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

Which areas are associated with 'Contractual Transactions' in Emerging Money Laundering Risks?

1. Real Estate, Insurance Transactions, Trade-Based Money Laundering

2. Online Banking, Cryptocurrency Trading, and E-commerce

3. Stock Trading, Real Estate Investment, and Foreign Aid

4. Insurance Fraud, Tax Evasion, and Gift Transactions

The correct answer is: Real Estate, Insurance Transactions, Trade-Based Money Laundering

The correct choice highlights the areas that are closely tied to contractual transactions, which play a significant role in potential money laundering activities. In the realm of real estate, significant sums of money can change hands based on contracts, making it a prime target for money laundering. The property can be purchased with illicit funds, and through various schemes, the origin of that money can be obscured. Similarly, insurance transactions involve contracts that can be manipulated or misrepresented to launder money. Trade-based money laundering refers to the use of trade contracts and invoices to disguise the movement of illegal funds, allowing criminals to exploit the complexities of international trade to legitimize illicit proceeds. Each of these areas relies on formal agreements or contracts, which create opportunities for laundering money through purported legitimate businesses. Therefore, the inclusion of real estate, insurance transactions, and trade-based money laundering as areas associated with contractual transactions aligns well with the potential risks for emerging money laundering activities.