The Office of Foreign Assets Control (OFAC) is responsible for:
Correct Answer: B
The Office of Foreign Assets Control (OFAC), part of the U.S. Department of the Treasury, is responsible for theadministration and enforcement of economic and trade sanctions. These sanctions are based on U.S. foreign policy and national security objectives and target: Foreign countries and regimes Terrorist organizations Narcotics traffickers Individuals and entities engaged in activities related to the proliferation of weapons of mass destruction OFAC acts under various authorities, including national emergency powers granted by the President and specific legislation. One of its primary tools is theSpecially Designated Nationals(SDN) List, which identifies individuals and entities whose assets are blocked and with whom U.S. persons are generally prohibited from dealing. It is important to note that OFAC is not responsible for designating jurisdictions as primary money laundering concerns (a task handled by FinCEN under Section 311 of the USA PATRIOT Act), nor does it manage trade agreements. Reference: ACAMS CAMS Study Guide - 6th Edition, Chapter: U.S. Regulatory Framework - Section: Office of Foreign Assets Control (OFAC)
Question 12
Which of the following risk factors are considered by many supervisory authorities as representing a higher inherent risk associated with MSBs? (Select Two.)
Correct Answer: B,D
Money Services Businesses (MSBs)are commonly recognized by regulatory and supervisory authorities as havinghigher inherent AML/CFT risk, particularly due to certain business characteristics. Option B - The prevalence of international wire transfers: MSBs often facilitatecross-border transactions, which present a higher money laundering and terrorist financing risk due to challenges in verifying customer identity, the origin of funds, and the end destination- especially when dealing with higher-risk jurisdictions. Option D - The cash-intensive nature of the services offered: Many MSBs deal primarily incash, which increases the risk ofanonymous transactionsandfunds layering, making it harder to trace illicit activity. Cash is the most vulnerable medium for placement of illicit funds into the financial system. Option AandOption E, while involving modern technologies,can actually reduce riskwhen implemented with proper controls (e.g., secure digital onboarding and traceable payments enhance auditability). Option Cdoes not in itself signal high AML risk unless combined with other red flags. Reference: ACAMS CAMS Study Guide - 6th Edition, Chapter:Industry-Specific Risks- Section:Money Services Businesses (MSBs) and Their Risk Characteristics
Question 13
In order to prevent financial crime risk, the implemented policies, controls, and procedures must:
Correct Answer: B
Policies, controls, and procedures must be proportionate to the size and nature of the firm, approved by senior management, and regularly reviewed to ensure they remain effective in preventing and mitigating financial crime risk while aligning with regulatory expectations.
Question 14
A bank received a subpoena regarding one of its clients. The financial intelligence unit of the bank should review the subpoena and:
Correct Answer: B
Question 15
According to the Financial Action Task Force (FATF) methodology, which situations would require a financial institution (FI) to consider filing a suspicious activity report?
