CAMS Key AML Laws and Regulations (BSA, USA PATRIOT Act, EU AMLDs, UK POCA) — Questions and Answers
Question 1: Under the U.S. Bank Secrecy Act, when must a financial institution file a Currency Transaction Report (CTR)?
- For any wire transfer over $3,000
- For cash transactions over $10,000 by or on behalf of one person in one business day (Correct answer)
- Only when the institution suspects the cash came from a crime
- For any cash transaction over $5,000
Correct answer: For cash transactions over $10,000 by or on behalf of one person in one business day
CTRs are required for cash transactions over $10,000, including multiple transactions aggregated by or for one person in a single business day. They are filed within 15 days whether or not the activity is suspicious. Suspicion triggers a SAR, not a CTR.
Question 2: What power does Section 311 of the USA PATRIOT Act give the U.S. Treasury?
- To designate a foreign jurisdiction, institution or transaction type as a 'primary money laundering concern' and impose special measures (Correct answer)
- To require enhanced due diligence on all domestic PEPs
- To ban all correspondent accounts with foreign banks
- To fine individual employees for failing to complete AML training
Correct answer: To designate a foreign jurisdiction, institution or transaction type as a 'primary money laundering concern' and impose special measures
Section 311 lets Treasury (through FinCEN) name a foreign jurisdiction, institution, class of transactions or type of account as a primary money laundering concern. It can then impose special measures ranging from extra recordkeeping to banning correspondent accounts.
Question 3: What does Section 313 of the USA PATRIOT Act prohibit U.S. financial institutions from doing?
- Opening accounts for non-resident aliens
- Taking cash deposits over $10,000
- Keeping correspondent accounts for foreign shell banks (Correct answer)
- Processing wire transfers to sanctioned countries
Correct answer: Keeping correspondent accounts for foreign shell banks
Section 313 bans U.S. institutions from keeping correspondent accounts for foreign shell banks, meaning banks with no physical presence in any country, and requires reasonable steps to ensure correspondent accounts aren't used indirectly to serve shell banks.
Question 4: Which U.S. law first made money laundering a federal crime (18 U.S.C. §§ 1956 and 1957)?
- Bank Secrecy Act of 1970
- Money Laundering Control Act of 1986 (Correct answer)
- Annunzio-Wylie Anti-Money Laundering Act of 1992
- Anti-Money Laundering Act of 2020
Correct answer: Money Laundering Control Act of 1986
The Money Laundering Control Act of 1986 created the federal money laundering offenses. Section 1957 also covers monetary transactions over $10,000 in criminally derived property. The BSA of 1970 set up reporting and recordkeeping duties but did not make laundering itself a crime.
Question 5: Under the EU AML legislative package adopted in 2024, which new body was created to directly supervise selected high-risk financial institutions and coordinate national supervisors?
- European Banking Authority (EBA)
- Europol Financial Intelligence Centre
- European Central Bank AML Unit
- Anti-Money Laundering Authority (AMLA) (Correct answer)
Correct answer: Anti-Money Laundering Authority (AMLA)
The 2024 EU AML package created the Anti-Money Laundering Authority (AMLA), based in Frankfurt. It will directly supervise certain high-risk cross-border institutions and coordinate national AML supervisors and FIUs. Before this, many AML coordination tasks sat with the EBA.
Question 6: Under the UK Proceeds of Crime Act 2002, what is it called when someone reveals that a suspicious activity report has been made in a way likely to prejudice an investigation?
- Tipping off (Correct answer)
- Wilful blindness
- Structuring
- Failure to disclose
Correct answer: Tipping off
POCA makes it an offense to disclose that a SAR has been made, or that an investigation is underway or planned, where that disclosure is likely to prejudice an investigation. This is the 'tipping off' offense. Failure to disclose is a separate offense for not reporting known or suspected laundering.
