CAMS Exam Dumps : Certified Anti-Money Laundering Specialist (the 6th edition)

 the compliance officer should cooperate with the law enforcement investigation, but only after receiving a formal written request that specifies the scope and purpose of the information sought. This is to ensure that the compliance officer complies with the legal and regulatory obligations of the bank, such as confidentiality, privacy, and data protection. The compliance officer should also document the request and the information provided, and report the incident to the senior management and the board of directors as appropriate.

References:

FFIEC BSA/AML Assessing the BSA/AML Compliance Program - BSA Compliance Officer, section “BSA Compliance Officer”, paragraph 3: “The BSA compliance officer is responsible for ensuring that the bank’s BSA/AML compliance program is implemented effectively, including timely updates in response to changes in regulations or business activities, and for managing all aspects of the BSA/AML compliance program. The BSA compliance officer is also responsible for ensuring that the bank’s BSA/AML compliance program is communicated to all personnel and that adequate training is provided to appropriate personnel.”

Guidelines on the role of AML/CFT compliance officers, section “Guidelines on the role of AML/CFT compliance officers”, paragraph 36: “The AML/CFT compliance officer should ensure that the institution cooperates with the competent authorities, including by providing them with all the information they require in a timely manner, in accordance with the applicable legal and regulatory framework.”

Anti-Money Laundering Compliance Officer Job Description, section “Responsibilities of an AML Compliance Officer”, bullet point 6: “Cooperate with law enforcement and regulatory bodies as required.”

One of the key components of an effective anti-money laundering (AML) program is customer due diligence (CDD), which involves verifying the identity of the customer, understanding the nature and purpose of the customer’s relationship with the financial institution (FI), and assessing the risk of money laundering or terrorist financing that the customer poses. CDD is essential for preventing and detecting the misuse of the FI’s services by criminals, and for complying with the relevant laws and regulations.

However, CDD can be challenging for FIs that offer online services to customers, as there is a greater difficulty in matching the customer with the provided identification documentation. Unlike face-to-face interactions, online services rely on electronic or remote methods of identification and verification, such as scanned copies of documents, biometric data, digital signatures, or third-party verification services. These methods may not be as reliable or secure as physical verification, and may expose the FI to the risk of identity fraud, document forgery, or impersonation. Moreover, online services may attract customers from different jurisdictions, which may have different standards and requirements for identification and verification, and may pose different levels of risk.

Therefore, FIs that offer online services to customers should implement enhanced due diligence (EDD) measures to mitigate the risk of money laundering, such as obtaining additional information or documentation from the customer, applying more stringent verification procedures, conducting more frequent and intensive monitoring of the customer’s transactions and behavior, and restricting or limiting the types or amounts of transactions that the customer can perform online.

References:

CAMS Study Guide - 6th Edition, Chapter 3, Section 3.4, page 82

Anti-Money Laundering in a Nutshell, Chapter 4, Section 4.2, page 63

Guidance on Digital Identity, Section 2, page 8

Anti-Money Laundering, The Basics: Installment 1, Section 3.2, page 5

A suspicious transaction report (STR) is a document that financial institutions must file with the relevant authorities when they detect or suspect any activity that may be related to money laundering, terrorist financing, or other criminal offences. An STR should include the details of the customer, the transaction, the reason for suspicion, and any other relevant information.

One of the indicators of suspicious activity is the use of financial instruments, such as checks, money orders, or cashier’s checks, that are drawn on other institutions and deposited in amounts under the currency reporting thresholds. This may suggest that the customer is trying to avoid the detection and reporting of large cash transactions, which is a technique known as structuring or smurfing. Structuring is illegal and may indicate that the customer is laundering money from illicit sources or evading taxes.

Another indicator of suspicious activity is the use of financial instruments that are sequentially numbered, meaning that they have consecutive serial numbers. This may suggest that the customer has obtained the instruments from the same source or issuer, and that they are using them to launder money or finance illegal activities. Sequentially numbered instruments may also indicate that the customer is involved in fraud, such as check kiting or counterfeit checks.

Therefore, if a bank conducts a quarterly review on a retail customer’s account and finds that the customer has made a number of large deposits of financial instruments drawn on other institutions in amounts under the thresholds, and that the instruments were sequentially numbered, the bank will most likely file an STR. This is because this activity does not fit the customer’s historical profile, and it raises a high level of suspicion that the customer is engaged in money laundering or other criminal activities.

References:

CAMS Study Guide - 6th Edition, Chapter 4, Section 4.2, page 108

Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering Considerations, Question 5, page 7

Anti-money laundering – handling suspicious activity, Section 6.3, page 3

Tell us about suspicious activity that may be linked to money laundering, Section 3, page 1