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

What challenge do money launderers face when trying to use 'Bureau de Change' establishments?

1. Regulations that prevent all currency exchanges

2. Stringent Know Your Customer (KYC) procedures

3. Availability of online trading platforms

4. Reputation management and public scrutiny

The correct answer is: Stringent Know Your Customer (KYC) procedures

The choice of stringent Know Your Customer (KYC) procedures accurately identifies a significant challenge that money launderers face when using Bureau de Change establishments. These businesses are typically required to implement robust KYC measures to verify the identity of their customers. This is essential to prevent illicit activities, including money laundering and terrorist financing, and involves collecting various forms of identification and understanding the nature of their clients' transactions. KYC procedures are designed to ensure that financial institutions, including currency exchange services, have a clear understanding of who their customers are, thereby enhancing transparency in financial transactions. For money launderers, who typically seek to obscure their identities and the origins of their funds, these stringent requirements can be a substantial barrier. They may struggle to provide legitimate documentation that meets the standards required by Bureau de Change businesses, putting them at greater risk of being detected and reported by these establishments. In contrast, while the other options present challenges that may exist in specific contexts, they do not directly address the operational hurdles posed to money launderers by KYC. For instance, regulations that prevent all currency exchanges are not the norm, as currency exchange is a legal activity, and the proliferation of online trading platforms may even offer alternative avenues for laundering money. Reputation management and