Pass CAMS Exam Guide

Proliferation financingrefers to the act of providing financial services or funds for thedevelopment, acquisition, or delivery of nuclear, chemical, or biological weapons. The core threat involvesnetworks of individuals and entities using the financial systemto obtain sensitive technologies, materials, or knowledge forweapons of mass destruction (WMDs).

TheFinancial Action Task Force (FATF)identifies this as a major international security threat and requires institutions to assess and mitigate such risks.

Understanding the source and origin of assets (C):According to the CAMS 6th Edition (Chapter: Customer Due Diligence and Enhanced Due Diligence) and the EU 4th & 5th AML Directives, regulated entities are required to take adequate measures to understand the source of funds and the origin of assets of their customers, especially when there are higher risk factors such as large transactions or PEPs.“Firms must identify the source and origin of assets to ensure they are not the proceeds of crime or corruption, particularly for higher-risk customers.”(CAMS 6th Edition, CDD/EDD Requirements; EU Directive 2015/849, Article 20)

Performing negative news checks of prospective customers (D):Adverse media screening is an essential part of the onboarding process for identifying potential risks related to money laundering, terrorist financing, or reputational harm.“Negative news or adverse media checks form a vital component of the due diligence process, helping organizations detect links to criminal or suspicious activities.”(CAMS 6th Edition, CDD/EDD Requirements)

Incorrect Options:

A: Onboarding interviews may be part of EDD, but are not a standard or required AML control.

B: PEPs are not to be automatically rejected; instead, enhanced due diligence should be applied.

E: Producing financial stability reports is not an AML control, but may be relevant for credit or investment assessment.

One of the core components of a strong AFC (Anti-Financial Crimes) compliance program is establishingclear roles, responsibilities, and lines of accountability, especially forescalating and addressing AFC risks and compliance issues. This governance clarity ensures effective implementation, transparency in decision-making, and timely resolution of compliance concerns.

While external audits (option A) and internal controls (option B) are important,defining governance structure and escalation responsibilities (option D)is a foundational element. Additionally, the board of directors (option C) provides oversight—not day-to-day compliance monitoring.