A casino incorporated in an offshore location approaches a financial institution to open an account relationship. The casino operates in a country that complies with Financial Action Task Force 40 Recommendations. The casino provides documentation of beneficial ownership. According to the Financial Action Task Force 40 Recommendations, the primary concern for the financial institution prior to opening the account is to
Correct Answer: D
Question 652
A bank's transaction surveillance system triggers an alert for a deposit of 250.000 USO into a client's account. According to the bank's KYC information, the client works for a financial advisory firm, and earns approximately 100,000 USD per year. Which actions should be taken? (Select Three.) File the suspicious transaction immediately to the financial intelligence unit.
Correct Answer: B,C,E
According to the Certified Anti-Money Laundering Specialist (CAMS) Manual , 6th edition, if a bank's transaction surveillance system triggers an alert for a deposit of 250.000 USD into a client's account, the bank should take the following actions: Request information and documentation from the client on the background of the transaction (CAMS Manual, 6th edition, page 46). Contact the client advisor to learn if he has any insight on the transaction background (CAMS Manual, 6th edition, page 47). Review the transaction background in the bank's transaction platform (CAMS Manual, 6th edition, page 47). Discarding the alert as a false positive hit and reviewing the alert if the deposit is made in cash should not be done. The bank should request additional information and documentation from the client to better understand the nature of the transaction. Additionally, the bank should reach out to the client advisor to learn if they have any insight on the transaction background. Finally, the bank should review the transaction background in the bank's transaction platform to determine if any additional alerts or anomalies are present. (CAMS Manual, 6th Edition, Pages 117-118)
Question 653
A compliance officer is developing an anti-money laundering program for a financial institution located in a Financial Action Task Force member country. The institution conducts business with customers located in countries/jurisdictions that are not members of Financia Action Task Force. Which of the following issues should be addressed in the program? 1. The requirement to identify the beneficial owners of accounts. 2. The requirement for customer identification for the opening of new accounts. 3. The financial institution's obligation to report suspicious transactions. 4. The obligation to freeze funds involved in suspicious transactions.
Correct Answer: A
A financial institution located in a Financial Action Task Force (FATF) member country should address the following issues in its anti-money laundering program when dealing with customers located in countries /jurisdictions that are not members of FATF: * The requirement to identify the beneficial owners of accounts: Beneficial owners are the natural persons who ultimately own or control a customer or a legal entity. Identifying the beneficial owners of accounts is a key component of customer due diligence (CDD) and helps the financial institution to assess the risk profile of the customer, prevent the misuse of legal entities for money laundering or terrorist financing, and comply with the FATF Recommendations12. * The requirement for customer identification for the opening of new accounts: Customer identification is the process of verifying the identity of a customer using reliable and independent sources of information or documents. Customer identification is another essential element of CDD and helps the financial institution to establish a business relationship with the customer, prevent identity fraud, and comply with the FATF Recommendations13. * The financial institution's obligation to report suspicious transactions: Suspicious transactions are transactions that have no apparent economic or lawful purpose, or are inconsistent with the customer's known profile or business activities, or indicate involvement in money laundering or terrorist financing. Reporting suspicious transactions to the competent authorities is a core obligation of the financial institution under the FATF Recommendations14 and helps to detect and deter illicit activities and support law enforcement investigations. The obligation to freeze funds involved in suspicious transactions is not an issue that should be addressed in the anti-money laundering program, as it is not a requirement under the FATF Recommendations. The FATF Recommendations require the financial institution to freeze funds or other assets of designated persons and entities that are subject to targeted financial sanctions related to terrorism, proliferation of weapons of mass destruction, or other threats to the international financial system1 . However, the financial institution is not obliged to freeze funds involved in suspicious transactions, unless it receives a specific order from the competent authorities or the courts. References: * The FATF Recommendations, as amended November 2023 * Interpretive Note to Recommendation 10 (Customer Due Diligence), paragraphs 5(b) and 6 * Recommendation 10 (Customer Due Diligence), paragraph 1 * Recommendation 20 (Reporting of Suspicious Transactions) * Recommendation 6 (Targeted Financial Sanctions Related to Terrorism and Terrorist Financing), Recommendation 7 (Targeted Financial Sanctions Related to Proliferation), and Recommendation 8 (Non-Profit Organisations)
Question 654
What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)
A compliance analyst is reviewing recent activity between a publicly traded company and a company in a high risk jurisdiction. Which detail suggests that escalation is warranted?
