ACAMS CAMS-FCI Online Practice Questions and Exam Preparation

ACAMS CAMS-FCI Online Questions & Answers

• Question 1:

  Law enforcement (LE) suspects human trafficking to occur during a major sporting event LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.

  An investigator identified a pattern linked to a business. The business' account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3,000 USD. made by a person to the business' account occurred in many branches in the days after the sports event.

  There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates1' and "companionship."

  The Fl wants to create an automated alert for human trafficking money laundering after this investigation. Which activity type should they target?

  A. Payments made to multiple hotels in the same city
  B. Multiple deposits between midnight and 4:00 AM
  C. Deposits made within days of major sporting events
  D. Payments made for virtual currency
  B. Multiple deposits between midnight and 4:00 AM

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  Explanation/Reference:

  The activity type that the FI should target for creating an automated alert for human trafficking money laundering is multiple deposits between midnight and 4:00 AM (B). This is because this pattern is consistent with the indicators of human trafficking identified by the Financial Action Task Force (FATF) and the Egmont Group1, which include: Frequent cash deposits, often in round amounts, outside of normal business hours Deposits made at different branches or ATMs in various locations Lack of information about the nature and purpose of the business Involvement in online platforms that advertise sexual services Expenses related to travel and accommodation The other options are not as relevant or specific as option B. Payments made to multiple hotels in the same city (A) could be a legitimate business expense or a sign of other types of money laundering, such as tax evasion or fraud. Deposits made within days of major sporting events ?could also be explained by other factors, such as increased tourism or gambling. Payments made for virtual currency (D) are not directly related to human trafficking, although they could be used to facilitate money laundering in general.

  References: FATF and Egmont Group, Financial Flows from Human Trafficking, July 2018, available at FATF

• Question 2:

  A criminal is engaged in chain hopping while trying to launder ransomware payments. The criminal will likely:

  A. obscure the funds using a mixer.
  B. convert the funds to a different type of cryptocurrency.
  C. store the funds in a cold wallet.
  D. move the funds to an offshore cryptocurrency wallet.
  B. convert the funds to a different type of cryptocurrency.

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  Explanation/Reference:

  Chain hopping is a technique used by criminals to obscure the traceability of cryptocurrency transactions by converting the funds to a different type of cryptocurrency, often using multiple exchanges or platforms. The other options are not related to chain hopping. References: Advanced CAMS-FCI Study Guide, page 38.

• Question 3:

  Which are primary purposes of Financial Action Task Force {FATF)-Style Regional Bodies? (Select Two.)

  A. Acting as a prudential regulatory body for financial institutions
  B. Providing due diligence for foreign correspondent banks
  C. Providing expertise and input in FATF policy-making
  D. Imposing special measures for non-cooperative jurisdictions
  E. Promoting effective implementation of FATF recommendations
  C. Providing expertise and input in FATF policy-making
  E. Promoting effective implementation of FATF recommendations

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  Explanation/Reference:

  The primary purposes of Financial Action Task Force (FATF)-Style Regional Bodies are to promote effective implementation of FATF recommendations and to provide expertise and input in FATF policy-making. (CAMS Manual, 6th Edition, Page 180)

• Question 4:

  An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000,000 USD to an overseas account associated with a state- run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases.

  The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple of weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities.

  Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients.

  Media reports claimed the firm laundered money by holding money for a fee before returning it to investors.

  Which information should the investigator review first when examining the wire transaction documentation?

  A. The sanctions screening tool to see if the transaction was stopped
  B. Whether the wire transfers were initiated domestically
  C. The Travel Rule requirements for recordkeeping
  D. How the wire transfers were initiated (e.g., phone, online, branch visit)
  D. How the wire transfers were initiated (e.g., phone, online, branch visit)

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  Explanation/Reference:

  The investigator should review how the wire transfers were initiated first, because this could indicate the level of involvement and knowledge of the LLC account holders. If the wire transfers were initiated online or by phone, it could suggest that the account holders were trying to avoid face-to-face contact with the bank staff and reduce the chances of being questioned or identified. If the wire transfers were initiated in person at a branch, it could indicate that the account holders were confident or careless about their activities, or that they had some relationship with the bank staff. The method of initiation could also affect the quality and quantity of information collected by the bank about the wire transfers, such as the purpose, source, and destination of the funds. References: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, page 65.

• Question 5:

  An investigator at a corporate bank is conducting transaction monitoring alerts clearance. KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.

  1.

  X is the UBO. and owns 97% shares of this entity customer;

  2.

  Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR. KYC PROFILE Customer Name: AAA International Company. Ltd Customer ID: 123456 Account Opened: June 2017 Last KYC review date: 15 Nov 2020 Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern: TRANSACTION JOURNAL Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency: Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency: Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties. RFI Information and Supporting documents: According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below: 1) All incoming funds received in HKD and USD currencies were monies lent from non- customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all

  the lenders are engaged in trading business. 2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan

  Based on the KYC profile and the transaction journal, the pattern of activity shows a deviation in:

  A. expected vs. actual activity.
  B. customer risk rating
  C. product risk rating.
  D. U.S. currency incoming vs. outgoing transaction rales.
  A. expected vs. actual activity.

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  Explanation/Reference:

  The correct answer is A because the expected account activities were 1 to 5 transactions per year and around 1 million per transaction amount, but the actual activity showed much more frequent and varied transactions in different currencies and amounts. This indicates a deviation from the customer's profile and risk level. References: Advanced CAMS-FCI Study Guide, page 16

• Question 6:

  The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.

  As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.

  The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.

  Which steps for documenting the final investigation decision are appropriate for the investigator in this scenario?

  A. Exclude any open-source information from record-keeping since it is publicly available.
  B. Add all of the information the Fl has about the subject, their account(s) activity, research results. KYC information, etc. to the SAR/STR.
  C. Document the investigation process and retain all relevant documents in the case management system.
  D. Do not document the investigation process if a SAR/STR is not filed.
  C. Document the investigation process and retain all relevant documents in the case management system.

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  Explanation/Reference:

  The investigator should document the investigation process and retain all relevant documents in the case management system. This is because documenting the investigation process is a good practice to ensure the quality and consistency of the investigation, as well as to facilitate the review and audit of the investigation. Retaining all relevant documents is also important to support the evidence and findings of the investigation, as well as to comply with the record-keeping requirements of the relevant authorities. The other options are incorrect because:

  A. Excluding any open-source information from record-keeping is not advisable, as open-source information can provide valuable insights and context for the investigation, and may not be easily retrievable in the future. B. Adding all of the information the FI has about the subject, their account(s) activity, research results, KYC information, etc. to the SAR/STR is not necessary, as the SAR/STR should only contain the essential information that is relevant and material to the suspicious activity. Adding too much information may obscure the main points and make the SAR/STR less effective.

  D. Not documenting the investigation process if a SAR/STR is not filed is not acceptable, as the investigation process should be documented regardless of the outcome. Documenting the investigation process can help justify why a SAR/STR was not filed, and also provide a reference for future investigations involving the same subject or activity. References: Advanced CAMS-FCI Certification | ACAMS, Section 3: Reporting Suspicious Activity, page 14 Leading Complex Investigations Certificate | ACAMS, Module 4: Documenting Your Investigation, page 4

• Question 7:

  When writing or reviewing a SAR/STR, it is important to:

  A. ensure the narrative is kept to the point; easy to read; and addresses the who, what, when, where, why, and how.
  B. ensure that the narrative is detailed with all available information so that law enforcement can decide what is relevant.
  C. keep the introduction brief but ensure all relevant transactions, account numbers, and suspect names are listed in the conclusion summary.
  D. avoid mentioning suspect names in case it is seen by someone involved in criminal activity, effectively tipping them off.
  A. ensure the narrative is kept to the point; easy to read; and addresses the who, what, when, where, why, and how.

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  Explanation/Reference:

  The correct answer is A because a SAR/STR narrative should be concise, clear, and complete, addressing the who, what, when, where, why, and how of the suspicious activity. Option B is incorrect because providing too much information

  can make the narrative confusing and irrelevant. Option C is incorrect because the introduction should provide a summary of the suspicious activity, not the conclusion. Option D is incorrect because suspect names should be mentioned in the

  narrative to identify the parties involved in the suspicious activity.

  References: Advanced CAMS-FCI Certification Handbook, page 17; Leading Complex Investigations Certificate, Module 3.

• Question 8:

  In the past 6 months, a small financial institution (Fl) has received regular remittances that are increasing in value from a country with high piracy activity. The Fl's AML officer (AMLO) has also noted that piracy in this country has increased in the same time frame. Which recommendation should the AMLO make?

  A. Request the operations department to return inbound remittances when the sender of funds is from this country.
  B. Upgrade the transaction monitoring system of the Fl to include more fields so that more in-depth information is collected about the inward remittances.
  C. File a SAR/STR to the appropriate AML authority immediately.
  D. Conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions.
  D. Conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions.

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  Explanation/Reference:

  Verified Answer: D The recommendation that the AMLO should make is to conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions. This is because the regular and

  increasing remittances from a country with high piracy activity may indicate a possible link to illicit funds derived from piracy or other criminal activities. According to the World Bank, remittances are often used as a channel for money

  laundering and terrorist financing, especially when they originate from or are destined to high-risk jurisdictions1. Therefore, the AMLO should analyze the remittance data to identify the sources, destinations, amounts, frequencies, and

  purposes of the transactions, and compare them with the customer profiles, expected activities, and risk ratings. The AMLO should also review any relevant information from external sources, such as media reports, sanctions lists, or law

  enforcement alerts, to determine if there are any red flags or indicators of suspicious activity. If the investigation reveals any evidence or suspicion of money laundering or terrorist financing, the AMLO should file a SAR/STR to the appropriate

  AML authority.

  References:

  Remittances data - Migration data portal

• Question 9:

  A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank.

  MEMO To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit

  A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered.

  The information contained in the LC is as follows:

  1.

  Advising amount per unit 30.000.00 EU ?0 units of BMW

  2.

  Model IX3

  3.

  Year of registration: 2020

  Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade

  finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy.

  The relationship manager

  Feedback from the RM:

  The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide

  clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country.

  Findings from the investigation from various internal and external sources of information:

  1.

  There were no negative news or sanctions hits on the exporter company, directors, and shareholders.

  2.

  The registered address of the exporting business was a residential address.

  3.

  The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU, based on manufacturer's new price guide.

  4.

  The key controllers behind the exporting company, that is the directors and

  During the investigation, the investigator determines that a nephew of the general (Bank A's customer) is a customer at Bank B. Which step should the investigator take next?

  A. File a SAR/STR in relation to corruption involving the nephew and the general.
  B. Determine whether there is a business relationship between the nephew and the general.
  C. Seek senior management approval to continue the relationship with the nephew.
  D. Flag the nephew as a PEP by association.
  D. Flag the nephew as a PEP by association.

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  Explanation/Reference:

  The step that the investigator should take next is to flag the nephew as a PEP by association (D). This is because the nephew is related to a general who is a senior military official and a customer of Bank A, which is a high-risk jurisdiction with strict capital controls. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should identify and flag any customers who are PEPs or have close associations with PEPs, such as family members or business partners" (p. 24). The FI should also conduct enhanced due diligence on these customers and monitor their transactions for any suspicious or unusual activity.

  The other options are not correct. The investigator should not file a SAR/STR in relation to corruption involving the nephew and the general (A), as this could be premature or unnecessary, as there is no evidence of corruption or criminal activity between them. The investigator should not determine whether there is a business relationship between the nephew and the general (B), as this is not relevant or material to the investigation, as the nephew and the general are customers of different banks and are not involved in the same transaction. The investigator should not seek senior management approval to continue the relationship with the nephew ? as this could be premature or disproportionate, as there is no indication that the nephew poses a high risk or requires termination.

  References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS

• Question 10:

  According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)

  A. The responsibility and authority in the structure
  B. The management structure of the trust
  C. The source of funds in the structure
  D. The general purpose behind the structure
  E. The general nature of business of the trust
  A. The responsibility and authority in the structure
  D. The general purpose behind the structure

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  Explanation/Reference:

  Here is the exact information from the Financial Action Task Force (FATF) Guidance for a Risk-Based Approach for Trust and Company Service Providers:

  "Understanding the management and ownership structure of a trust is crucial in assessing the ML/TF risk it poses. This includes the identity of all settlors, trustees and beneficiaries, and their respective roles and responsibilities, as well as the

  nature and purpose of the trust."

  "TCSPs should obtain and maintain up-to-date information on the purpose and intended nature of the business relationship, the source of funds and wealth, and where relevant, the source of funds or wealth of the settlor and beneficiaries."

  Based on this information, the correct answers are A and D. Trust and Company Service Providers must understand the responsibility and authority in the structure, as well as the general purpose behind the structure in order to assess the

  overall risk of the trust and ensure that any transactions with the trust are legitimate.