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

What is the primary objective of FATF Recommendation 1?

1. To promote international trade

2. To advocate for transparency in financial markets

3. To criminalize money laundering for serious offenses

4. To reduce tax fraud on a global scale

The correct answer is: To criminalize money laundering for serious offenses

The primary objective of FATF Recommendation 1 is to criminalize money laundering for serious offenses. This recommendation establishes the foundational principle that countries should have laws that specifically criminalize the act of money laundering, particularly as it pertains to proceeds from serious crimes. The goal is to create a robust legal framework that enables authorities to effectively investigate and prosecute money laundering activities. This focus on serious offenses reflects an understanding that money laundering is often linked to serious crimes such as drug trafficking, corruption, and organized crime, and that addressing these issues is essential for the integrity of the financial system and law enforcement in general. By prioritizing the criminalization of money laundering, the FATF aims to disrupt the financial flows associated with these offenses, thereby enhancing overall global financial stability and security. The other options, while they may relate to broader financial regulation or crime prevention initiatives, do not encapsulate the specific intent of FATF Recommendation 1, which is primarily concerned with establishing a clear legal framework for the prevention and prosecution of money laundering activities linked to serious crimes.