In accordance with Financial Action Task Force (FATF) standards [1][2], when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit. This means that the Fl should not impose more strict requirements on host country branches, disregarding if host country laws and regulation permit such action, and should not close down its operations in the host countries where minimum AML requirements are less strict than those of the home country. However, the Fl should always apply additional measures on their branches and majority-owned subsidiaries in host countries to manage the money laundering and terrorist financing risk overseas.

A transaction monitoring system (TMS) is a tool that helps financial institutions detect and report suspicious activities related to money laundering, terrorist financing, and other financial crimes. A TMS needs to be implemented carefully and effectively to ensure its accuracy, reliability, and compliance with regulatory requirements.
One of the best practices for implementing a TMS is to perform systems integration testing (SIT) at key steps of development and user acceptance testing (UAT) prior to going live with the TMS. SIT is a process of verifying that the TMS can interact with other systems and data sources correctly and efficiently. UAT is a process of validating that the TMS meets the functional and operational expectations of the end-users and stakeholders.
By conducting SIT and UAT, the financial institution can identify and resolve any issues or defects in the TMS before it is deployed in the production environment. This can help avoid potential problems such as data quality issues, false positives, false negatives, system errors, performance issues, and regulatory breaches.
Performing SIT and UAT can also help ensure that the TMS is aligned with the financial institution's risk assessment, policies, procedures, and controls.
References:
Step 1 - Transaction Monitoring Implementation Best Practices
Anti-money laundering transaction monitoring system implementation considerations ACAMS CAMS Certification Study Guide 6th Edition

Wash trading is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled.
Wash trading is a form of market manipulationthat creates artificial trading activity and volume, and may be used to evade taxes, inflate prices, or launder money. Wash trading can also involve the use of third parties or intermediaries to conceal the true identity and source of funds of the trader.
= The main references for this question are the following sources:
The document titled "Money Laundering and Terrorist Financing Typologies and Trends in Canadian Securities Dealers" published by the Investment Industry Regulatory Organization of Canada (IIROC) in December 2019. You can access it by clicking here. This document states that "Wash trading is a form of market manipulation where an individual simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. Wash trading is illegal under securities law because it misleads investors and regulators about the true supply and demand of the securities involved. Wash trading can also be used to evade taxes, inflate prices, or launder money." The document titled "Market Manipulation" published by the Financial Industry Regulatory Authority (FINRA). You can access it by clicking here. This document states that "Wash sales are a form of market manipulation in which an investor simultaneously sells and buys the same security to create misleading, artificial activity in the marketplace. Wash sales are illegal under Section 9(a)(1)(A) of the Securities Exchange Act of 1934. Wash sales can be used to manipulate the price of a security, evade taxes, or launder money."

Money Services Businesses (MSBs)are commonly recognized by regulatory and supervisory authorities as havinghigher inherent AML/CFT risk, particularly due to certain business characteristics.
Option B - The prevalence of international wire transfers:
MSBs often facilitatecross-border transactions, which present a higher money laundering and terrorist financing risk due to challenges in verifying customer identity, the origin of funds, and the end destination- especially when dealing with higher-risk jurisdictions.
Option D - The cash-intensive nature of the services offered:
Many MSBs deal primarily incash, which increases the risk ofanonymous transactionsandfunds layering, making it harder to trace illicit activity. Cash is the most vulnerable medium for placement of illicit funds into the financial system.
Option AandOption E, while involving modern technologies,can actually reduce riskwhen implemented with proper controls (e.g., secure digital onboarding and traceable payments enhance auditability).
Option Cdoes not in itself signal high AML risk unless combined with other red flags.
Reference: ACAMS CAMS Study Guide - 6th Edition, Chapter:Industry-Specific Risks- Section:Money Services Businesses (MSBs) and Their Risk Characteristics

The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a process known as mutual evaluation. This process involves peer reviews, where experts from other member countries assess the technical compliance and the effectiveness of a country's anti-money laundering and counter-terrorist financing (AML/CTF) framework. The FATF has developed a methodology that identifies 11 key areas, or immediate outcomes, that an effective AML/CTF system should achieve, and uses them as the basis for the mutual evaluation. The FATF publishes the mutual evaluation reports, which provide an in-depth analysis of the strengths and weaknesses of each country's AML/CTF regime, as well as recommendations for improvement.
1: An effective system to combat money laundering and terrorist financing, FATF, February 2013.
2: Report on the State of Effectiveness and Compliance with the FATF Standards, FATF, June 2021.
3: Financial Action Task Force (FATF) | Meaning, Functions, Impact, Finance Strategists, September 2023.
4: FATF Recommendations, FATF, October 2020.