CAMS Online Practice Questions

Explanation:
The Basel Committee on Banking Supervision (BCBS) is a global standard-setting body for the prudential regulation of banks. It does not have any formal authority to enforce its standards, but relies on its members’ commitment and peer pressure to implement them. The BCBS’s principles on customer due diligence (CDD) are part of its guidelines on anti-money laundering and combating the financing of terrorism (AML/CFT), which aim to enhance the soundness and integrity of banking systems. The BCBS’s principles on CDD provide guidance to banks and bank supervisors on the essential elements of a CDD programme, such as customer acceptance, identification, verification, risk assessment, monitoring, and record-keeping. The BCBS’s principles on CDD are not legally binding, but are intended to be a benchmark for national practices and for banks to design their own policies and procedures. The BCBS’s principles on CDD are consistent with the recommendations of the Financial Action Task Force (FATF), the global standard-setter for AML/CFT.
Reference: Customer due diligence for banks 1, BCBS, October 2001.
The Basel Committee on Banking Supervision report on customer due diligence 2, Journal of Banking Regulation, 2002.

Explanation:
Antiques are a potential tool for money laundering because they can be used to conceal, move, and convert illicit funds. Antiques can be of high value and often easily transported across borders, making them attractive for criminals who want to evade detection and reporting. Antiques can also be difficult to value and authenticate, creating a lack of transparency and accountability in the market. Criminals can exploit this to inflate or deflate the prices of antiques, or to use them as collateral for loans or other transactions. Antiques can also be used to layer or integrate illicit funds into the legitimate economy, by selling them through auction houses, dealers, or online platforms.
Reference: CAMS Certification Package - 6th Edition, Chapter 4: Conducting and Supporting the Investigation Process, pp. 97-98.
Anti-money laundering and the art and antiquities market - a US and UK perspective, Mishcon de Reya LLP, 2022.
Antiques: an unconventional money laundering tool, The Express Tribune, 2023.
Art and Antiquities an Attractive Market for Money Laundering, FATF Argues, OCCRP, 2021.

Explanation:
Section 319(a) of the USA PATRIOT Act enhances regulatory oversight of foreign financial institutions with U.S. correspondent accounts.
Option A (Correct): This section requires foreign banks to provide relevant AML records within 120 hours upon request from a U.S. regulatory agency.
Option B (Incorrect): This describes Section 311, which deals with special measures against foreign jurisdictions or financial institutions.
Option C (Incorrect): This is covered under Section 319(b), which permits asset seizures from U.S.
correspondent accounts.
Option D (Incorrect): This relates to Section 312, which mandates due diligence on foreign correspondent accounts and private banking. Best Practices for Compliance with Section 319(a):
Ensure the ability to produce AML-related records within 120 hours. Establish clear communication channels between correspondent banks. Monitor foreign financial institution relationships for compliance risks.
Reference: USA PATRIOT Act Section 319(a) (Regulatory Requests for AML Records) FinCEN Guidance on Foreign Bank Record-Keeping Requirements FATF Recommendation 13 (Correspondent Banking AML Controls)

Explanation:
Economic sanctions are used as a non-military tool to enforce foreign policy and national security objectives.
Option D (Correct): Sanctions aim to change the behavior of entities engaged in money laundering, terrorist financing, or other illicit activities.
Option A (Incorrect): Sanctions do not necessarily indicate military action.
Option B (Incorrect): NGOs may be exempt from sanctions, but this is not their primary purpose.
Option C (Incorrect): While human rights concerns can lead to sanctions, they are primarily imposed to change behavior.
Reference: OFAC Sanctions Guidance, UN Security Council Sanctions List, EU Sanctions Regulations.

Explanation:
The Egmont Group of Financial Intelligence Units (FIUs) is a global network of FIUs that facilitates and promotes the exchange of information, knowledge, and cooperation among its members to combat money laundering, terrorist financing, and other financial crimes1. The Egmont Group has developed operational guidance for international cooperation and information exchange among FIUs, which includes channels, procedures, and forms for making and receiving requests2. Filing a request under Egmont guidelines is therefore a common and effective way for a regulatory body to obtain international assistance in a money laundering inquiry, as it ensures that the request is made through the appropriate and secure channel, and that it meets the standards and expectations of the requested FIU.
Reference: 1: Home - Egmont Group
2: EGMONT GROUP OF FINANCIAL INTELLIGENCE UNITS OPERATIONAL GUIDANCE FOR …