Privacy anddata protection restrictionsplaced uponfinancial institutions (FIs) in the EUrequire that FIs must: (Select Two.)
Correct Answer: B,D
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
CAMS Exam Question 182
The bank's internal financial intelligence unit (FIU) has reviewed activity related to a politically exposed person (PEP); the activity in the account contains a large, round number, one time wire to an obscure organization. Which would not be a sufficient reason to file a SAR/STR?
Correct Answer: B
The bank's reputation is not a valid criterion for filing a SAR/STR, as it is not related to the objective assessment of the suspiciousness of the transaction or the activity. The bank should file a SAR/STR based on the facts and circumstances of the case, and not on the potential impact on its image or reputation. The other options are possible indicators of money laundering or terrorist financing, and could warrant a SAR/STR filing,depending on the context and the risk profile of the customer and the transaction. For example, a large, round number wire to an obscure organization could suggest an attempt to conceal the source or destination of the funds, or to support a criminal or terrorist entity. A beneficiary that is largely unknown or has no apparent connection to the customer could indicate a lack of transparency or a false identity. A customer activity that is unreasonable or inconsistent with the customer's profile, business, or expected behavior could indicate a deviation from the normal or legitimate purpose of the account or the transaction. CAMS Certification Package - 6th Edition, ACAMS, Chapter 5, page 123 CAMS Certifications: How to Get CAMS Certified, ACAMS Suspicious Activity Reporting - Overview, FFIEC, page 2 3.2. Basic Structure of an STR or SAR, CBUAE Rulebook, page 1 What is a suspicious activity report?, Thomson Reuters How to decide if SAR filing is needed, Wipfli STR (Suspicious Transaction Reports), Ministry of Finance, India
CAMS Exam Question 183
Which of the following is a critical consideration for private sector firms when sharing data and intelligence to combat financial crime?
Correct Answer: C
CAMS Exam Question 184
A foreign bank's compliance officer receives a request for information from a US bank, alerting the foreign bank to the possibility that it may have transferred funds on behalf of an Office of Foreign Assets Control (OFAC>-sanctioned person, who holds an account with the foreign bank. Which statements are true with respect to said funds and the information in relation to the transaction under scrutiny? (Select Two.)
Correct Answer: A,C
According to the USA PATRIOT Act, US authorities do have the power to subpoena records from foreign banks that maintain correspondent accounts with US banks. This is known as a "section 314(a) request," which allows law enforcement to obtain information related to suspected terrorist financing or money laundering. However, US authorities are not limited to seizing only funds transferred under OFAC sanctions if there is an equivalent UN sanctions regime that has been contravened. The US government can impose its own sanctions that are independent of the UN, and can seize funds or take other actions to enforce those sanctions. Therefore, the correct answers to the question are A and C: A: If the funds are seized, then the foreign bank would be within its rights to dispute such seizure. C. The USA PATRIOT Act authorizes the Secretary of the Treasury or the Attorney General to subpoena records from the foreign bank that maintains a correspondent account with a US bank.
CAMS Exam Question 185
A bank in an offshore jurisdiction approaches an institution about opening a new correspondent banking relationship. Prior to opening the account, the new account representative obtains copies of the offshore bank's anti-money laundering policies and procedures, and all appropriate legal documentation for the bank; ascertains no third parties will be able to access the accounts; and determines the owners of the bank, the bank's primary business activities, and the business address of the bank. Which of the following steps does the Basel Committee on Banking Supervision's Customer Due Diligence for Banks Paper recommend the banker take prior to opening Oils correspondent account? 1. Conduct a site visit and meet all the principals and beneficial owners in person. 2. Verify the bank has a physical presence in the country where it is incorporated. 3. Confirm the bank is subject to regulatory supervision with adequate anti-money laundering laws. 4. Obtain and maintain a complete listing of the correspondent bank's customers, including politically exposed persons.
Correct Answer: C
The Basel Committee on Banking Supervision's Customer Due Diligence for Banks Paper recommends that banks should verify the bank has a physical presence in the country where it is incorporated and confirm the bank is subject to regulatory supervision with adequate anti-money laundering laws before opening a correspondent account. These steps are intended to prevent the establishment of relationships with shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. Shell banks pose a high risk of money laundering and terrorist financing, as they can be used to hide the identity and source of funds, evade regulatory oversight, and facilitate illicit transactions. Therefore, banks should conduct enhanced due diligence on correspondent banks that operate in offshore jurisdictions, where the regulatory standards and transparency may be lower or insufficient. ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4, Section 4.3.1, p. 1091 ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 2, Task 2.2, p. 52 Basel Committee on Banking Supervision, Customer Due Diligence for Banks, October 2001, p. 13-143
