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

The objective of SR Three under FATF's recommendations is to:

1. Enhance customer identification measures

2. Freeze and confiscate terrorist assets

3. Promote transparency in financial markets

4. Encourage private sector cooperation

The correct answer is: Freeze and confiscate terrorist assets

The objective of SR (Special Recommendation) Three under the FATF (Financial Action Task Force) recommendations specifically focuses on the measures related to the freezing and confiscation of terrorist assets. This recommendation emphasizes the need for countries to implement robust mechanisms that enable law enforcement and relevant authorities to efficiently identify and seize assets linked to terrorism. By ensuring that assets used or intended for use in the financing of terrorism can be promptly frozen, jurisdictions contribute to disrupting terrorist activities and limiting the resources available for such acts. This focus reflects the broader aim of the FATF to safeguard the international financial system from being misused for terrorist financing, highlighting the importance of international cooperation and legal frameworks in achieving this goal. The other options, while important in their own right, do not align with the specific focus of SR Three, which is narrowly tailored to address the challenges associated with terrorist financing and asset recovery. Enhancing customer identification measures, promoting market transparency, and encouraging cooperation in the private sector are broader themes that may relate to various aspects of financial crime prevention but do not capture the essence of what SR Three aims to achieve.