CAMS Question #152: Real Exam Question with Answer & Explanation

Question

Options

• AEnsure the designated entity's confidential information is not shared with other entities.
• BObtain additional information about customers permitted to use this account.
• CVerify that the EU bank serves the designated entity.
• DPerform enhanced due diligence on the EU bank.

Explanation

Under USA PATRIOT Act Section 311, the U.S. government can impose special measures against a foreign jurisdiction, institution, or transaction that is of primary money laundering concern. These measures can range from requiring additional recordkeeping and reporting to prohibiting or restricting the opening or maintaining of correspondent or payable-through accounts for the designated entity. A payable-through account is a type of correspondent account that allows customers of a foreign bank to access the U.S. financial system by writing checks or making wire transfers from the foreign bank's account at a U.S. bank. In this case, the U.S. government has enacted special measures against a designated entity that has a payable- through account with an EU bank, which in turn has a correspondent banking relationship with a U.S. bank. One of the possible actions that the U.S. bank might be required to take regarding the EU bank's services for the designated entity is to obtain additional information about customers permitted to use this account. This is to ensure that the U.S. bank can identify and monitor the transactions and activities of the designated entity and its customers, and to prevent any money laundering or terrorist financing risks.

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