CAMS-RM flashcards
CAMS-RM · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Risk-based approach
- Resource allocation proportionate to identified ML/TF risk, with documented rationale for every risk-based decision and control depth matched to residual risk.
- Four pillars
- Internal controls, designated compliance officer, ongoing training, and independent testing; each pillar is a testable governance requirement in AML program reviews.
- Three lines model
- Business units own risk, compliance and risk functions set frameworks and challenge, and internal audit provides independent assurance across the program.
- Risk appetite statement
- Board-approved qualitative statements plus quantitative tolerances defining the level of ML/TF risk the institution is willing to accept across segments.
- Residual risk
- Risk remaining after applying control effectiveness; a rating requires a documented basis for how well controls reduce inherent risk.
- Inherent risk factors
- Customer type, geography, product or service, delivery channel, and transaction volume or value; these drive the initial risk rating before controls.
- Customer due diligence
- Identify and verify the customer, identify beneficial owners, understand purpose and intended nature, and conduct ongoing monitoring proportionate to risk.
- Simplified due diligence
- Reduced CDD measures permitted only where lower risk is documented; identification of the customer and beneficial owner is never waived.
- Ongoing monitoring
- Periodic CDD refresh triggered by risk rating, event-driven review of ownership or adverse media changes, and transaction behavior review against expectations.
- Beneficial owner
- Natural person who ultimately owns or controls the customer, or on whose behalf a transaction occurs; ownership threshold commonly 25% of shares or votes.
- Source of wealth
- Explanation of how the customer's total wealth was accumulated, distinct from source of funds, which explains the origin of specific money.
- Control-based ownership test
- Applied when no natural person meets the ownership threshold; identify the person exercising control by other means, often a senior managing official.
- Scenario threshold
- Value or count parameter triggering a monitoring alert; calibration must use the institution's own baseline and be validated, not copied from peers.
- Alert triage
- Review of monitoring alerts using KYC profile, expected activity, ownership, and adverse media to separate false positives from true matches with documented rationale.
- Monitoring coverage inventory
- Mapping of every product, channel, and entity to at least one monitoring scenario; unmapped items are coverage gaps requiring treatment.
- Fuzzy name matching
- Algorithmic comparison such as Jaro-Winkler or Levenshtein with configurable thresholds, supported by name normalization for transliteration and name order.
- Event-driven re-screening
- Re-screening the full customer book when sanctions or watchlists change, rather than relying only on periodic review cycles.
- Adverse media screening
- Review of negative news using defined sources, financial-crime relevance criteria, and recency rules to limit noise and false positives.
- 50 percent rule
- US OFAC principle treating entities owned 50% or more, directly or indirectly, by one or more blocked persons as themselves blocked.
- Sectoral sanctions
- Restrictions on specific transactions such as debt, equity, or certain services with named targets, rather than a full asset freeze.
- Proliferation financing
- Provision of funds or financial services for weapons of mass destruction proliferation; addressed through targeted financial sanctions and export-control awareness.
- Tipping-off prohibition
- Rule barring disclosure of a suspicious activity report or its contents to the customer or third parties except where law expressly permits.
- Suspicion threshold
- Reporting is triggered by knowledge, suspicion, or reasonable grounds to suspect; proof of criminal conduct is not required for filing.
- Investigation file
- Record of the alert, enrichment performed, decision, approver, and date; regulators assess the documented rationale, not only the outcome.
- Design versus operating effectiveness
- Design asks whether a control can mitigate the risk; operating effectiveness asks whether it actually worked over the tested period.
- Key risk indicators
- Measurable signals such as overdue CDD percentage, alert backlog age, screening false-positive rate, training completion, and unresolved audit findings.
- Independent testing
- Audit or external review covering all four pillars, reporting to the board or its committee and verifying remediation of prior findings.
- Model validation
- Independent assessment of AML model logic, data, thresholds, and performance, documented before deployment and repeated on change.
- Data lineage
- Documentation of source system, transformation, and consumption point for KYC, transaction, and screening data used in AML decisions.
- Trade-based laundering
- Movement of value through mispriced, misdescribed, or phantom goods; indicators include over- or under-invoicing and mismatched shipping documents.
- Virtual asset travel rule
- Requirement that originator and beneficiary information accompany virtual asset transfers between institutions, supporting traceability and screening.
- Mule account typology
- Accounts used to receive and rapidly disperse fraud proceeds, often opened by recruited individuals with profiles inconsistent with expected activity.