In May 2002, the Wolfsberg Principles on Private Banking were revised and included a section that prohibits the use of internal non-client accounts in a manner that would prevent officials from appropriate monitoring movements of funds or keep clients from being linked to the movement of funds on their behalf. What is another name for these internal, non-client accounts?
A retail bank has just acquired a credit card business. The bank's anti-money laundering policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis. Is the bank's existing anti-money laundering training adequate to be delivered to employee of the newly acquired credit card business?
Correct Answer: C
The bank's existing anti-money laundering training is not adequate to be delivered to the employees of the newly acquired credit card business, because anti-money laundering training needs to be tailored and focused on the risks specific to the business. Credit card businesses face different types of money laundering risks than retail banks, such as card-not-present fraud, identity theft, card skimming, and prepaid card abuse. Therefore, the anti-money laundering training for credit card businesses should cover the specific red flags, indicators, typologies, and mitigation measures related to these risks, as well as the relevant laws and regulations that apply to credit card businesses. References: CAMS Study Guide, 6th Edition, Chapter 4, Section 4.31 CAMS Study Guide, 6th Edition, Chapter 5, Section 5.21 Certification Candidate Handbook, Section 3.22 Latest CAMS Exam Questions, Question 433
Question 34
A corporate services provider in a European Union (EU) country has a prospect from an African country who deals in oil and gas. The prospect intends to develop an oil terminal in his home country with a $75 million dollar loan secured by a third party, which is a trust formed in a Caribbean island with a holding company based in a European secrecy haven. A young lady is presented as an ultimate beneficial owner who has gained her wealth through a fitness studio in her home country. What are two red flags that could indicate money laundering or financing terrorism? (Choose two.)
Correct Answer: B,D
According to the ACAMS study guide1, some of the common red flags for money laundering or financing terrorism are: Customers who provide insufficient or suspicious information, such as unusual or unverifiable identification documents, different taxpayer identification numbers, or vague or inconsistent information about their business or source of funds. Transactions that have unusual features, such as large cash payments, unexplained payments from a third party, use of multiple or foreign accounts, complex or illogical transactions, or transactions that are inconsistent with the customer's profile or expected behavior. Geographic concerns, such as transactions involving high-risk jurisdictions, offshore financial centers, secrecy havens, or countries subject to sanctions or embargoes. Ultimate beneficial ownership that is unclear, such as customers who use shell companies, trusts, or other legal entities to obscure their identity or the identity of the true owners or controllers of the funds or assets. In this scenario, two red flags that could indicate money laundering or financing terrorism are: B: The guarantor company's ownership structure is overly complex. This could be an attempt to hide the true source or destination of the funds, or to evade regulatory or law enforcement scrutiny. The use of a trust formed in a Caribbean island and a holding company based in a European secrecy haven could also indicate geographic concerns, as these jurisdictions are known for their low transparency and high confidentiality. D: The ultimate beneficial owner is a young lady who has gained her wealth through a small business. This could be a case of false or misleading information, as the source of funds is not commensurate with the size or nature of the transaction. The fitness studio business could be a front or a cover for illicit activities, or the young lady could be a nominee or a straw man for the real owner or beneficiary. References: = 1 ACAMS. (2020). Study Guide for the Certification Examination: Sixth Edition. Miami, FL: ACAMS.
Question 35
What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?
Correct Answer: B
According to the CAMS manual 6th edition, the USA PATRIOT Act allows the US government to subpoena documents from foreign financial institutions (FIs) that have no presence in the US (option B). The manual states that "The USA PATRIOT Act provides US law enforcement agencies with the power to subpoena documents from foreign banks that maintain correspondent accounts with US banks or have no presence in the United States" (p. 77).
