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

What is the primary function of a Financial Intelligence Unit (FIU)?

1. To regulate the banking sector

2. To analyze financial transactions

3. To provide financial education

4. To manage government financial assets

The correct answer is: To analyze financial transactions

The primary function of a Financial Intelligence Unit (FIU) is to analyze financial transactions. FIUs are specialized government agencies responsible for receiving, processing, and analyzing reports of suspicious activities related to money laundering, terrorist financing, and other financial crimes. By scrutinizing transactions, FIUs can identify patterns or anomalies that may indicate illicit activities, providing critical intelligence for law enforcement and regulatory agencies. This analytical work is essential because it helps in understanding the flow of illicit funds and aids in the detection and prevention of financial crimes. Through their analyses, FIUs can generate valuable reports that guide investigations and support the broader objectives of national and international financial integrity. In contrast, while regulating the banking sector, providing financial education, and managing government financial assets are all important financial functions, they fall outside the primary scope of a FIU's activities. Regulatory roles are typically carried out by central banks or specific financial regulatory authorities, financial education initiatives often involve various institutions and non-profits, and managing government assets is generally within the purview of treasury departments or finance ministries.