The compliance team should request further clarification to assess the AML risk appropriately. This includes understanding which cryptoassets were sold and whether the exchange used applies adequate due diligence. These details help determine the legitimacy of the source of funds and ensure compliance with AML requirements.

Reference data screening is a core element of AML/CFT programs and typically covers:

Customers (B):“All customers must be screened against sanctions, PEP, and adverse media lists as part of onboarding and ongoing due diligence.”(CAMS 6th Edition, Due Diligence and Screening)

Third-party service providers (C):“Screening should extend to relevant third parties, such as agents and service providers, to prevent indirect exposure to sanctioned entities.”(CAMS 6th Edition, Third-Party Screening; FATF Recommendations)

Incorrect Options:

A: Types of payment messages are not screened; the entities/individuals are.

D: Customer spouses may be screened in some KYC processes but are not a standard dataset for reference screening.

A: The main objective of anti-bribery and corruption regulations is to prohibit bribes to government officials or employees of state-owned enterprises for the purpose of obtaining or retaining business or securing improper advantages.

“Anti-bribery and corruption regulations, such as the FCPA and UK Bribery Act, prohibit offering anything of value to public officials to gain a business advantage.”(CAMS 6th Edition, Anti-Bribery and Corruption)

Tax evasion is the deliberate and illegal act of not paying taxes that are legally owed. It is a criminal offense that can have serious consequences, including penalties, fines, and imprisonment.

Perpetual KYC (pKYC) involves real-time monitoring of data triggers, such as static changes or behavioral anomalies, and prioritization based on client-specific data rather than fixed refresh schedules. This dynamic approach enhances risk management by responding more quickly to changes in client risk profiles.

Trust and company service providers (TCSPs) are recognized by FATF as higher-risk gatekeepers due to the nature of services they provide, which can be misused to facilitate money laundering.

The use of nominee directors can obscure beneficial ownership, allowing criminals to hide their involvement behind third parties. This lack of transparency is a significant AML risk.

The sale of ready-made or shelf companies , particularly through offshore intermediaries, enables rapid creation of legal entities with no operating history, which are frequently used in layering schemes.

Additionally, minimal face-to-face interaction —especially in offshore service models—reduces the ability to verify customer identity and intent, increasing impersonation and misuse risks.

TCSPs do not market themselves to criminals and are subject to AML obligations in most jurisdictions, making those options incorrect.

The CAMS 6th Edition clearly identifies a risk-based approach as the cornerstone of effective AML/CFT programs. Risk assessments should consider various risk factors that directly influence exposure to ML/TF.

Product risk (A): Certain products or services may present higher ML/TF risks, such as private banking, correspondent banking, or cash-intensive products.“Products and services offered, and their inherent risk levels, must be assessed as part of the risk-based approach.”(CAMS 6th Edition, AML Compliance Program, Risk Assessment)

Geographic risk (C): Jurisdictions where the customer operates or where transactions are conducted may present higher or lower risks due to factors such as weak AML regulations or high corruption.“Geographic risk considers where a customer is located and/or where transactions occur, referencing countries with increased risk, such as those identified by the FATF.”(CAMS 6th Edition, Risk Assessment Factors)

Customer risk (D): The type of customer, such as PEPs, non-residents, or companies with complex structures, may present higher ML/TF risks.“Customer risk assessment is based on the customer’s profile, activity, and ownership structure, and is a critical component in risk-based monitoring.”(CAMS 6th Edition, CDD/EDD)

Incorrect Options:

B (Credit risk): Related to creditworthiness, not ML/TF.

E (Liquidity risk): Refers to a firm’s ability to meet financial obligations; not an AML risk factor.