Free and Premium ACAMS CAMS Dumps Questions Answers

include sophisticated and automated controls that use the newest types of technology available (for example, artificial intelligence (Al) and machine learning).

be proportionate with regard to the size and nature of the firm, approved by senior management, and regularly reviewed

be completed by the business and validated by an external firm (for example, an auditing or consulting firm)

be created approved, and owned only by the First Line of Defense business team, and reviewed annually

to force developing nations to adopt liberal or substantive democracies.

to support governments and regimes in the peaceful resolution of conflict.

to punish governments for having weak financial crime controls.

to deter non-democratic and non-constitutional changes within countries.

to support the protection of human rights.

Pre-populated templates for SAR filing

Integration of open-source tools to gather real-time intelligence

Automated case prioritization based on risk scoring

AI-powered dashboards summarizing flagged transactions

Cryptoassets can be transferred across borders quickly, but the volatility of their value still makes them less attractive for money laundering compared to traditional assets

Mandatory reporting requirements have been implemented for certain types of crypto transactions, but gaps in regulation and enforcement still leave room for money laundering activities.

The transparency of blockchain technology helps law enforcement trace transactions, but it can also provide criminals with ways to obscure their financial activities through complex layering techniques.

The pseudonymous nature of transactions allows criminals to hide their identities while transferring large sums of money globally, making it difficult to trace the ultimate beneficial owner.

The foreign bank must always request approval by its national anti-financial crime authority to share any information cross-border.

The bank should report this to the Financial Crimes Enforcement Network (FinCEN) and receive formal guidance before sharing the information.

The bank should consider jurisdictional privacy requirements and its own policies and procedures to determine what information to share.

The information should only be shared on a need-to-know basis.

Ensure that the second line reviews, monitors, and escalates risk-related issues as needed to senior management while maintaining independent oversight from the third line

Have senior management handle risk-related issues directly when possible because they are ultimately responsible for the organisation's overall risk management strategy

Delegate some risk-related issues to the first line to avoid overwhelming the second line and to ensure operational efficiency

Assign risk-related oversight duties to the third line to provide an independent review and address issues more effectively by avoiding conflicts of interest in the first and second lines

A client frequently submits financial statements much earlier than required appearing overly eager

A client insists on using a personal bank account for business transactions despite being advised otherwise

A new client shows a preference for minimal direct interaction and relies primarily on indirect communication methods, citing convenience or time constraints

The client is a publicly listed company but very diversified

The ultimate beneficial ownership is unclear

Send a 314(b) request to the corporation's bank in Hong Kong

Call the receiving individual to review identity verification documents

Confirm that neither the beneficiary nor the originator are sanctioned parties

Request supporting documents, including invoices and contracts to confirm the purpose of the payment

Check for negative news in public sources on the sender and receiver

Adversary governments using sophisticated attacks to threaten critical infrastructure and sectors, including finance, health care and energy

Networks of individuals and entities exploiting financial systems to move funds that will be used to acquire weapons of mass destruction or their components

Transnational criminal organizations expanding their engagement into more varied types of illicit activities, including human trafficking and corruption

Networks of individuals and entities raising funds to further proliferate their ideological goals wholly or in part through unlawful acts of force or violence

Inviting prospective customers for an onboarding interview

Rejecting any politically exposed persons (PEPs) as customers

Understanding the source and origin of assets

Performing negative news checks of prospective customers

Producing financial stability reports on interesting customers

reputational risk.

the customers personal relationships.

the frequency of account activity

the Fl's policies and procedures.

the seriousness of the underlying conduct.

correspondence with law enforcement

the legal basis for closing the account.

Ensuring the structure is reviewed by an outside auditor or consultant

Establishing a system of internal controls commensurate with the institution’s size and complexity

Designating a qualified board of directors to monitor day-to-day compliance

Establishing clear roles and responsibilities for AFC risk escalations and issues

The bank is likely to face secondary sanctions from global financial institutions despite addressing many of the previous concerns.

The bank may face civil or criminal penalties if it is unable to demonstrate sustained improvement in addressing the previous concerns.

The bank may face the risk of regulatory orders to remediate its AML program despite addressing many of the previous concerns.

The bank is protected from reputational risk arising from any regulatory action because regulatory orders must remain confidential.

The regulatory agency may require the bank's board of directors to publicly share the actions taken to address the previous concerns in order to limit its reputational risk.

The family members and close associates of PEPs may be involved in illicit activities.

PEPs are granted unlimited credit and financial immunity under international banking regulations.

PEPs may exploit embassy activities to conceal bribery and corruption transactions.

PEPs can have illegitimate fund sources but are legally protected from having their accounts closed for activities outside a bank's risk appetite.

buy in-game items with virtual in-game currencies.

exchange in-game items with other players.

trade in-game items with other players that can be exchanged for fiat currency

obtain in-game materials by performing in-game activities.

International cooperation provides actionable information to use against criminals

Those convicted of money laundering offenses are denied access to basic banking services

Money laundering offenses are investigated and criminally prosecuted

Financial intelligence information is collected by authorities and shared with the FATF for further investigation

Supervisors regulate financial institutions and non-bank financial institutions and their risk-based AML/CFT programs

Independent compliance testing

Qualified and knowledgeable staff

Third-party screening software

An automated monitoring system

Written policy and procedures

The payment of company secretarial retainer fees to a foreign company in a tax-efficient jurisdiction

The payment of virtual offices services overseas

Inter-company loans from the holding company to the subsidiary company to finance the shipment of machinery

The payment of consultancy fees to unrelated companies and service providers established in a foreign jurisdiction

The preference of upper management regarding which teams should participate in the data-sharing initiative

The cost of the data-sharing system and whether it its within the existing IT budget

The potential return on investment (ROI) from the data shared versus the financial crime prevention effort

Ensuring that the shared data complies with applicable data protection regulations while maintaining the integrity and accuracy of the information

applying uniform controls to all customers, regardless of their risk profile

allocating resources and implementing controls based on the level of identified risks

prioritizing regulatory compliance over customer experience and operational efficiency

relying on automated systems to detect and mitigate AFC risks

Address control of payments in EU countries to reduce money laundering.

Build a network of financial institutions that work together to prevent money laundering across the EU.

Establish a consistent regulatory environment across the EU to prevent money laundering.

Allow member states to discuss the draft legislation with the cooperation of the EU financial intelligence units.

Advise further clarification is necessary, including which coins or tokens were sold and whether the crypto exchange conducts due diligence on its clients

Advise that the transaction should be stopped because cryptoassets in general are not regulated and by definition pose an unacceptable AML risk for the bank

Confirm to the advisor that the customer can proceed with the transaction if the client's KYC is up to date and a search on a public blockchain explorer does not provide any adverse media hits

Confirm to the advisor that the customer can proceed with the transaction because clients are already correctly onboarded KYC is complete and the source of funds is transparent

The buyer is using high-value real estate transactions to obscure the origin of the funds.

The buyer is quickly diversifying their investment portfolio through structuring payments in order to take advantage of the liquidity of cash transactions in real estate.

The buyer is capitalizing on favorable market conditions and using cash purchases to outbid competitors in a competitive real estate market using insider information.

The buyer is a real estate developer acquiring multiple properties for a potential redevelopment project with a business partner located in a high-risk jurisdiction.

Establishing risk controls

Assessing risk controls

Ongoing risk monitoring

Conducting a risk assessment

Suggest the FI needs to implement a risk-based approach for EDD.

Suggest the management team select the clients that are chosen for EDD.

Suggest the management team ask the regulator for advice on EDD measures.

Suggest EDD for 50% of the clients is appropriate.

ensure that all adverse media sources are comprehensively analyzed without the need for human review.

significantly reduce human errors arising from repetitive tasks by delivering consistent and highly accurate analysis.

instantly identify intent behind media articles, allowing for more effective risk scoring.

automate the process of identifying new information and distinguishing it from previously encountered data.

cover multiple languages and scripts, surpassing the limitations of human linguistics.

It produces outputs that include a range of intermediate possibilities between "Yes" and "No"

It is an advanced analytics tool widely used to implement AFC controls

It allows for a greater number of exact matches, reducing the need for manual review

It is a new technique for enhancing the quality of alerts for review

Helping Financial Intelligence Units (FIUs) to analyze the suspicious activity reports (SARs)

Directly prosecuting money launderers in court

Providing financial assistance to governments to strengthen their anti-money laundering efforts

Raising awareness about the issue of money laundering and its consequences

US anti-money laundering regulations are stricter than the EU AML Directives, making it easier for the global bank to be compliant in the EU

US and EU regulations require the bank to build separate compliance teams, making it necessary to establish completely separate systems for US and EU operations

The EU's sanctions regime is stricter than that of the US Office of Foreign Assets Control (OFAC), so the bank must prioritize compliance with EU regulations over US laws and train the staff in Europe accordingly

Balancing compliance with the US BSA and OFAC sanctions while ensuring adherence to EU AML directives and the GDPR, which complicates cross-border data sharing

increased reputation risk.

inclusion on the UN Consolidated List.

civil and criminal penalties

delisting of public filing status.

The agent requested a disposal of assets at a lower price than recently acquired.

The assets acquired through an auction were put in the name of an offshore company

The agent acted on behalf of an individual residing in a country which is on the EU's list of high-risk jurisdictions

The power of attorney was issued by a law firm in a different EU country from where the transaction took place.

An existing local league footballer trying to open a bank account with a bank in their local jurisdiction

The current prime minister of a country trying to open a bank account in another country

The former personal secretary to the minister of transport in a low-risk country 25 years ago opening a bank account at a bank in a neighboring low-risk country

A bank located in a higher risk country trying to establish a correspondent-respondent banking relationship with a bank in a lower-risk country

An individual with a current bank account who resides in one country becoming the ambassador of another country

Memorandum of Agreement.

Declaration of Understanding.

Memorandum of Understanding.

Mutual Legal Assistance Treaty.

Request for Urgent Information.

wire transfers in different currencies between accounts held at different banks for the same client.

an incoming third-party wire transfer followed by the purchase of real estate in the client's name.

an incoming wire transfer followed by the loan payment to a third party that is a business associate of the client.

multiple wire transfers sent to counterparties associated with the client as per KYC documentation.

fraudulent identities involving stolen or manufactured identification.

suspicious behavior involving a transaction that occurs at an unusual time of day.

hidden beneficial owners.

transaction patterns involving transactions that exceed a certain dollar amount.

anomalies involving a transaction that occurs in a location far away from the customer's usual spending patterns.

using shell companies or trusts for privacy, lax planning, or asset protection.

in the names of unrelated thud patties.

using the proceeds from selling a prior property or liquidating investments to make an all-cash purchase

using legal entities and intermediaries to protect the privacy of the purchasers.

using loans backed by cash or certificates of deposit.

Challenge-response

Fingerprint

Security token

Passphrase

Attempts to circumvent or evade sanctions imposed by the UNSC can constitute a criminal offense if designated under local laws and regulations

The UN can impose arms embargoes but cannot prohibit direct or indirect exports of other goods to specific countries

Member countries of the United Nations are expected to implement and enforce sanctions imposed by the UNSC

Direct breaches of sanctions imposed by the UNSC constitute a criminal offense in all member countries

Using predefined rules to flag specific transaction patterns

Randomly flagging transactions for further investigation

Statistical tuning of monitoring scenarios to improve accuracy

Using advanced machine learning models to detect outliers

Setting transaction thresholds for automated alerts

how an organization defines Its risk-based approach.

how an organization determines its key risk and performance indicators.

the level and type of risk the organization is willing to take to meet its objectives

the purpose of an organization's financial crimes compliance program.

Enterprise-wide risk assessments and the employee handbook for any limitations on sharing commercially sensitive customer data

The risk rating of the customers to avoid sharing data relating to higher risk customers

The organization's AML compliance policies to ensure that customer data can be easily shared internally and internationally

Applicable data privacy laws in relevant jurisdictions and the organization's data security and privacy policies for any limitations

Sponsoring the research and development of advanced technological surveillance tools to be used nationally

Prosecuting significant cases of money laundering or terrorist financing falling under national jurisdiction

Sharing real-time criminal intelligence gathered from national law enforcement agencies with the private sector

Serving as a national center for the collection and analysis of suspicious activity

Adverse media databases

Publicly available information on non-government data repositories

Credit reference agencies

Beneficial ownership registers available in country of incorporation of entity

Types of payment messages

Customers

Third-party service providers

Customer spouses

Subscribing lo a regulators' newsletter

Using a specific provider for regulatory horizon scanning

Regularly contacting the regulator to inquire about updates and future developments

Relying on information and insights from peers and working groups

Conduct an open-source intelligence investigation using artificial intelligence tools to gain more information on the activities of the suspected employee

Use the FI's whistleblowing channel to report the suspected employee

Question their co-worker to determine if their suspicions are correct before reporting to the FI's Human Resources department

Warn colleagues and customers of the FI that the employee's suspicious financial investment proposals could be a scam

Report the suspected employee to the line manager of the FI to take the required action

difficulty in tracking the originator, recipient, and source of transactions.

remote verification of identity by third-party program managers.

heavy usage by senior political figures.

informal networks used for cross-border transactions outside of the formal banking system.

heightened risks of returned transactions.

Inquiring about the source of wealth and source of funds

Asking to provide a list of immediate family members

Verifying the financial crime awareness of the client

Collecting necessary documents to verify the veracity of information

The principal activities of the proposed company are importing and exporting new furniture

The prospective client presents confusing details about the proposed business and has very little knowledge about the proposed business activity

The prospective client is unable to provide information about the beneficial owners

The prospective client exhibits confidence when speaking to the accountant when providing personal details

The prospective client is able to provide source of funds and source of wealth documents

Money services business (MSB)

Multinational corporations

Individual foreign customers

Non-profit organizations with international operations

Ongoing monitoring

Risk assessment

Policies and procedures

Suspicious activity reporting

Customer due diligence

Ensuring the tools are compatible and integration with current systems is possible

Assessing whether internal staff members can provide training on the tools

Assessing the cost of implementation and cost of maintaining the tools

Basing business requirements on the features offered by the vendor's tools

Exchange operational information between public authorities and obliged entities

Exchange strategic information between FIUs and obliged entities

Exchange strategic information between financial institutions

Create a common database of key information and share analysis of suspicious activities with FATF

A relationship manager advocates for overriding the results of the company's client risk rating model that resulted in a client's high-risk rating.

An If employee shares information about a firm's risk management framework with employees of other firms at an industry convention.

An investigator does not complete the automated transaction monitoring system alerts assigned to them before the time required by company procedures.

A relationship manager makes an exception to company policy and proceeds with onboarding a customer without documenting a passport for customer identification

Section 319(b)

Section 314(b)

Section 314(a)

Section 319(a)

Inform local LEA and regulator of the request for awareness

Close the client's accounts immediately to avoid any undue risk

Review the client's activity, determine if suspicious activity exists, and report accordingly

Advise the LEA that the government needs to be contacted for extradition

Comply immediately with the foreign jurisdiction and turn over all client information

A customer being hesitant to provide beneficiary name or address information when sending international wire transfers

Cash-intensive businesses, such as convenience stores or restaurants, making large cash deposits

A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under the reporting threshold

A customer using multiple accounts under different names to conduct transactions

A customer completing frequent small-dollar international money transfers to their native country

Cash access from a pre-paid card increases the potential that the card will be used for money laundering purposes.

Transaction monitoring examines the relationship between due diligence information and account closings.

Account and transactional activity are monitored after the proper identification and verification of customers.

Numbered or alternate name accounts will only be accepted if the bank has established the identity of the client and beneficial owner.

Whether the vendor has documented appropriate internal controls for designing system and data integration schema

Whether the permissions and user access settings for reviewing, investigating, and reporting details of alerts generated by the system are commensurate with those in use at other banks

Whether the monitoring system is adequate with respect to the bank's size, activities, complexity, and risks

Whether the monitoring system can be configured to enable the bank to execute trend analysis of transaction activity and to identify unusual business relationships and transactions

Forming a trust on behalf of a customer with a complex setup and acting as a nominee director

Auditing a firm that provides payroll software to large corporate customers

Preparing financial statements for a listed or a privately owned firm

Providing tax advice to an international customer hoping to move their assets out of their home country

Assisting an offshore corporation from a jurisdiction with no available beneficial owner information to buy property in the UK

identify and address the current financial crime trends through the issuance of typologies originating in members outside of their FSRB's Jurisdiction.

provide AM L/C FT technical assistance needed by members in their FSRB junsdiction.

coordinate technical assistance for members in their FSRB jurisdiction

set and amend the FATF 40 Recommendations for members in their FSRB jurisdiction.

identify and address any gaps in the AML/CFT policies for members outside of their FSRB jurisdiction.

offer mutual evaluation and follow-up processes for members in their FSRB Jurisdiction.

Submit a referral to file a suspicious activity report (SAR)

Evaluate the KYC review process to understand why the review did not occur as required and take corrective action as necessary

Contact the customer's relationship manager to suspend account access until the periodic KYC review is completed

Remove the customer from the bank's high-risk list

Periodic and ad hoc cooperation with the legal team to appropriately investigate and monitor the transactions of subjects of subpoenas or government inquiries

Periodic review of client profiles to ensure that the most up-to-date information is on file for high-risk clients in line with the bank's internal policies and procedures

Periodic review of suspicious activity reports (SARs) filed with FinCEN to determine whether any should be withdrawn

Periodic review of the transaction monitoring scenarios and their productivity to ensure that appropriate AML typologies are reflected

The head office of a foreign legal entity which has a branch in the US does not need to comply with OFAC rules.

A foreign individual visiting the US for a short vacation is obligated to follow OFAC rules.

Nationals of the US must comply with OFAC rules, regardless of where they are located in the world.

Any foreign corporation is also penalized if it conducts transactions with sanctioned countries under OFAC rules.

A subsidiary of a legal entity of the US, which is formally registered in a foreign country, is exempt from OFAC rules.

The European Commission and the High Representative issue a joint proposal for an import ban on refined oil products.

The European Commission and the High Representative issue a joint proposal for an import ban on oil extraction equipment

The Council of the European Union adopts a new export control regime for electronic equipment

The Council of the European Union adopts a new import restriction regime for goods coming from countries that do not respect human rights

Restrict the client's access to the account

Request information from the relationship manager assigned to the account that caused the alert

Perform below-the-line testing to ensure the automated monitoring system is operating effectively

Send a request for information to the counterparty bank involved in the transaction that caused the alert

Devaluation

Smart contract vulnerabilities

Potential for anonymity

Global reach

High transaction fees

Use to layer illicit funds

PPPs improve financial crime detection and prevention by sharing intelligence between banks and law enforcement.

PPPs help banks reduce compliance costs by automating information sharing.

PPPs allow banks to manage their own suspicious activity report (SAR) filing process without the need to involve the Financial Intelligence Unit (FIU).

PPPs maximize the efficiency of the bank's compliance program by providing real-time intelligence from law enforcement.

Disseminate analysis of suspicious transaction and suspicious activity reports to foreign judicial systems to enhance their anti-money laundering and terrorist financing investigations and prosecutions

Receive reports of suspicious transactions and suspicious activities from reporting institutions or obliged institutions

Disseminate the analysis of suspicious transaction and suspicious activity reports to local law enforcement agencies and foreign FIUs to combat money laundering

Investigate and where appropriate prosecute all suspicious transaction and suspicious activity reports received from reporting institutions or obliged institutions

Analyze all suspicious transaction and suspicious activity reports received from reporting institutions or obliged institutions

Cash-intensive businesses risks

Unknown third-party risks

Geographic risks

Anonymous transactions risks

All US citizens and permanent residents while located in the US, all US incorporated entities and their foreign branches, and all individuals within the United States

All US citizens and permanent residents regardless of where they are located, all US incorporated entities excluding their foreign branches, and all individuals and entities within the United States

All US citizens except those with dual nationality, US permanent residents, all US incorporated entities, and all individuals within the United States

All US citizens and permanent residents regardless of where they are located, all US incorporated entities and their foreign branches, and all individuals and entities within the United States

Regulatory authorities primarily work independently but share information when requested by international law enforcement agencies.

FIUs primarily handle reporting from financial institutions, while regulatory authorities and law enforcement agencies are limited to enforcing domestic AML laws without international cooperation.

Law enforcement agencies and FIUs only cooperate during domestic investigations, leaving cross-border investigations to international organizations like INTERPOL.

Regulatory authorities, law enforcement agencies, and FIUs share intelligence and coordinate efforts to streamline cross-border money laundering investigations, often through formal agreements.

The customer is attempting to convert illicit funds into “clean” withdrawals

The customer is attempting to avoid high fees by minimizing gambling activity

The customer is testing the gaming platform’s payout system for potential fraud

The customer is a high-risk gambler who regularly places large bets

Change the risk profile to "high-risk" if an existing customer becomes a sanctioned entity and continue monitoring further transactions.

Adopt automatic screening systems to detect designated persons and entities.

Conduct enhanced due diligence for prohibited entities on the sanctions list.

Freeze the funds or assets of designated persons and entities once this decision is approved by the board.

Companies operating in cash intense businesses not subject to licensing requirement

Companies operating hospitals and health-care services

Companies operating in cash intense businesses subject to licensing requirement

Companies producing pharmaceutical products and medical devices, companies active in the mining industry

Companies operating retail shops countrywide

Vishing

Pharming

SMSishing

Spear phishing

Accepts to participate in an off-cycle FATF mutual evaluation to be held within the next 12 months.

Must pay a fine to be removed from the list before the next FATF plenary.

Has committed to swiftly resolving the deficiencies identified in a FATF mutual evaluation.

Poses a high money laundering, terrorist financing and proliferation financing risk and must be restricted from accessing the international financial system.

The Bank Secrecy Act (BSA) extraterritorial reach requires that the Travel Rule be applied to all financial institutions globally, including all USD transactions

The Anti-Money Laundering Act of 2020 (AML Act) extraterritorial reach covers all USD transactions throughout the global economy

The Office of Foreign Assets Control's (OFAC's) economic and trade sanctions may pose extraterritorial risks for financial institutions and businesses outside of the US

Section 319(b) of the USA PATRIOT Act extraterritorial reach permits the seizure of funds from a correspondent bank account in the US that have been opened and maintained for the foreign bank

Receiving securities into an existing brokerage account following the death of a spouse

Allowing fixed income securities to mature

Using brokerage accounts like deposit accounts

Engaging in transactions involving nominees or third parties

Engagement of third-party art advisors as representatives at art auctions

High-quality single pieces of significant value sold on social media platforms

Use of art and antiquity experts to verify an item's authenticity

Paying fair market value or premium prices for valuable art, gems, or precious metals at auction

Use of art storage facilities located in tax-free zones

imposes economic sanctions on jurisdictions with lax AML controls to force them to strengthen their controls.

conducts on-site inspections of financial institutions in jurisdictions with lax AML controls to identify deficiencies and recommend improvements.

publishes annual reports ranking all member jurisdictions based on their self-assessment of AML controls.

conducts a peer review process whereby member countries assess the AML controls of other jurisdictions and provide recommendations for improvement.

Low thresholds for transactions

Frequent use of cash

Cross-border transactions

Weak KYC policies and procedures

The first line

The second line

Senior management

The third line

Accountants can prepare ledgers and spreadsheets, draft annual returns and make payments to government offices

Accountants can advise on the structuring of companies as well as ensure compliance with local tax regulations

Accountants are knowledgeable about financial management, including what to record over the course of the accounting year

Accountants are able to create and structure companies, falsify accounts and manipulate financial statements

It is against international laws on data protection to access information from foreign countries

Sovereignty of nations means that information cannot be accessed from foreign countries

Any information related to money laundering can be received from any organization at any time regardless of jurisdiction

Countries that are members of the Egmont Group can request assistance for information from each other

Statistical data regarding SARs filed during the reported period

All possible details of SARs filed during the reported period

Copies of all SARs filed during the reported period

Names of all customers subject to SARs filed during the reported period

Partial automation of data collection and analysis

Cost-effective access to a wide range of data

Real-time monitoring of selected transactions and data sources

Ability to conduct investigations with minimal human oversight

Enhanced ability to identity connections across various data sets

directly contact financial institutions in another country and share information pertinent to the investigation.

directly contact other FlUs in another country and share information pertinent to the investigation.

deputize its law enforcement investigators to assist in a material ongoing investigation in another country

assist law enforcement in another country with a material ongoing investigation.

Paying premium several years in advance and terminating early for a refund

Natural persons having more than one insurance policy

High-premium life insurances that provide high payouts

Regularly switching policies and accepting penalties

Beneficiary payouts to elderly people

to force developing nations to adopt liberal or substantive democracies.

to support governments and regimes in the peaceful resolution of conflict.

to punish governments for having weak financial crime controls.

to deter non-democratic and non-constitutional changes within countries.

to support the protection of human rights.

The board of directors should be responsible for overseeing the management of the bank's compliance risk but not involved in establishing a compliance policy that explains the processes by which compliance risks are to be identified and managed throughout the organization.

The board of directors should establish a compliance function and approve the bank's policies for identifying, assessing, monitoring, reporting, and advising on compliance risk.

The compliance function must have sufficient authority, stature, independence, and resources to be effective on its own and should not have access to the board of directors.

The compliance function should report directly to the CEO concerning the bank's compliance with applicable laws, rules, and standards and only update the board of directors on the bank's efforts in managing compliance risk when required.

Reputational risk

Operational risk

Sanctions risk

Compliance risk

Lending risk

An RAS defines the amount and type of risk an organization is willing to take to achieve its objectives and should be communicated clearly to all stakeholders with corresponding controls implemented

An RAS is a detailed plan for managing operational risks and does not cover strategic or financial risks

An RAS is a formal document meant for regulatory compliance that does not influence day-to-day risk management practices within the organization

An RAS is used to outline the risk tolerance limits to external stakeholders and does not need to be communicated within the organization