Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

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Prepare for the Certified Anti-Money Laundering Specialist Certification (CAMS) exam. Study with multiple choice questions, each with hints and explanations. Boost your chances of success!

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According to FATF Recommendation 9, what is the financial institution's responsibility when using intermediaries for CDD elements?

They are not responsible at all.
Ultimate responsibility remains with the financial institution.
Responsibility is shared equally with the intermediary.
Only the intermediary is responsible.

The correct answer is: Ultimate responsibility remains with the financial institution.

FATF Recommendation 9 emphasizes that while financial institutions can rely on the due diligence performed by intermediaries in conducting Customer Due Diligence (CDD), the ultimate responsibility for ensuring that proper CDD measures are in place remains with the financial institution itself. This means that even if a financial institution utilizes an intermediary to gather and verify customer information, it cannot entirely delegate its obligations concerning CDD. The institution must have a thorough understanding of the risk associated with the intermediary and ensure that the intermediary is following adequate CDD processes that comply with regulatory expectations. If the intermediary fails to conduct proper due diligence, the financial institution is still liable for any repercussions that may arise. This principle aligns with the broader framework of risk management in anti-money laundering efforts, where institutions are encouraged to take proactive measures to ensure compliance, rather than relying solely on third parties.