Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam 2025 - Free CAMS Practice Questions and Study Guide

The correct answer emphasizes that FATF (Financial Action Task Force) principles are designed to apply universally to all branches of financial institutions, including those located abroad. This comprehensive application is crucial because money laundering and terrorist financing activities are often cross-border in nature. By ensuring that all branches, regardless of their geographical location, adhere to the same standards, the integrity of the financial system is upheld on a global scale.

The FATF principles encourage countries to ensure that their financial institutions implement robust anti-money laundering (AML) and counter-terrorist financing (CTF) measures. These measures include customer due diligence, risk assessment, and the reporting of suspicious transactions. If only domestic branches were required to comply, it would create a loophole that could be exploited for illicit activities through foreign branches that might have less stringent regulations.

This approach helps promote international cooperation and consistency in combating financial crimes, reinforcing the need for all components of financial institutions to work according to the same foundation of principles regardless of their operational location.