According to the Anti-Money Laundering Specialist (the 6th edition) study guide, an effectiveanti-money laundering program should be subject to periodic independent testing by a qualified party, such as an internal or external auditor, a consultant, or a compliance professional1. This ensures that the program is compliant with the applicable laws and regulations, and that it meets the standards of sound risk management and internal controls2. The regulatory authorities, a member of senior management, or the anti-money laundering specialist may not have the necessary expertise, objectivity, or independence to conduct a thorough and unbiased evaluation of the program.
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1: CAMS Study Guide, 6th Edition, Chapter 2, Section 2.3, page 51
2: CAMS Study Guide, 6th Edition, Chapter 2, Section 2.4, page 52

Option B is closest to the definition of money laundering provided by the United Nations Convention against Transnational Organized Crime and Other Protocols, which states that money laundering is "the conversion or transfer of property, knowing that such property is the proceeds of crime, for the purpose of concealing or disguising the illicit origin of the property or of helping any person who is involved in the commission of the predicate offence to evade the legal consequences of his or her action". In this scenario, the person is knowingly financing a resort development with the proceeds of arms trafficking, which is a crime, and thus concealing or disguising the illicit origin of the property.: = 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 United Nations Convention against Transnational Organized Crime and the Protocols Thereto

The USA PATRIOT Act imposes several requirements on U.S. financial institutions when dealing with foreign financial institutions, especially those that pose a high risk of money laundering or terrorist financing.
Two of these requirements are:
* Performing enhanced due diligence on shell banks: A shell bank is a bank that has no physical presence in any country and is not affiliated with a regulated financial group. The USA PATRIOT Act prohibits
U.S. financial institutions from opening or maintaining correspondent accounts for shell banks, and requires them to take reasonable steps to ensure that their correspondent accounts are not being used by shell banks indirectly12.
* Performing due diligence on correspondent accounts: A correspondent account is an account established by a financial institution to receive deposits from, make payments on behalf of, or handle other financial transactions for a foreign financial institution. The USA PATRIOT Act requires U.
S. financial institutions to collect and verify certain information about the foreign financial institution, such as its ownership, licensing, and anti-money laundering policies, and to assess the risk of money laundering or terrorist financing associated with the correspondent account13.
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CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pages 82-84 CAMS Certifications: How to Get CAMS Certified |ACAMS, Candidate Handbook, page 14 ACAMS CAMS Certification Video Training Course - Exam-Labs, Video 3.4: Correspondent Banking and Money Laundering Risks

"Transaction Monitoring Systems and Ongoing Monitoring: Since the transactional monitoring system is key to mitigating ML risk within the bank, the Committee recognizes that AML risks require more than just appropriate policies and procedures; banks must have adequate and appropriate monitoring systems. For most banks, this will involve an IT monitoring system. If the bank does not believe it needs an IT monitoring system, it should document the rationale for why it does not need one.

Money laundering can have serious consequences for financial institutions. They may face increased investigation costs and fines from regulators and law enforcement agencies for failing to detect or prevent money laundering activities. Additionally, money laundering can result in a loss of profitable business as customers and counterparties may no longer want to do business with the institution due to its reputation for being associated with illicit activity.
Reference: Certified Anti-Money Laundering Specialist (CAMS) Study Guide, 6th Edition, page 76.