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

What special attention should financial institutions give under FATF recommendations?

1. To clients with high credit scores

2. To relationships from countries disregarding the recommendations

3. To transactions involving small amounts

4. To individuals from developed countries

The correct answer is: To relationships from countries disregarding the recommendations

Financial institutions should focus special attention on relationships from countries that disregard the recommendations outlined by the Financial Action Task Force (FATF). The FATF is an international body that sets standards and promotes measures to combat money laundering and terrorist financing. Countries that do not comply with these recommendations often present higher risks for financial institutions, as they may lack adequate regulatory frameworks and controls to prevent financial crimes. By paying particular attention to these relationships, financial institutions can better assess the risk levels associated with transactions and clients coming from these jurisdictions. This vigilance is essential for protecting the integrity of the financial system and ensuring compliance with international standards. It allows institutions to implement enhanced due diligence measures, which can prevent exposure to potential money laundering activities and help mitigate the risks associated with doing business in high-risk areas. In contrast, the other options do not align with the key areas of focus recommended under FATF guidelines. High credit scores or transactions involving small amounts are not necessarily indicative of risk related to money laundering or terrorist financing. Similarly, individuals from developed countries are not automatically considered high risk as they typically come from jurisdictions with established legal and regulatory frameworks. Thus, the emphasis on understanding and monitoring relationships from countries that do not adhere to FATF recommendations is crucial for maintaining compliance and reducing financial