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

What kind of sanctions should countries implement for money laundering violations according to FATF Recommendation 17?

1. Only civil penalties

2. Effective criminal, civil, and administrative sanctions

3. No enforcement is necessary

4. Only criminal sanctions

The correct answer is: Effective criminal, civil, and administrative sanctions

FATF Recommendation 17 emphasizes the importance of implementing a comprehensive framework of sanctions to address money laundering violations. The recommendation states that countries should impose effective criminal, civil, and administrative sanctions to deter such activities and ensure accountability. This multifaceted approach is essential because different types of violations may be better addressed by specific forms of sanctions. Criminal sanctions are crucial in handling serious offenses and serve as a strong deterrent, reflecting the gravity of money laundering activities. Civil sanctions can further reinforce legal repercussions and serve as a mechanism to recover proceeds tied to illicit activities. Administrative sanctions enable quicker responses to violations, allowing regulatory bodies to take action without the need for lengthy criminal prosecution, which can be a more resource-intensive process. Incorporating all three forms of sanctions ensures that countries are equipped to address money laundering comprehensively, adapting to various types of offenses and situations, thereby enhancing the overall effectiveness of their anti-money laundering (AML) frameworks.