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

FATF Recommendation 11 emphasizes the importance of examining which type of transactions?

1. Routine daily transactions

2. Large transactions with apparent economic purposes

3. Complex, unusual large transactions

4. Transactions under a certain monetary threshold

The correct answer is: Complex, unusual large transactions

FATF Recommendation 11 highlights the necessity of thoroughly examining complex and unusual large transactions. This recommendation stems from a recognition that such transactions often present higher risks for money laundering and terrorist financing. These transactions can be indicative of attempts to obscure the source of illicit funds or to navigate around regulatory controls intentionally. Complex transactions may involve layers of financial movements, such as transfers through multiple accounts or jurisdictions, which make them harder to trace and assess. Unusual transactions, especially those that deviate from a customer’s typical patterns, can signal potentially suspicious activity. By focusing on these aspects, financial institutions can better identify and report illicit activity, thereby strengthening their overall anti-money laundering (AML) and counter-terrorist financing (CTF) efforts. Understanding the specific risks associated with complex and unusual large transactions enables institutions to enhance their due diligence processes. This may involve additional scrutiny of the parties involved, the purpose of the transaction, and the source of funds, ultimately contributing to a more robust financial system.