A precious metals dealer opens a new account with a bank. Which requires a referral to AML investigations for further review?

Question

Options

• AInternational incoming payments from foreign companies in which the precious metals dealer has
• BPayments on the account reference unknown companies from high-risk jurisdictions
• CInternational outgoing wires to diamond dealers that are part of the diamond pipeline
• DMultiple daily point of sale transactions from third parties that appear to be individuals

• A
  17% (5)
• B
  73% (22)
• C
  3% (1)
• D
  7% (2)

Explanation

According to the ACAMS Study Guide for the CAMS Certification Exam (6th edition), page 211, dealers in precious metals and stones (DPMS) are vulnerable to money laundering and terrorist financing risks due to the high value, portability, and fungibility of their products. Therefore, DPMS should apply a risk-based approach to their AML/CFT compliance program and monitor their customers and transactions for any red flags or suspicious activities. One of the red flags for DPMS is receiving payments from or sending payments to unknown or unverified third parties, especially if they are located in high-risk jurisdictions that have weak AML/CFT controls, are subject to sanctions, or are known to be sources or destinations of illicit funds. Such payments may indicate that the DPMS is being used as a conduit or a front for money laundering, terrorist financing, tax evasion, or other criminal activities. Therefore, if a precious metals dealer opens a new account with a bank and receives or makes payments that reference unknown companies from high-risk jurisdictions, the bank should refer the account to AML investigations for further review and verification of the source and purpose of the funds, the identity and legitimacy of the third parties, and the nature and rationale of the business relationship.

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