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

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What does FATF 40 refer to?

  1. A set of laws regarding online banking

  2. Guidelines specific to various financial sectors

  3. A regulatory body for international trade

  4. Standards for local banks only

The correct answer is: Guidelines specific to various financial sectors

FATF 40 refers to the Forty Recommendations developed by the Financial Action Task Force (FATF), which serve as a comprehensive framework for combating money laundering and terrorist financing across various financial sectors. This set of guidelines is designed to enhance the effectiveness of measures taken by countries to prevent illicit financial activities. The recommendations encompass a wide range of areas, including customer due diligence, record-keeping, reporting suspicious activities, and the roles of regulatory and law enforcement authorities. They are not limited to one specific financial sector but are applicable to banks, securities firms, insurance companies, and other financial institutions, making option B the accurate choice in this context. Other options fail to capture the comprehensive nature and international focus of the FATF Recommendations, which aim to create a cohesive global standard rather than being restricted to local laws, online banking, or trade regulations.

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