Financial Intelligence Units (FIUs)serve as national centers for collecting, analyzing, and

disseminating AML/CFT information.

Option B (Correct):FIUs analyze SARs and STRs to detect money laundering and terrorist financing

risks.

Option D (Correct):FIUs disseminate financial intelligence to local and international law enforcement

agencies and other FIUs.

Option E (Correct):FIUs receive SARs/STRs from financial institutions, which form the basis for their

analysis.

Why Other Options Are Incorrect:

Option A (Incorrect):FIUs do not prosecute cases; they refer findings to law enforcement agencies.

Option C (Incorrect):FIUs share intelligence, but prosecution is handled by judicial authorities, not

FIUs.

Best Practices for FIUs:

Enhance data-sharing agreements with domestic and international agencies.

Use AI and analytics tools to detect suspicious financial patterns.

Ensure secure handling of sensitive AML/CFT data.

Reference:

FATF Recommendation 29 (FIU Role & Responsibilities)

Egmont Group Guidelines on FIU Information Sharing

EU 6th AML Directive (6AMLD) on Financial Intelligence Functions

According to the Anti-Money Laundering Specialist (the 6th edition) resources, the institution should

develop a system to monitor all the activity of the customer’s accounts to mitigate the risk

associated with these accounts. This is because the customer’s behavior and profile may indicate

some red flags of money laundering, such as:

Operating an import-export business, which is a common sector for trade-based money laundering,

where trade transactions are used to disguise the movement of illicit funds, either by over- or under-

invoicing, misrepresenting the quantity or quality of goods, or falsifying documents1.

Receiving funds from a jurisdiction perceived as highly corrupt, which may increase the risk of the

funds being derived from bribery, embezzlement, fraud, or other predicate offences2. Transparency

International is a global civil society organization that publishes an annual CorruptionPerceptions

Index, which ranks countries by their perceived levels of public sector corruption based on expert

assessments and surveys3.

Making frequent transfers among the accounts, which may indicate a layering technique, where

funds are moved through multiple accounts, institutions, or jurisdictions to obscure the audit trail

and the source and ownership of the funds4.

Preferring to manage the accounts separately, which may indicate a lack of transparency or an

attempt to avoid detection or reporting by the institution.

By developing a system to monitor all the activity of the customer’s accounts, the institution can:

Identify and verify the identity and beneficial ownership of the customer and the parties involved in

the transactions.

Obtain and verify information on the nature and purpose of the business relationship and the source

and destination of the funds.

Conduct a risk assessment of the customer and the transactions based on the customer’s profile,

behavior, and geographic locations.

Apply enhanced due diligence and ongoing monitoring measures for higher-risk customers and

transactions, such as obtaining additional information, documentation, or approval, or conducting

more frequent or in-depth reviews.

Detect and report any suspicious or unusual transactions or activities to the relevant authorities.

The other three options are incorrect because:

File a suspicious transaction report is not the best answer, as it is a reactive measure that should be

taken after the institution has identified or suspected money laundering or terrorist financing

activity, not before. The institution should first conduct due diligence and monitoring of the customer

and the transactions, and then file a report if there are reasonable grounds to believe that the

activity is suspicious or unusual.

Diminish the importance of the subjective Transparency International rating is not the best answer,

as it is a complacent and irresponsible attitude that may expose the institution to legal, regulatory,

reputational, or operational risks. The Transparency International rating is not subjective, but based

on credible sources and methodologies, and it is widely used as a reference by governments,

businesses, civil society, and the public to assess the level of corruption in different countries3. The

institution should not ignore or downplay the rating, but rather use it as one of the factors to

evaluate the risk of the customer and the transactions.

Conduct a trade-price manipulation analysis is not the best answer, as it is a specific and technical

measure that may not be sufficient or appropriate to mitigate the risk associated with these

accounts. A trade-price manipulation analysis is a method of detecting trade-based money

laundering by comparing the prices of goods or services in a transaction with the market prices or

other benchmarks, and identifying any significant discrepancies or anomalies. However, this measure

may not be feasible or effective if the institution does not have access to reliable and comparable

data, or if the goods or services are not standardized or homogeneous. Moreover, this measure may

not address other aspects of the risk, such as the identity, ownership, or behavior of the customer

and the parties involved in the transactions.

1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 108 2: ACAMS, CAMS Study Guide, 6th

Edition, Chapter 5, p. 107 3: Transparency International, Corruption Perceptions Index, 3 4: ACAMS,

CAMS Study Guide, 6th Edition, Chapter 5, p. 106 : ACAMS, CAMS Study Guide, 6th Edition, Chapter

5, p. 103 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 103 : ACAMS, CAMS Study Guide,

6th Edition, Chapter 5, p. 104 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 105 : ACAMS,

CAMS Study Guide, 6th Edition, Chapter 5, p. 105 : ACAMS, CAMS Study Guide, 6th Edition, Chapter

5, p. 109

United Nations (UN) sanctionsarebindingon allUN member states, but their effectiveness depends

onswift adoption and enforcement by national governments.

Option B (Correct):For UN sanctions to be effective, they must be enforced by all member

statesthroughstrong domestic legal mechanisms.

Option A (Incorrect):UN sanctions are not necessarily implemented faster than unilateral sanctions

(e.g., U.S. OFAC sanctions).

Option C (Incorrect):While UN sanctions apply internationally, enforcement depends on national

governments, making implementation inconsistent.

Option D (Incorrect):Clarity of sanction measures is important, but enforcement is the primary factor

determining effectiveness.

Key Features of UN Sanctions:

Mandated by the UN Security Council under Chapter VII of the UN Charter.

Binding on all 193 UN member states.

May include asset freezes, travel bans, and trade embargoes.

Best Practices for UN Sanctions Compliance:

Ensure national enforcement aligns with UN Security Council resolutions.

Monitor sanctioned individuals/entities through real-time screening tools.

Cooperate with international organizations to prevent sanctions evasion.

Reference:

FATF Recommendation 6 (Targeted Financial Sanctions)

United Nations Security Council (UNSC) Sanctions Guidelines

EU & OFAC Guidance on Sanctions Implementation

The decision of whether or not to file a suspicious transaction report (also known as a suspicious

activity report or SAR in the United States) often involves weighing the aggravating and mitigating

factors arising from the research conducted during the investigative process. The final decision

should be documented and supported by the reasoning that was used to make the determination.

The transaction has already been investigated which led to the requesting of the document. The

document checked out and the question did not specify the document was suspicious, therefore we

can conclude an STR does not need to be completed and thus should move to document the reason

why an STR wasn't completed.

The correct answer is C. Wires received in large, even dollar amounts are a suspicious behavior, as

they may indicate an attempt to avoid reporting thresholds or to conceal the source of funds. Large

and round numbers are often used by money launderers to simplify calculations or to avoid arousing

suspicion12. The other options are not necessarily suspicious, as they may reflect the normal

business operations of a wholesale auto business that ships vehicles internationally. The dock

shipping receipts match the vehicles (A), vehicles are regularly shipped internationally (B), and

account debits are payable to transport companies (D) are all plausible and legitimate activities for

such a business.

ACAMS CAMS Certification Video Training Course3, Module 3: Risks and Methods of Money

Laundering and Terrorism Financing, Lesson 2: Methods of Money Laundering

ACAMS CAMS Certification Study Guide1, Chapter 3: Risks and Methods of Money Laundering and

Terrorism Financing, Section 3.2: Methods of Money Laundering, pp. 79-80

AML audit findings must beanalyzed and addressed through remedial actions based on root cause

analysis.

Option D (Correct):Root cause analysis helps develop effective corrective measures to prevent

recurring AML deficiencies.

Option A (Incorrect):Retesting controls may be useful, but addressing deficiencies is more critical.

Option B (Incorrect):While the board oversees compliance, the responsibility for implementing fixes

lies with AML teams.

Option C (Incorrect):Audit teams provide findings but do not execute corrective actions.

Best Practices for Addressing AML Audit Findings:

Identify the root cause of AML control failures.

Develop risk-based remediation plans.

Implement and monitor corrective actions.

Reference:

FATF Recommendation 18 (AML Internal Controls & Audit)

Basel Committee’s Guidelines on AML Audits

Wolfsberg Group Principles for AML Risk Management

Final Thoughts:

Suspicious stock price movements can indicate market manipulation linked to money laundering.

EU AML and GDPR regulations enforce strict data minimization and AI compliance requirements.

Bearer shares, nominee directors, and tax-haven corporations increase money laundering risks.

AML audit findings should be addressed through root cause analysis and corrective actions.

Screening customers at onboarding and quarterly thereafter is not sufficient to ensure compliance

with economic sanctions, as sanctions lists may change frequently and the financial institution may

not be aware of the latest updates. Screening should occur promptly after list updates to ensure that

the financial institution is not dealing with a sanctioned individual or entity, or facilitating a

prohibited transaction. This is recommended by the international guidance from the Financial Action

Task Force (FATF) and the Wolfsberg Group12. Screening and performing enhanced due diligence on

new relationships is also important, but not the only step to ensure compliance.

CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Sanctions, page 86

The Wolfsberg Group Correspondent Banking Due Diligence Questionnaire 2014, Section 5: Sanctions

Policy, page 12

ACAMS CAMS Certification Video Training Course - Exam-Labs, Video 3.1: Sanctions

Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition),

Money launderers preferlarge-denomination billsbecause theyfacilitate bulk cash smuggling and

placement.

Option A (Correct):Increased demand for large-denomination banknotesis a knownmoney

laundering red flag.

Option B (Incorrect):Increased digital service adoption isnormal banking behavior.

Option C (Incorrect):Faster settlement times may reflecttechnology upgrades, not financial crime.

Option D (Incorrect):Maintaining a log of monetary instruments isa compliance best practice, not a

red flag.

Reference:FATF Red Flags on Cash Transactions, Wolfsberg Group AML Guidance for Banks.

These options involve transferring funds to another country, which could indicate cross-border

movement of illicit funds, and cashing out winnings in checks under 10,000 USD, which could

indicate structuring to avoid reporting thresholds. The other options do not seem as suspicious or

relevant to money laundering.

According to the CAMS Study Guide, page 173, “If an independent investigation provides grounds to

interview the employee, the employee can be interviewed and, if necessary, terminated, but not

advised that he or she is under investigation by law enforcement.” This is because informing the

employee of the law enforcement investigation could compromise the integrity of the case and

potentially expose the institution to legal liability. Therefore, option B is the correct answer.

CAMS Study Guide, page 1731

CAMS Exam Questions and Free Practice Test,