ACAMS CAMS Based on Real Exam Environment

During an internal investigation, employees should be instructed to do the following actions:

Inform counsel of all request for documentation: This is to ensure that the legal rights and obligations of the organization and the employees are protected and respected. Counsel can also advise on the scope, relevance, and confidentiality of the requested documents1.

Make copies of all documents provided to law enforcement: This is to maintain a record of the information that has been disclosed and to prevent any loss or alteration of the original documents. Copies should be made before the documents are handed over to law enforcement2.

Keep a log of the documents requested: This is to track the progress and status of the investigation and to avoid any duplication or omission of the requested documents. The log should include the date, time, description, and location of the documents, as well as the name and contact details of the person who requested and received them3.

Providing corporate documents directly to law enforcement, on the other hand, is not an action that employees should be instructed to do during an internal investigation. This is because law enforcement may not have the legal authority or the proper warrant to access the documents, and doing so may violate the privacy or confidentiality of the organization or the employees. Employees should consult with counsel before providing any documents to law enforcement4.

References:

1: Internal money laundering reporting | The Law Society5 2: How to Conduct Effective AML Investigations - Blog | Unit212 3: What Is The Importance Of An Internal Investigation?4 4: Anti-Money Laundering: 5 Steps to Conduct an Audit3

Trade-based money laundering (TBML) is a method of disguising and moving illicit funds through the international trade system. Criminals often manipulate various aspects of trade transactions, such as pricing, quantity, documentation, and commodity type, to transfer value and obscure the source of funds. Some of the common red flags that may indicate TBML are:

The transaction involves the use of front (or shell) companies: Front or shell companies are entities that have no physical presence, no employees, and no business activity, but are used to facilitate money laundering. They often have vague or generic names, are registered in secrecy jurisdictions, and have no available ownership information. In this case, ABC Holdings Ltd. and Sunrise Holdings Ltd. could be front or shell companies that are used to launder money through trade transactions.

The type of commodity being shipped appears inconsistent with the exporter or importer’s regular business activities: Criminals may use commodities that are unrelated to their core business or that have low correlation with the market price to launder money. They may also use commodities that are difficult to value, verify, or trace, such as precious metals, gems, art, or antiquities. In this case, the automotive parts company and the silk flower supplier seem to have no logical connection, and the value of the silk flowers may be inflated or deflated to transfer funds.

References:

Trade-Based Money Laundering: Risk Indicators - Financial Action Task Force, pp. 9-10, 14-15

Identifying TBML: 8 Trade-Based Money Laundering Red Flags - Alessa, pp. 1-2

FFIEC BSA/AML Appendices - Appendix F – Money Laundering and Terrorist Financing Red Flags, p. 7

AML Red Flags – What are the Top 10 Indicators? - ComplyAdvantage, p. 1

 The important fact to include in the STR is the recent change in the timing of deposits and withdrawals in the account, as this indicates a possible change in the customer’s source and use of funds, and may suggest money laundering or other illicit activity. The customer’s work history, the amount of his monthly retirement check, the fact that he is well known to the bank staff, and the fact that he has lived in the area and banked at this bank for 25 years are not relevant for the STR, as they do not explain the unusual pattern of transactions in his account.

References:

CAMS Certification Package - 6th Edition | ACAMS, Chapter 4: Conducting and Supporting the Investigation Process, page 131

CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Examination Preparation, page 8

ACAMS CAMS Certification Video Training Course - Exam-Labs, Video 4.2: Suspicious Transaction Reporting

Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 97

According to the FATF typology report 2000-20011, lawyers can provide a range of functions that can be useful to a potential money launderer, such as:

Creating complex legal arrangements, such as trusts, foundations, or corporations, that can obscure the identity and ownership of the beneficial owners or the origin and destination of the funds.

Buying and selling property, such as real estate, art, or jewelry, that can be used to transfer or store illicit proceeds or to provide a legitimate cover for the source of funds.

Performing financial transactions on behalf of a client, such as opening bank accounts, transferring funds, issuing checks, or exchanging currencies, that can facilitate the movement or concealment of illicit funds.

Providing legal advice, on the other hand, is not a function that can be directly exploited by a money launderer, unless the advice is related to the above functions or to the avoidance or evasion of anti-money laundering laws and regulations.

References:

1: FATF Terrorist Financing Typologies Report - Financial Action Task Force2