Free CAMS ACAMS Updates

When reviewing business operations of a Money Services Business (MSB), it is critical to identify behaviors that indicate potential money laundering activity. TheCAMS Study Guide – 6th Editionoutlines severalred flagscommonly associated with MSBs.

Option Ais correct:

A customer beinghesitant to provide beneficiary information, such as the name or address, is a red flag. It may indicate attempts to hide the true purpose or recipient of the funds and could suggeststructuring or layering activity.

Option Dis correct:

A customer usingmultiple accounts under different namesto conduct transactions is a strong red flag. This could indicate efforts toobscure ownership, avoid detection, or conductsuspicious structuringbehavior to stay below reporting thresholds.

Option Bis incorrect:

While large cash deposits from cash-intensive businesses may require further review, they are not inherently suspicious unlessinconsistent with the nature of the business or transaction volume.

Option Cis incorrect:

Currency exchanges under the reporting threshold, even from high-risk jurisdictions, are not in themselves red flags unless they show a pattern ofstructuringor are part oflarger suspicious behavior.

Option Eis incorrect:

Frequent small-dollar transfers to a native country may benormal remittance behaviorand only become suspicious if tied to additional indicators such asstructuring or third-party involvement.

C: “The system must be adequate and proportionate to the bank’s size, activities, complexity, and risk profile. A one-size-fits-all solution is not appropriate.”

D: “Effective monitoring systems should support the detection of unusual trends and business relationships, facilitating meaningful analysis and alerts.”(CAMS 6th Edition, Transaction Monitoring System Requirements)

Incorrect:

A: Vendor internal controls are important, but not a top selection criterion for AML system effectiveness.

B: Permissions should be appropriate for the bank’s structure, not just compared to other banks.

Forming complex trust structures and acting as a nominee director, providing tax advice to clients moving assets across borders, and assisting offshore entities from opaque jurisdictions in acquiring property are all higher-risk services. These activities may facilitate concealment of beneficial ownership, asset flight, or the integration of illicit funds into legitimate systems.