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

Section 314(b) of the USA PATRIOT Act allows financial institutions to share information with each other, under a safe harbor that offers protection from liability, in order to better identify and report potential money laundering or terrorist financing activities. The intended benefits of this information sharing include:

Participating financial institutions sharing information about suspicious activity by customers that may have otherwise gone unnoticed. For example, if a customer is conducting transactions with multiple financial institutions that individually do not appear suspicious, but collectively indicate a pattern of money laundering or terrorist financing, the financial institutions can share this information and report it to the authorities.

Detecting money laundering and terrorist financing approaches and schemes across multiple financial institutions. For example, if a financial institution identifies a new typology or modus operandi of money laundering or terrorist financing, it can share this information with other financial institutions to help them prevent or detect similar activities by their customers.

Obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing. For example, if a financial institution has incomplete or insufficient information on a customer or a transaction that raises suspicion, it can request more information from another financial institution that may have dealt with the same customer or transaction.

References:

Section 314(b) | FinCEN.gov

Section 314(b) Fact Sheet - FinCEN.gov

A SAR/STR narrative that is useful to law enforcement should include a detailed description of the known or suspected criminal violation or suspicious activity, as well as ensure that all information in the SAR/STR is complete and accurate based on what the institution knows. These elements help law enforcement to understand the nature and scope of the suspicious activity, and to follow up with further investigation if needed. The other options are not essential for a useful SAR/STR narrative, as they either provide irrelevant or redundant information, or could compromise the confidentiality of the report.

The request for information should include the following elements:

Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s) (Option A): This is necessary to verify the identity and ownership structure of the remitter and to assess the risk level of the customer and the transaction.

The account profile of the customer and their KYC data (Option C): This is necessary to understand the nature and purpose of the customer’s business relationship with the respondent bank and to compare it with the observed transactional activity.

The contract pertaining to the purchase of property in another country (Option E): This is necessary to verify the legitimacy and source of funds for the transaction and to identify the ultimate beneficiary of funds.

The other options are not relevant or necessary for the request for information. The full transaction history of the correspondent bank’s customer (Option B) is too broad and may not be related to suspicious activity. The respondent bank’s customer’s senior management bonus plan (Option D) is not relevant to the transaction and may not be available to the respondent bank. The last 6 months of transactional history (Option F) is also too broad and may not be related to the suspicious activity.

References:

Advanced CAMS-FCI Certification Handbook, page 19

The bank is out of compliance with CIP regulations because it did not obtain the minimum identifying information from the customer prior to opening the account, as required by 31 CFR § 1020.220(a)(2)(i)(A). The bank should have obtained the name, date of birth, address, and identification number of the customer, as well as verified the identity of the customer to the extent reasonable and practicable. The lack of ownership data may also indicate a violation of beneficial ownership regulations, but that is not the primary issue in this case.

The best reason the EU bank should file a SAR/STR is that the events raise concerns that the payment represents proceeds from insider trading, which is a form of market abuse and a predicate offense for money laundering in many jurisdictions. The fact that the originator was indicted by U.S. law enforcement, arrested in Switzerland, and extradited for alleged insider trading indicates that there is a strong suspicion that the funds are derived from criminal activity. The other options are not sufficient reasons to file a SAR/STR, as they do not directly relate to the nature or source of the funds.

References: [Financial Action Task Force Report on Money Laundering and Terrorist Financing Risks and Vulnerabilities Associated with Gold], page 17 : [Leading Complex Investigations Certificate], page 12

The most likely reason for conducting a reverse transaction is to conceal or launder illicit funds. A reverse transaction is a transaction that reverses a previous transaction, such as a refund, a chargeback, or a cancellation. Reverse transactions can be used by money launderers to obscure the source, ownership, or destination of funds, or to create false records or invoices. For example, a money launderer may initiate a wire transfer from a high-risk jurisdiction to a low-risk jurisdiction, and then reverse the transaction after receiving confirmation of the funds. This way, the money launderer can create a paper trail that shows legitimate funds coming from a low-risk jurisdiction, while hiding the true origin of the funds.

References: Advanced CAMS-FCI Study Guide, page 40-41.

A product of analysis is a conclusion or inference that is derived from facts or judgments, using analytical techniques or tools. Option B is a product of analysis because it implies that the investigator has used a tool or technique, such as a threshold analysis, to identify a pattern of structured cash deposits that may indicate an attempt to evade reporting requirements. The other options are facts or judgments that can be verified by evidence or observation.

References: Advanced CAMS-FCI Certification Handbook, page 23.

The correct answer is C and E. The investigator should provide additional information to the LE upon receiving a formal request, and gather all the information that would be useful for LE and recommend filing a SAR/STR. These steps are consistent with the best practices of conducting financial crime investigations and reporting suspicious activity. The investigator should not close the customer’s accounts or the investigation, as this may interfere with the ongoing LE inquiry and violate the FI’s policies and procedures. The investigator should also not contact local LE directly, as this may compromise the confidentiality of the investigation and the FIU’s authority. References:

Advanced CAMS-FCI Study Guide, Chapter 4: Reporting Suspicious Activity, pages 40-411

Advanced CAMS-FCI Study Guide, Chapter 5: Governance of an AFC Investigations Unit, pages 48-491

Advanced CAMS-FCI Certification | ACAMS

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)

The total suspicious transaction amount that the investigator should report is 659,000,000 USD. This is the sum of the two transactions involving the LLC and the state-run oil company, which are 59,000,000 USD and 600,000,000 USD respectively. The other transactions that the LLC made to other accounts, a money brokerage firm, and real estate purchases are not relevant to the question, as they are not part of the series of transactions that triggered the alert.

References: Advanced CAMS-FCI Certification | ACAMS