Financial Crime Risks by Sector

Financial crime risks of securities, MSBs and payments, insurance, virtual assets, gaming, real estate, gatekeepers, trusts, accountants and other high-risk sectors.

5 minutes 5 Questions

In the Certified Anti-Money Laundering Specialist (CAMS) framework, 'Financial Crime Risks by Sector' refers to understanding how money laundering, terrorist financing, fraud, and sanctions evasion vulnerabilities differ across industries, so that risk-based controls can be tailored appropriately. …

Concepts covered
Money Services Businesses and RemittanceCasinos and Online GamblingCryptoasset Laundering: Mixers, Privacy Coins and DeFiLife Insurance and Annuity Product RisksAccountants and Auditors as EnablersSecurities and Broker-Dealer RisksAbuse of Non-Profit Organisations and CharitiesLawyers, Notaries and Other GatekeepersBeneficial Ownership Concealment and NomineesFree Trade Zones and Import-Export StructuresHawala and Informal Value Transfer SystemsInvestment Funds and Asset Management RisksDealers in Precious Metals, Stones and High-Value GoodsArt, Antiquities and Luxury AssetsReal Estate and Property LaunderingVirtual Asset Service Providers and the Travel RulePayment Service Providers and E-MoneyLending, Mortgage and Consumer Finance Product RisksTrusts and Company Service ProvidersPrepaid Cards and Stored Value ProductsEcommerce and Marketplace Risks
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CAMS - Financial Crime Risks by Sector Example Questions

Test your knowledge of Financial Crime Risks by Sector

Question 1

A bank's transaction monitoring flags a large incoming wire to a gallery customer for the sale of a painting. The payer is a company in a secrecy jurisdiction with no apparent link to the art market. An art advisor arranged the sale and acted for a principal whose identity he says is protected by client confidentiality. The painting is being shipped to a freeport for storage. What should the compliance analyst do FIRST?

Correct Answer: Request the gallery's file identifying the end buyer and the payer's beneficial owner

The red flags center on hidden ownership: an opaque secrecy-jurisdiction payer, an advisor citing confidentiality, and freeport storage. So the analyst's first step is to request the gallery's records identifying the end buyer and the payer's beneficial owner, to confirm who is really behind the funds.
Provenance records and export licences address the painting's legitimacy, not the source of funds or who the buyer is. Referring straight to the MLRO for an STR skips the basic inquiry that might resolve or confirm the suspicion. Checking the freeport operator's licence and storage agreement does not reveal who controls the money or the asset.
Key concept: beneficial ownership verification and customer due diligence in art market transactions.

Question 2

Under the FATF standards, which non-profit organisations are the intended focus of targeted, risk-based measures to prevent terrorist financing abuse?

Correct Answer: Those whose activities or characteristics put them at risk of TF abuse

FATF Recommendation 8, as revised in 2023, requires countries to apply focused, proportionate, risk-based measures only to those non-profit organisations that fall within the FATF definition and are identified, through a risk assessment, as being at risk of terrorist financing abuse because of their activities or characteristics.
Charitable or tax-exempt status does not create TF risk, and blanket coverage of the whole sector is expressly discouraged. Using cash couriers to send funds to high-risk areas may be one risk factor, but it is not the defining test. Size thresholds ignore the actual risk profile.
Key concept: a risk-based, proportionate approach to NPO oversight under Recommendation 8.

Question 3

A transaction monitoring analyst at an online gambling operator reviews a verified player. Over two days, the player funded the account with several prepaid cards, placed a handful of minimum roulette bets against the house, and claimed no promotions. The player then requested withdrawal of nearly the full balance to a newly added bank account. Which financial crime risk do these facts MOST likely indicate?

Correct Answer: Layering prepaid funds through minimal play into a bank payout

Funding with several prepaid cards, placing only a few minimum bets against the house, and withdrawing nearly the full balance to a new bank account shows the gambling account being used to convert hard-to-trace prepaid value into apparently legitimate bank funds, which is classic layering.
Chip dumping requires deliberate losses to another player, but these bets were against the house. Bonus abuse is ruled out because no promotions were claimed and the player is verified. Structuring involves splitting cash to stay below a reporting threshold, and no cash deposits or threshold avoidance are described.
Key concept: recognizing minimal-play deposit-and-withdraw cycling as layering in online gambling.

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