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

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What does FATF Recommendation 4 advise concerning secrecy laws?

They should inhibit the implementation of FATF recommendations
They should support the enforcement of anti-money laundering measures
They should not hinder the application of FATF recommendations
They should be completely repealed

The correct answer is: They should not hinder the application of FATF recommendations

FATF Recommendation 4 advises that secrecy laws should not hinder the application of FATF recommendations. This means that while some laws might be designed to protect personal or corporate privacy, they should not obstruct the efforts to effectively implement anti-money laundering measures. The purpose behind this guidance is to ensure that financial institutions and other relevant organizations can provide necessary information to authorities for the prevention and detection of money laundering and related financial crimes. If secrecy laws were to inhibit such sharing of information, it would undermine the effectiveness of anti-money laundering frameworks, making it difficult for jurisdictions to comply with global standards. By emphasizing that secrecy laws should not pose a barrier, FATF underscores the importance of transparency and cooperation in the fight against money laundering. This principle encourages a balance between protecting individual privacy and enabling law enforcement and financial institutions to act effectively against illicit activities.