Financial institutionsoperating in the EU must comply with GDPR and AML directives, ensuring a balance betweenprivacy and AML compliance.
Option B (Correct):Data minimization is a key GDPR principle, ensuring that only necessary data is collected and processed.
Option D (Correct):Strict guidelines apply to AI and machine learning models used in AML complianceto prevent bias and ensure transparency.
Why Other Options Are Incorrect:
Option A (Incorrect):FIs cannot use third parties to supplement missing customer identification unless proper KYC measures are followed.
Option C (Incorrect):Customers cannot be informed about ongoing AML investigations due to "tipping off" restrictions under AML laws.
Best Practices for AML Compliance Under GDPR:
Limit data collection to what is necessary for AML compliance.
Ensure AI and machine learning models comply with transparency regulations.
Prevent unauthorized data access through strict internal controls.
Reference:
EU GDPR Article 5 (Principles for Data Processing)
6th EU AML Directive (6AMLD) on Data Protection in AML
Wolfsberg Group Guidance on AI in AML Compliance

According to the ACAMS study guide, one of the insurance products that is particularly vulnerable to money laundering is annuity, which is "a contract that provides a series of payments over a specified period of time, usually for the life of the annuitant" (p. 223). Annuities can be used by money launderers to deposit large sums of illicit funds in a single transaction, or to receive regular payments from a legitimate source after paying the premiums with dirty money. Annuities can also be surrendered or transferred to third parties, making it difficult to trace the origin and destination of funds.
ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.
ComplyAdvantage. (2023)AML in Insurance: How to Detect & Combat Money Laundering 1. Retrieved from
https://complyadvantage.com
Financial Crime Academy. (2023)Anti Money Laundering (AML) In Insurance Industry In 2021 2. Retrieved from https://financialcrimeacademy.org

Financial institutions must conduct thorough background checks on employees in sensitive roles (e.g., private banking) to mitigate fraud, insider trading, and money laundering risks.
Option A (Correct): Past employment records help verify work history and identify any red flags related to prior financial misconduct.
Option D (Correct): Internet and media searches reveal any negative press, regulatory issues, or connections to illicit activity.
Option E (Correct): Criminal history searches help screen for prior convictions related to financial crimes.
Why Other Options Are Incorrect:
Option B (Incorrect): Personal references are less reliable and may not uncover objective risk factors.
Option C (Incorrect): A resume is self-reported and should be verified using independent sources.
Best Practices for Employee Background Screening:
Conduct enhanced due diligence for high-risk roles (e.g., private bankers, compliance officers).
Use reliable background screening tools and legal databases.
Verify employment history and check against regulatory blacklists.
Reference:
FATF Recommendation 18 (Internal Controls & Employee Screening)
Wolfsberg Group Guidance on AML Employee Background Checks
6th EU AML Directive (6AMLD) on Employee Due Diligence

The Egmont Group of Financial Intelligence Units (FIUs) is a global network of FIUs that facilitates and promotes the exchange of information, knowledge, and cooperation among its members to combat money laundering, terrorist financing, and other financial crimes1. The Egmont Group has developed operational guidance for international cooperation and information exchange among FIUs, which includes channels, procedures, and forms for making and receiving requests2. Filing a request under Egmont guidelines is therefore a common and effective way for a regulatory body to obtain international assistance in a money laundering inquiry, as it ensures that the request is made through the appropriate and secure channel, and that it meets the standards and expectations of the requested FIU.
1: Home - Egmont Group
2: EGMONT GROUP OF FINANCIAL INTELLIGENCE UNITS OPERATIONAL GUIDANCE FOR ...

Option A indicates potential money laundering activity by a lawyer, as it involves the use of a trust account to receive and transfer funds from unknown sources in high risk jurisdictions, without any apparent legitimate purpose or explanation. This could be a sign of layering, where the money launderer attempts to conceal the origin and ownership of the illicit funds by moving them through multiple accounts and jurisdictions. Option B does not necessarily indicate money laundering, as the source of the funds is a reputable entity and the transfer could be explained by a legitimate transaction or service. Option C does not necessarily indicate money laundering, as the bank draft could be a payment for a legal service or a settlement between parties.
Option D does not necessarily indicate money laundering, as the cash deposit could be a fee for a legal service or a donation, and the amount could be below the reporting threshold to avoid unnecessary paperwork or scrutiny.
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CAMS Certification Package - 6th Edition | ACAMS1
CAMS Certifications: How to Get CAMS Certified | ACAMS2
ACAMS CAMS Certification Video Training Course - Exam-Labs3
Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)4