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

Which measure is required to detect physical cross-border transportation of currency, according to international recommendations?

1. Implement a transaction monitoring system

2. Have a declaration system in place

3. Conduct regular audits for cash handling

4. Increase staff training on currency handling

The correct answer is: Have a declaration system in place

The requirement to have a declaration system in place is rooted in international recommendations aimed at combating money laundering and the financing of terrorism. Such a system is critical because it mandates individuals or entities that are transporting large amounts of currency across borders to declare the amount they are carrying to relevant authorities. This transparency serves multiple purposes: it helps to detect potential illicit activities, facilitates law enforcement investigations, and allows for the tracking of the movement of large sums of cash that could be related to money laundering or other financial crimes. By requiring declarations, authorities can gather data on cross-border currency movements, identify suspicious patterns or trends, and enhance overall regulatory oversight. This measure aligns with international standards, such as those put forth by the Financial Action Task Force (FATF), which emphasizes the need for countries to implement effective controls that can thwart the illegal movement of cash across borders. While transaction monitoring systems and audits are important for ongoing financial oversight, and staff training can enhance employees’ ability to recognize and report suspicious activities, they do not specifically target the direct issue of physical currency transportation across international borders. Therefore, the implementation of a declaration system is the crucial step that aligns with the international objectives for monitoring and regulating the physical transfer of currency.