Pass the ACAMS AML Certifications Advanced-CAMS-Audit Questions and answers with CertsForce

Jurisdictional risk is critical in correspondent banking due to potential exposure to countries with weaker AML/CFT controls, high corruption levels, or sanctions.

AML Compliance Policy Elements:

A. Record Keeping: Essential for regulatory compliance, ensuring accurate data retention for audits and investigations​​.

B. Suspicious Activity Reporting: A core AML requirement, mandated by FATF recommendations to identify and report suspicious transactions​​.

E. Training Requirements: Ensures staff understand their AML obligations, as highlighted in Basel and FATF guidelines​​.

Role of Internal Audit:

Internal audit is tasked with evaluating and improving the effectiveness of governance, risk management, and control processes within the organization.

Periodic evaluations ensure that AML/CFT processes remain robust and effective against emerging risks.

Alignment with CAMS-Audit Guidance:

Advanced CAMS-Audit training highlights the need for internal audit to focus on process effectiveness rather than operational responsibilities, such as quality assurance or corrective actions​​.

C:The purpose and intended nature of the business relationship are fundamental elements of customer due diligence (CDD) and should be reviewed in the risk assessment process to understand the rationale behind the customer's activities and their alignment with expected patterns​​.

D:Identifying and verifying the ultimate beneficial owners (UBOs) is a core principle of the KYC process to ensure transparency and mitigate risks related to hidden ownership or illicit activities​​.

Evaluating the Management of Risk:

Internal auditors assess the effectiveness of risk management strategies to ensure alignment with organizational goals and regulatory expectations.

Acting as a Catalyst for Improvement:

Auditors provide insights and recommendations to enhance controls and improve overall risk management practices.

CAMS-Audit Emphasis:

CAMS-Audit outlines the dual role of internal auditors in evaluating and facilitating risk management improvements​​.

Distinguishing General and Specific Licenses:

Ageneral licensepermits predefined categories of transactions without individual approval.

Aspecific licenseis issued for unique transactions based on a written application evaluated on a case-by-case basis.

OFAC Guidance:

Auditors should verify that transactions routed through sanctioned countries align with the licenses and confirm appropriate documentation for compliance​​.

Executive Summary Requirements:

The statement focuses on clear, evidence-based findings, critical for reflecting material deficiencies in enhanced due diligence (EDD) for high-risk clients​​.

Guidelines for Reporting:

FATF emphasizes the consistent application of risk rating systems to ensure ML/TF risks are adequately mitigated​​.

C:Designating the account as a PEP-account triggers additional monitoring and controls as PEPs inherently pose higher risks​​.

D:Enhanced due diligence (EDD) and ongoing monitoring are essential for PEPs to track their financial activities closely and address any anomalies​​.

E:Documenting the details of the asset-holding arrangement provides clarity on the customer's profile and any associated risks​​.

Core Components of AML Systems and Controls:

Supporting documentation ensures alignment with regulatory expectations and helps auditors verify that the institution’s policies and controls reflect its assessed risks​​.

Other Options:

B:Monthly operations are operational concerns, not control documentation.

C:Daily reports are excessive for governance purposes.

D:Training must include all staff, not only senior management.

Exemptions from OFAC Regulations:

Non-US citizens residing in the US are typically subject to OFAC regulations unless explicitly exempted. However, understanding exemptions is vital for sanctions compliance.

Auditor's Role in Sanctions Compliance:

Auditors must review whether the entity’s compliance program correctly identifies and exempts individuals or entities as per OFAC guidelines.

CAMS-Audit Reference:

CAMS-Audit recommends thorough reviews of sanctions compliance programs, focusing on adherence to OFAC requirements and exemptions​​.