CHAPTER 2 : INTERNATIONAL AML/CFT STANDARDS

Welcome to all of you to my next web series of simplifying CAMS Study Guide. I hope those who are preparing for the CAMS exam or who are wondering about the CAMS exam will find this useful. If you have landed to this page, directly then you may want to go to our previous articles regarding:

  1. Preparing for CAMS Exam
  2. Overview of Chapter 1 of the CAMS Study Guide

The chapter 2 is straightforward, no tricky question is going to ask you from this chapter. But here is the catch, you need to learn by heart majority of the components here. Therefore, you need to understand the topic as well as keep it locked in your memory. Our golden advice is; rather than cramming the content, we suggest on repetition. The major advantage of this is with each repetition, you will become more familiarized with the topic and you will start remembering the content automatically without much effort. Further, in this article, we will share you tips and trick that you can use to improve your recollection.

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Lets Dive In:

  1. Financial Action Task Force(FATF)

Here you are going to learn about different concepts regarding FATF like what are its objectives, scope, recommendations, evaluation criteria to become its member, what are non-cooperative countries and so on. This portion covers a high percentage in this chapter so you guessed it right, it is very important.

POINTS TO REMEMBER:

Now, it is good time to download Updated 2012 FATF Recommendations. Some of you already know that previously there were 40 plus 9 recommendations, 40 were for money laundering and 9 were for terrorism financing. However, now these have been clubbed together into 40 Recommendations. If you ask, why I should read FATF recommendations, then the answer is most concept in CAMS Study Guide is derived from FATF recommendation, so if you read now, it will be simpler later to understand these ideas. You may be asked about specifics of evaluation criteria or highlights of the 2012 recommendation which you need to memorize.

2. BASEL Committee

This section talks about the concept of BASEL committee and guidelines it had introduced regarding anti-money laundering at various timelines that has to be followed by different financial institutions.

POINTS TO REMEMBER:

This section is quite simple; you need to understand what provisions it had introduced at various years in its different guidelines paper. For e.g. in 1988, BASEL issued a statement that require Financial Institutions to perform customer identification procedures, staff training, record-keeping. In 2001, BASEL introduced a paper that introduced four key elements of Know Your Customer programs. Then list goes on. Our suggestion is you create a timeline chart detailing out major provisions so that it will easy for you to understand and memorize.

3. European Union(EU) Directives:

You will learn about four different EU directives and major provisions contained in these directives.

POINTS TO REMEMBER:

We advise you to create comparative chart when you list down all 4 EU directives with their major provisions. In this way, you can understand what major change was brought by the succeeding directive because in exam you will be asked how was this directive different from other directive, what major changes it brought.

 

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4. FATF-STYLE Regional Bodies and Associate Members

This section talks about 8 FATF-Style regional and associate members of FATF, what are they and their scope and objectives.

POINTS TO REMEMBER:

Focus on what was the reason that lead to the establishment of these organizations. For e.g., Carribean Financial Action Task Force was established to combat drug trafficking in South America Andean Region. Also, emphasize on what area they cover, it is worthless to remember each and every state but you can remember area, like Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) covers countries in West Africa while Asia/Pacific Group On Money Laundering(APG) covers the countries in ASIA/PACIFIC Region.

5. Egmont Group

You will read about this more later in other chapters. But, for now, just understand this Egmont Group is formed as a collection of  159 Financial Intelligent Units (FIU) of all around the world to share information to combat money laundering and terrorism financing.

6.Wolfsburg Principles

This section covers some of the principles of Wolfsburg like principles relating to private banking, corresponding banking and financing terrorism.

POINTS TO REMEMBER:

These principles are briefly explained in this chapter. For full understanding, you may want to read the full principle. We suggest you to go to last chapter 7 of CAMS study Guide, where it has listed all Wolfsburg principles with their download link. You may want to download these principles and go through them once. It will help you to clarify various concepts of money laundering, terrorism financing.

7. World Bank and International Monetary Fund

Here you are going to understand what are these institutions stand for. Also, you are going to read about the different important papers introduced by these organizations relating to money laundering at different time periods.

POINTS TO REMEMBER:

As said earlier you need to focus on the major provisions highlighted in this paper relating to anti-money laundering and terrorism financing.

KINDLY NOTE THAT ALMOST ALL PAPER, PROVISION INTRODUCED BY THIS ORGANIZATION ARE ALMOST SIMILAR TO EACH OTHER. SO, HOW ARE YOU GOING TO IDENTIFY WHICH PAPER OF WHAT ORGANIZATION IS TALKING ABOUT THIS PARTICULAR PROVISION. THIS IS WHERE OUR CAMS STUDY NOTES WILL HELP YOU TO IDENTIFY THESE PROVISION. IN THE STUDY NOTES WE HAVE LISTED THE NAME OF ORGANIZATION, ITS’ IMPORTANT PAPERS, AND HIGHLIGHTED MAJOR PROVISIONS. YOU JUST ONLY REVIEW IT ONLY, ALL THE HARD WORK IS DONE FOR YOU.

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8.USA PATRIOT ACT:

If you already know about this then you must know this is very important not for your exam only but for every day to day work if you are already in the field of compliance or AML/CFT. This section quotes different sections of Act relating to correspondent banking, private banking which you need to know by heart. You don’t need to go through the whole USA patriot Act but some concepts may difficult to understand at first but with repetition, you will be able to cement this in your memory.

POINTS TO REMEMBER:

Repetition.

A final note to our readers, we have introduced the CAMS Forum section where you can put any questions relating CAMS exam, CAMS study guide, general money laundering issues. We invite you all to participate here to gain and share knowledge. You can go to this forum by clicking this link. Just register to spread your word:

Please share this article if you found it useful and believe it will be useful to others.

WE ARE PLEASE TO INFORM YOU THAT, WE HAVE COMPLETED ARTICLE SERIES AND YOUTUBE SERIES OF OVERVIEW OF ALL CHAPTERS OF CAMS STUDY GUIDE. THEY CAN BE ACCESSED BY CLICKING FOLLOWING LINKS.

Chapter 1: Risks and Methods of Money Laundering and Terrorist Financing

Chapter 2 : International AML/CFT Standards

Chapter 3: Anti-Money Laundering/Counter-Terrorist Financing Compliance Programs

Chapter 4: Conducting and Responding to Investigations

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