Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

According to FATF Recommendation 13, financial institutions are required to report suspicious activities to their national Financial Intelligence Unit (FIU). This recommendation emphasizes the importance of collaboration between financial institutions and government agencies in combating money laundering and terrorist financing. By reporting suspicious transactions or activities, financial institutions help to ensure that law enforcement authorities are informed about potential criminal activities, enabling them to investigate and take appropriate action.

The focus of this recommendation is on the necessity of timely and accurate reporting, which supports the overall integrity and security of the financial system. By establishing mechanisms for reporting, authorities can monitor and analyze trends and patterns that may indicate money laundering or terrorist financing, ultimately enhancing the effectiveness of the countermeasures in place.

The other options either undermine the goal of combatting financial crimes or do not align with regulatory expectations. For instance, ignoring suspicious activity could allow illicit activities to continue unchallenged. Consulting with customers about suspicious activity could potentially compromise investigations and alert individuals who may be involved in illegal activities. Disclosing suspicious activity to the public would not only violate confidentiality and privacy laws but could also hinder ongoing investigations.