ACAMS Advanced-CAMS-Audit - Advanced CAMS-Audit Certification Exam

ï‚·A customer identification program (CIP) mandates that financial institutions obtain specific information from customers during account opening. This includes verifying identity through reliable documents, understanding the purpose of the account, and assessing associated risks.

Advanced CAMS-Audit and FATF recommendations highlight the necessity of robust account opening procedures as the foundation for AML compliance​​.

M1.1 - Risk Identification and AssessmentTrade finance introduces new types of risks such as exposure to cross-bordertransactions, multiple parties, and complex financial instruments. These elements necessitate a reassessment of existing risk frameworks to identify new vulnerabilities, including trade-based money laundering (TBML). As detailed in the CAMS-Audit guidance, financial institutions must periodically update their risk assessments to reflect changes in products and services​​​.

M2.1 - Enhanced Due Diligence (EDD) on High-Risk CustomersTrade finance clients often involve politically exposed persons (PEPs), entities in high-risk jurisdictions, or complex supply chains. According to FATF Recommendation 10 and CAMS standards, banks must enhance customer due diligence measures, including obtaining additional information on the customer's source of funds, beneficial ownership, and the nature of the business​​.

M4.2 - Transaction Monitoring SystemsThe complexity of trade finance transactions requires robust monitoring systems capable of identifying unusual patterns indicative of money laundering or terrorist financing. These systems must be calibrated to flag discrepancies in trade documentation, over- or under-invoicing, and deviations from expected trade flows, as emphasized in the FATF Recommendations and CAMS-Audit references​​.

References from Advanced CAMS-Audit Documents:

AML/CFT-document references specify the need for updated risk assessments and transaction monitoring systems aligned with international AML standards for new services​​​.

FATF Recommendations provide a framework for enhanced due diligence and risk-based approaches for trade finance​​.

Testing Internal Controls:

C. Gap Analysis: Ensures policies are compliant with local regulations and address identified risks​​.

D. Sample Testing: Verifies that processes are effectively implemented in practice for both new and existing customers​​.

ï‚·Review Frequency:

The frequency of MSB reviews depends on regulatory requirements, which vary by jurisdiction but are guided by FATF Recommendations that mandate risk-based supervision for money services businesses​​.

ï‚·Risk-Based Approach:

Regulators often require more frequent reviews for high-risk MSBs to ensure compliance with AML/CFT standards​​.

ï‚·Distinguishing General and Specific Licenses:

Ageneral licensepermits predefined categories of transactions without individual approval.

Aspecific licenseis issued for unique transactions based on a written application evaluated on a case-by-case basis.

ï‚·OFAC Guidance:

Auditors should verify that transactions routed through sanctioned countries align with the licenses and confirm appropriate documentation for compliance​​.

C:Designating the account as a PEP-account triggers additional monitoring and controls as PEPs inherently pose higher risks​​.

D:Enhanced due diligence (EDD) and ongoing monitoring are essential for PEPs to track their financial activities closely and address any anomalies​​.

E:Documenting the details of the asset-holding arrangement provides clarity on the customer's profile and any associated risks​​.

AML Policy Expectations:

Staff training is a fundamental component of an effective AML program. FATF Recommendations and Basel Committee guidelines require AML policies to address staff training to ensure compliance with AML/CFT laws​