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

What powers should competent authorities possess according to FATF Recommendation 28?

1. Authority to regulate financial advisors

2. Power of subpoena, search, and seizure

3. Ability to approve financial transactions

4. Authority to define money laundering

The correct answer is: Power of subpoena, search, and seizure

FATF Recommendation 28 emphasizes the need for competent authorities to have the necessary powers to effectively combat money laundering and terrorist financing. The power of subpoena, search, and seizure is crucial for enabling these authorities to gather evidence, investigate suspicious activities, and enforce compliance with anti-money laundering regulations. Such powers are essential for conducting thorough examinations and facilitating the prosecution of individuals or entities suspected of illicit financial activities. This recommendation underscores the importance of having robust legal tools at the disposal of competent authorities to prevent and respond to financial crimes effectively. The ability to compel the production of documents and information, conduct timely investigations, and take necessary actions against financial wrongdoing forms the foundation of a strong deterrent against money laundering. The other options, while related to financial oversight, do not specifically align with the core powers required for the effective implementation of anti-money laundering measures as outlined by FATF.