Authority Reports, Trends, and Typologies

What Typology Reports Are

A typology is a documented, recurring method that criminals use to launder money or finance terrorism — for example, trade-based money laundering (TBML), the misuse of shell companies, or the layering of funds through virtual assets. Typology reports describe these schemes, the warning signs, and case studies, so that institutions can recognize and disrupt them. CAMS expects candidates to translate a typology into concrete program action: new monitoring rules, refined red flags, and enhanced due diligence triggers.

Distinguish two terms the exam likes to test:

Who Publishes Them

Several authorities produce trend and typology material, and CAMS may ask you to match the source to its output:

• FATF — issues typology reports and guidance (e.g., on virtual assets, proliferation financing, and professional money launderers), plus the periodic National/Mutual Risk assessments.
• FATF-Style Regional Bodies (FSRBs) — produce region-specific typologies (e.g., APG, MONEYVAL).
• FinCEN (the US FIU) — issues advisories and alerts (for example on human trafficking, elder financial exploitation, or ransomware) that often direct institutions to add a specific SAR narrative keyword.
• The Egmont Group — publishes sanitized FIU case studies showing cross-border laundering patterns.
• The Wolfsberg Group — an industry body of global banks issuing principles and guidance (correspondent banking, source-of-wealth, transaction monitoring).

High-Yield Current Typologies

Candidates should recognize these recurring schemes and their red flags:

• Trade-based money laundering — over/under-invoicing, multiple invoicing, mis-described goods, and routing through high-risk jurisdictions. Red flag: invoice value sharply inconsistent with market price.
• Virtual assets — use of mixers/tumblers, peeling chains, and unregistered exchanges; FATF's "travel rule" (Recommendation 16 / R.15 for VASPs) requires originator and beneficiary information to accompany transfers.
• Shell and front companies — opaque beneficial ownership, no genuine economic activity, nominee directors.
• Funnel accounts and structuring — many cash deposits below the reporting threshold across branches; smurfing.
• Human/wildlife trafficking flows — funneling, third-party payments, and victims used as money mules.

Turning Reports into Controls

The exam-ready habit is to read a typology and ask: which red flag does this add, which monitoring scenario should fire, and which customers now warrant enhanced due diligence? When a FinCEN advisory names a scheme, institutions should update detection scenarios and use any specified SAR keyword so the FIU can aggregate filings.

Common traps:

• A typology is the method; a red flag is the indicator. Do not conflate them.
• Typology reports are guidance to strengthen controls, not binding lists to screen against (unlike sanctions lists).
• A single red flag is rarely conclusive — context and the risk-based approach decide whether to escalate.
• The Wolfsberg Group is an industry body, not a regulator; its guidance is influential but not law.

Reading a Typology Like an Analyst

Worked example: a FATF report on professional money launderers describes networks that offer laundering as a service, using third-party collection accounts, cash-intensive front businesses, and trade flows to integrate proceeds. The exam-ready response is to extract concrete controls: flag unrelated third parties funding an account, scrutinize cash-intensive businesses whose deposits exceed plausible turnover, and review trade transactions for invoice anomalies. A typology is only useful once converted into a monitoring rule, a red flag, and an enhanced-due-diligence trigger.

Trade-based money laundering deserves special attention because it is among the hardest schemes to detect and a recurring exam topic. The core techniques are over-invoicing (paying more than goods are worth to move value out), under-invoicing (the reverse), multiple invoicing (billing one shipment several times), and phantom shipments (no goods move at all). Red flags include invoice prices far off market, goods inconsistent with a customer's business, and circuitous routing through unrelated jurisdictions. An institution counters TBML with price-benchmarking, document review, and trade-finance-specific monitoring.

Virtual assets are the fastest-moving area. FATF's guidance brought Virtual Asset Service Providers (VASPs) into the standards and extended the travel rule so that originator and beneficiary information must accompany transfers above a threshold. Red flags include use of mixers and tumblers, transfers to unhosted wallets, structuring across many small transfers, and links to darknet markets. The constant theme across all typology work is the risk-based approach: a single indicator rarely justifies a SAR on its own, but a cluster of indicators in context does, and the institution must document why it escalated or cleared the alert.

The final exam habit for this domain is to connect a published trend to a feedback loop. When an FIU or FATF reports that a typology is rising, institutions tune monitoring thresholds and scenarios; the refreshed monitoring produces more relevant SARs; those SARs sharpen the authorities' picture; and the next report refines the typology further. CAMS rewards candidates who see this as a continuous cycle rather than a one-time read. Note too that typology reports are descriptive and non-binding, unlike sanctions lists, which are mandatory — confusing guidance with a screening obligation is a designed trap.

A strong answer treats authority reports as the raw material for keeping a risk-based program current, applies professional judgment to a cluster of indicators, and documents the rationale so that an examiner can later see why an alert was escalated or cleared.