BAFT Certificate in Principles of Payments (CertPAY) Practice Test

Layered routing of payments is an example of a circumvention strategy because it involves creating a complex network through which payments are processed to obscure their true origin or destination. This strategy is often utilized to sidestep regulatory scrutiny, evading detection by leveraging various channels or methods that may not be directly tracked or monitored by financial institutions or regulators.

This approach can be particularly attractive in scenarios where individuals or entities seek to maintain anonymity or anonymity in their financial dealings. By splitting payments into multiple layers or paths, the users can effectively confuse tracking efforts, making it difficult to trace back illicit activities or funds.

In contrast, regular audits of financial operations, increased customer transparency, and correct documentation of all transactions serve to enhance compliance, accountability, and traceability in financial activities. These practices are aligned with legal and ethical standards in financial management and aim to prevent the kinds of risky or fraudulent behavior that circumvention strategies exploit.