AML policy should also include the bank's risk assessment, customer due diligence, transaction monitoring, record keeping, reporting, training, and audit procedures. The AML policy should be approved by the board of directors and communicated to all staff from the top down. The other options are not incorrect, but they are not the primary responsibility of the board of directors in demonstrating commitment to AML compliance. References: ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 8: Anti- Money Laundering Programs, page 221. ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 8: Anti- Money Laundering Programs, page 224.
Question 104
What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?
Correct Answer: C
According to the Financial Action Task Force (FATF) 40 Recommendations, countries should implement measures to prevent the abuse of non-profit organizations (NPOs) for the financing of terrorism. One of these measures is to ensure that NPOs cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations. This means that countries should have effective mechanisms to monitor and supervise NPOs, especially those that are at risk of terrorist financing abuse, and to take appropriate actions against NPOs that are involved in such activities. Countries should also ensure that NPOs maintain adequate records of their activities and transactions, and that these records are accessible to competent authorities. Furthermore, countries should promote transparency and accountability in the NPO sector, and encourage NPOs to conduct due diligence on their donors, beneficiaries, and associates. References: = * FATF 40 Recommendations, Recommendation 8 and Interpretive Note to Recommendation 8 * Best Practices on Combating the Abuse of Non-Profit Organisations, FATF, June 2015 * COMBATING THE ABUSE OF NON-PROFIT ORGANISATIONS (RECOMMENDATION 8), FATF, June 2015 Reference: http://www.fatf-gafi.org/media/fatf/documents/reports/BPP-combating-abuse-non- profitorganisations.pdf (p.9)
Question 105
What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)
