In the context ofgambling and gaming sectors, a well-known money laundering typology is the use of platforms tointroduce illicit funds and withdraw them as "winnings". When a customerdeposits large cash amounts and quickly withdraws themwithout engaging in actual gambling, it indicates"placement and layering"techniques.
This behavior is indicative of attempts todisguise the origin of illicit funds, converting them into legitimate- looking financial flows. It is considered a classic red flag in AML programs related to casinos and online gaming.
Reference: ACAMS CAMS Study Guide - 6th Edition, Chapter:Industry-Specific Risks- Section:Gambling and Gaming Sector Red Flags

Terrorist financing (TF) differs from traditional money laundering, as funds can originate from legitimate sources (e.g., donations, charities) and often involve low-value transactions.
Option A (Correct): Non-profits with no online presence can be shell organizations used to finance terrorism.
Option C (Correct): Small-dollar payments to high-risk jurisdictions (e.g., FATF-listed countries) may indicate terrorist funding activity.
Why Other Options Are Incorrect:
Option B (Incorrect): Crowdfunding payments with transparency and project details are generally low-risk.
Option D (Incorrect): Charities helping refugees may be high-risk but not automatically suspicious.
Option E (Incorrect): Structuring below reporting thresholds is more indicative of money laundering than terrorist financing.
Red Flags for Terrorist Financing:
Frequent low-value transactions to conflict zones.
Use of charities and non-profits as fronts for terror groups.
Funds moving through unregulated crowdfunding platforms.
Best Practices for Detecting Terrorist Financing:
Identify transactions involving known terrorist financing typologies.
Enhance monitoring of non-profit organizations operating in high-risk regions.
Use negative news screening to detect links to sanctioned entities.
Reference:
FATF Recommendation 8 (Non-Profit Organizations & Terrorist Financing)
FinCEN Guidelines on Terrorist Financing Risk Indicators
EU 6th AML Directive (6AMLD) on Terrorism Financing Controls

The bank's current anti-money laundering program is inadequate because it does not include a process for monitoring customer account activity, which is a key component of detecting and reporting suspicious transactions. The fact that the consultant and the bank have mutual clients does not affect the risk rating of those customers, nor does it justify a lower level of scrutiny. The bank should revise its procedures to ensure that it has a comprehensive and risk-based approach to customer due diligence, transaction monitoring, and reporting.
CAMS Certification Package - 6th Edition, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 67-69.
FATF Guidance for a Risk-Based Approach: Legal Professionals, pp. 10-11, 19-20.
BSA/AML Internal Audit: PwC, pp. 1-2.

Non-compliance with AML regulatory obligations can have severe consequences for financial institutions.
Among these, the most severe consequence is the loss of license. When a financial institution fails to meet AML requirements, regulators may revoke its license to operate. Losing the license effectively shuts down the institution's ability to conduct business, impacting its existence and operations significantly12.
References:
1. Unit21 AML: 8 AML Penalties, Fines, and Sanctions + Examples You Should Avoid
2. Financial Crime Academy: Ensuring Compliance: The Power Of AML Regulatory Reporting

* A: FIs should ensure they have a general understanding of virtual assets and VASP operations to assess risks accurately.
* C: Enhanced KYC measures are recommended for VASPs due to their higher ML/TF risk profile.
* "FIs must understand the business model and risk of VASPs and apply enhanced due diligence as required by FATF and regulatory guidance."(CAMS 6th Edition, Virtual Assets and VASPs; FATF Guidance) Incorrect:
* B: While monitoring transactions is important, it's not a primary initial consideration for onboarding.
* D: The FI's own holdings are not relevant to due diligence on VASPs.
References:
CAMS 6th Edition, Virtual Assets and VASPs
FATF, Guidance for a Risk-Based Approach to Virtual Assets and VASPs