CAMS Question #548: Real Exam Question with Answer & Explanation

Question

Options

• AThere is no need to file a suspicious transaction report, as this activity is covered by attor-ney-
• BFreeze the client's assets so that all records can be turned over to the competent authori-ties.
• CReport the activity as suspicious to the competent authority because the lawyer is covered by
• DConsult with the competent authority to receive advice on how to handle the transaction.

Explanation

The correct answer is C because the European Union Money Laundering Directives require lawyers and other independent legal professionals to report suspicious transactions to the competent authority when they are involved in certain activities on behalf of their clients, such as creating or managing companies, trusts, or other legal arrangements. The directives also provide that the obligation to report overrides any professional secrecy or confidentiality rules, except when the lawyer is ascertaining the legal position of the client or representing the client in legal proceedings or in connection with such proceedings. Therefore, the lawyer in this scenario should report the activity as suspicious to the competent authority, as creating a financial holding company for the client falls within the scope of the reporting obligation and does not qualify for the

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