A SAR/STR on cash activity is filed for a company registered in the Marshall Islands operating a Mediterranean beach bar and hotel. The company has three nominee directors, one nominee shareholder, and another individual declared as both the beneficial owner and authorized signatory. Which information is key for law enforcement ' s physical surveillance of cash activity? (Select Two.)
Correct Answer: B, C
Explanation:
The identification details of the beneficial owner and authorized signatory are key for law enforcement’s physical surveillance of cash activity, as they would help identify the person who controls and operates the company and who is responsible for its financial transactions. The company’s operating address is also key, as it would help locate the premises where the cash activity takes place and observe any suspicious movements or behaviors. The identification details of the nominee shareholder and directors are not relevant, as they are not involved in the management or operation of the company. The company’s registered address is also not relevant, as it is likely to be a shell or mailbox address that does not reflect the actual location of the business. References: Advanced CAMS-FCI Study Guide, page 44-45; [FATF Guidance on Transparency and Beneficial Ownership], page 12-13.
Question 2
Which scenarios are common to money laundering through online marketplaces and trade-based money laundering? (Select Two.)
Correct Answer: A, C
Explanation:
Money laundering through online marketplaces and trade-based money laundering both involve the manipulation of the value or quantity of goods to disguise the illicit origin of funds. Over-valuation of the stated price of goods and no evidence of delivery of goods or shipping expenses are two common indicators of such schemes. The other options are not specific to these methods of money laundering. References: Advanced CAMS-FCI Study Guide, page 29-30.
Question 3
An investigator at a bank triggered a review in relation to potential misuse of legal persons and a complex network of corporate entities owned by customer A. For the investigator to provide a holistic view of the underlying risk, which action should be the initial focus of the investigation?
Correct Answer: D
Explanation:
The initial focus of the investigation should be to review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel, as this would help identify the beneficial owners, the source of funds, and the purpose of the business relationship. This would also help determine if the entities are shell companies or have any red flags that indicate potential misuse of legal persons. Using data analytics to extract and analyze the linkages between the different entities would be a subsequent step, not the initial one. Conducting a network link analysis on all customers of the bank would be too broad and time-consuming. Finding out whether customer A has relationships with other financial institutions would be relevant, but not the initial focus. References: [Advanced CAMS-FCI Study Guide], page 44-45; [FATF Guidance on Transparency and Beneficial Ownership] , page 12-13.
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