CAMS Question #910: Real Exam Question with Answer & Explanation

The correct answer is B. The prevalence of international wire transfers D. The cash-intensive nature of the services offered. Money Services Businesses (MSBs)are commonly recognized by regulatory and supervisory authorities as havinghigher inherent AML/CFT risk, particularly due to certain business characteristics. Option B ?The prevalence of international wire transfers: MSBs often facilitatecross-bord

Question

Which of the following risk factors are considered by many supervisory authorities as representing a higher inherent risk associated with MSBs? (Select Two.)

Options

AThe use of new technologies to facilitate the onboarding of customers remotely
BThe prevalence of international wire transfers
CDomestic business with small and medium-sized enterprises
DThe cash-intensive nature of the services offered
EThe use of digital channels and traceable payment methods

Explanation

Money Services Businesses (MSBs)are commonly recognized by regulatory and supervisory authorities as havinghigher inherent AML/CFT risk, particularly due to certain business characteristics. Option B ?The prevalence of international wire transfers: MSBs often facilitatecross-border transactions, which present a higher money laundering and terrorist financing risk due to challenges in verifying customer identity, the origin of funds, and the end destination--especially when dealing with higher-risk jurisdictions. Option D ?The cash-intensive nature of the services offered: Many MSBs deal primarily incash, which increases the risk ofanonymous transactionsandfunds layering, making it harder to trace illicit activity. Cash is the most vulnerable medium for placement of illicit funds into the financial system.

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