Pass Using CAMS Exam Dumps

 According to the Financial Action Task Force (FATF) 40 Recommendations, Recommendation 10 requires financial institutions to identify and verify the identity of their customers, including legal persons and arrangements, using reliable and independent sources. This includes verifying the legal existence and structure of the legal entity, such as by obtaining a certificate of incorporation, a partnership agreement, or a trust deed. Additionally, financial institutions should identify and verify the identity of the beneficial owners of the legal entity, such as by obtaining information on the natural persons who ultimately own or control the entity, or who exercise effective control over the entity.

The other options are not consistent with the FATF 40 Recommendations. Verifying the financial status of the legal entity, or the entity’s other banking relations, is not a requirement for identification purposes, although it may be relevant for risk assessment or due diligence purposes. Verifying a person purporting to act on behalf of the legal entity is also not sufficient, as the person may not be authorized or may not disclose the true identity or beneficial ownership of the entity. Verifying funds or trusts maintained by terrorists is not a specific identification requirement, but rather a general obligation to comply with targeted financial sanctions and freeze the assets of designated persons or entities.

FATF 40 Recommendations, Recommendation 10, Interpretive Note to Recommendation 10, pages 14-18.

ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 3, Section 3.2.1, page 77.

Conducting anonymous transactions is the most likely activity to facilitate money laundering through online banking systems with inadequate controls. Anonymous transactions allow money launderers to hide their identity, source and destination of funds, and the purpose of their transactions from the authorities and the financial institutions. Online banking systems that do not have proper KYC, customer due diligence, and transaction monitoring controls are vulnerable to being exploited by money launderers who can use various techniques, such as encryption, proxy servers, virtual currencies, prepaid cards, and online gambling, to conduct anonymous transactions123.

ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 40-41, 43-44

ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.4, Money Laundering Using New Payment Methods

1, Fighting money laundering in the age of online banking, virtual currencies and internet gambling | ERA Forum

2, Financial crime risk management in digital payments | McKinsey

3, The Relationship Between Digital Banking and Financial Crime

A financial institution should examine the country or location where the customer is from or does business, the type and size of the business the customer runs, and the legal structure of the customer’s business, because these factors can indicate the level ofmoney laundering risk associated with the customer. For example, some countries or locations may have weak anti-money laundering laws or high levels of corruption, some types or sizes of businesses may be more prone to generating or concealing illicit funds, and some legal structures may be more complex or opaque than others, making it harder to identify the beneficial owners or controllers of the customer.

ACAMS CAMS Certification Video Training Course1, Module 2: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Lesson 2: Know Your Customer (KYC) and Customer Due Diligence (CDD)

ACAMS CAMS Certification Study Guide2, Chapter 2: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Section 2.2: Know Your Customer (KYC) and Customer Due Diligence (CDD), Pages 42-44

Havens for money laundering and terrorist financing are jurisdictions that offer a high degree of anonymity, secrecy, and protection to criminals who seek to conceal or move their illicit funds. These havens typically have the following three attributes12:

Limited types of institutions and persons covered by money laundering laws and regulations. This means that only a narrow range of financial activities or entities are subject to anti-money laundering (AML) and combatting the financing of terrorism (CFT) obligations, such as customer due diligence, record-keeping, reporting, and supervision. For example, some havens may exclude lawyers, accountants, trust and company service providers, or non-bank financial institutions from AML/CFT requirements.

Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering. This means that the authorities in these havens lack the political will, resources, or capacity to effectively implement and enforce the AML/CFT laws and regulations. They may also impose low sanctions or fines for non-compliance, or create legal barriers or obstacles for the confiscation or freezing of assets that are the proceeds of, or used in, or intended or allocated for use in, money laundering, terrorist financing, or other crimes.

Absence of an effective FIU. This means that these havens do not have a central agency that is responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering, terrorist financing, and other crimes. An effective FIU is essential for facilitating domestic and international cooperation and information exchange, as well as for supporting investigations and prosecutions of money laundering and terrorist financing cases.

1: The IMF and the Fight Against Money Laundering and Terrorism Financing, 1 2: IX Special Recommendations, 2