ACAMS CAMS-FCI Online Practice Questions and Exam Preparation

ACAMS CAMS-FCI Online Questions & Answers

• Question 91:

  SAR/STR NARRATIVE

  A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

  Client Information:

  Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

  Beneficiary Information:

  As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for the purchase of property in another country.

  Payment Reference:

  ABCXXXXX31PZFG2H

  ABCXXXXXX51PQGEH

  ABCXXXXXX214QWVG

  ABCXXXXXX41PSXA2

  ABCXXXXXX815QWS3

  Concerns:

  1.

  We are unsure about the country of incorporation of the beneficiaries.

  2.

  We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

  3.

  There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

  4.

  Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

  5.

  The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in real estate business which again poses a higher risk.

  When drafting the SAR/STR narrative, the investigator notes several payment references. What additional information should the investigator include in the narrative?

  A. The investigator's concerns based on their subjective opinion
  B. The suspicious accounts and transactions identified
  C. All relevant tables, spreadsheets, and other supporting documentation
  D. Personal tax records pertinent to the owners to indicate tax evasion
  B. The suspicious accounts and transactions identified

  ---

  Explanation/Reference:

  The SAR/STR narrative should include the suspicious accounts and transactions identified, as well as the reasons why they are considered suspicious. The narrative should provide a clear and concise description of the activity, the parties involved, the dates, amounts, and frequencies of the transactions, and any other relevant information that would assist law enforcement in understanding the nature and purpose of the activity. The narrative should not include the investigator's subjective opinion, personal tax records, or supporting documentation that is not essential to explain the suspicious activity. Supporting documentation can be attached separately to the SAR/STR form or provided upon request by law enforcement.

• Question 92:

  A U.S. financial institution (Fl) receives a grand jury subpoena for a corporate client's account. The Fl should:

  A. request the client's consent for the disclosure of account information.
  B. review the corporate account's activity and transactions.
  C. file a SAR/STR.
  D. provide the client with a copy of the subpoena.
  B. review the corporate account's activity and transactions.

  ---

  Explanation/Reference:

  The Fl should review the corporate account's activity and transactions. This is because a grand jury subpoena is a legal request for information or testimony that may be used in a criminal investigation or prosecution. The Fl should review the account for any suspicious or unusual activity that may be related to the subpoena or indicate money laundering, terrorist financing, or other financial crimes. The Fl should also document its review and retain any relevant records. References: Leading Complex Investigations Certificate, Module 3, page 14.

• Question 93:

  In a review of the account activity associated with Nadine Kien, an investigator observes a large number of small- to medium-size deposits from numerous individuals from several different global regions. The money is then transferred to a numbered company. Which is the next best course of action for the investigator?

  

  A. Complete the monthly review and note the activity for next month's review.
  B. File a SAR/STR on the account activity in relation to a potential funnel account.
  C. Recommend the account for exit due to frequent global transactions.
  D. No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations.
  B. File a SAR/STR on the account activity in relation to a potential funnel account.

  ---

  Explanation/Reference:

  The next best course of action for the investigator is to file a SAR/STR on the account activity in relation to a potential funnel account. This is because a funnel account is a type of money laundering scheme that involves depositing funds from multiple sources into a single account, and then transferring them to another account, often in a different jurisdiction. A funnel account can be used to conceal the origin, ownership, and destination of illicit funds, and to evade currency transaction reporting requirements. The investigator should report the suspicious activity to the relevant authorities and document the findings and actions taken. The other options are incorrect because:

  A. Completing the monthly review and noting the activity for next month's review is not sufficient, as it delays the reporting of a possible money laundering scheme and exposes the financial institution to regulatory and reputational risks. C. Recommending the account for exit due to frequent global transactions is not appropriate, as it does not address the underlying issue of potential money laundering and may alert the customer of the investigation.

  D. No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations is not acceptable, as it ignores the red flags of a funnel account and fails to comply with the anti-money laundering obligations of the financial institution. References: Advanced CAMS-FCI Certification | ACAMS, Section 2: Investigating Financial Crimes, page 9 Leading Complex Investigations Certificate | ACAMS, Module 2: Identifying Red Flags, page 5

• Question 94:

  How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

  A. Mutual evaluation
  B. FATF Evaluation Committee
  C. Basel Committee
  D. Series of internal audits followed by reporting to FATF
  A. Mutual evaluation

  ---

  Explanation/Reference:

  "The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a mutual evaluation process. During a mutual evaluation, the FATF assesses a country's legal and institutional framework, its implementation of measures to combat money laundering and terrorist financing, and the effectiveness of its efforts. The FATF then issues a report with recommendations for improvement" [CAMS Study Guide 6th edition, page 15-16].

• Question 95:

  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 dates" and "companionship."

  The Fl receives a keep open' letter from LE for the identified account and agrees to keep the account open. What is the Fl required to do?

  A. Contact the client for information relating to the account.
  B. Stop filing SAR/STR reports on the account and/or customer.
  C. Ensure that the request includes an end date.
  D. Notify LE immediately after new transactions.
  C. Ensure that the request includes an end date.

  ---

  Explanation/Reference:

  The FI is required to ensure that the request includes an end date ?when it receives a keep open letter from LE for the identified account. This is because the FI has to balance its legal obligations to cooperate with LE and to protect its

  customers' privacy and rights. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should request a written confirmation from LE that includes a specific end date for the request, as well as a

  point of contact for any questions or concerns" (p.

  35). The FI should also document the request and its compliance with it, and continue to monitor the account for any suspicious activity.

  The other options are not correct. The FI should not contact the client for information relating to the account (A), as this could compromise the LE investigation or alert the client of the suspicion. The FI should not stop filing SAR/STR reports

  on the account and/or customer (B), as this could violate its regulatory obligations and expose it to legal risks. The FI should not notify LE immediately after new transactions (D), as this could also interfere with the LE investigation or tip off the

  client. The FI should follow the instructions of LE regarding when and how to share information.

• Question 96:

  The intended benefits of section 314(b) of the USA PATRIOT Act include: (Select Three.)

  A. sharing the existence and content of SARs/STRs with other participating FIs.
  B. participating FIs sharing information about suspicious activity by customers that may have otherwise gone unnoticed.
  C. providing mandatory results to law enforcement agencies so that they can more easily obtain useful information.
  D. expediting the filing of SARs/STRs due to the information sharing facilitated by 314(b).
  E. detecting money laundering and TF approaches and schemes across multiple financial institutions (FIs).
  F. obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing (TF).
  B. participating FIs sharing information about suspicious activity by customers that may have otherwise gone unnoticed.
  E. detecting money laundering and TF approaches and schemes across multiple financial institutions (FIs).
  F. obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing (TF).

  ---

  Explanation/Reference:

  Section 314(b) of the USA PATRIOT Act allows financial institutions to share information with each other, under a safe harbor that offers protection from liability, in order to better identify and report potential money laundering or terrorist financing activities. The intended benefits of this information sharing include:

  Participating financial institutions sharing information about suspicious activity by customers that may have otherwise gone unnoticed. For example, if a customer is conducting transactions with multiple financial institutions that individually do not appear suspicious, but collectively indicate a pattern of money laundering or terrorist financing, the financial institutions can share this information and report it to the authorities. Detecting money laundering and terrorist financing approaches and schemes across multiple financial institutions. For example, if a financial institution identifies a new typology or modus operandi of money laundering or terrorist financing, it can share this information with other financial institutions to help them prevent or detect similar activities by their customers. Obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing. For example, if a financial institution has incomplete or insufficient information on a customer or a transaction that raises suspicion, it can request more information from another financial institution that may have dealt with the same customer or transaction. References:

  Section 314(b) | FinCEN.gov Section 314(b) Fact Sheet - FinCEN.gov

• Question 97:

  A financial institution (Fl) has considered the available relevant factors in a transaction and has determined it will file a SAR^STR. Which is needed to support the contents of the report to the financial intelligence unit?

  A. Definitive proof that suspicious activity occurred
  B. Enough circumstantial evidence about the suspicious activity for a criminal proceeding
  C. No factual description of the suspicious activity
  D. Low evidentiary threshold about the suspicious activity
  D. Low evidentiary threshold about the suspicious activity

  ---

  Explanation/Reference:

  A SAR/STR does not require definitive proof or enough circumstantial evidence of suspicious activity, as these are high evidentiary thresholds that may be difficult or impossible to obtain by the FI. A SAR/STR should include a factual

  description of the suspicious activity, as this is essential for the FIU to analyze and disseminate the information. A low evidentiary threshold means that the FI has reasonable grounds to suspect that the activity is related to money laundering,

  terrorism financing, or other financial crimes, based on the available relevant factors. This is the main criterion for filing a SAR/STR.

  References: Advanced CAMS-FCI Certification | ACAMS, Suspicious activity report - Wikipedia, Suspicious Transaction Report (STR) / Suspicious Activity Report (SAR ...

• Question 98:

  As part of an internal fraud investigation, an AML officer has decided to interview an employee. Which statement is most consistent with best practices?

  A. Information on the employee can be gathered from coworkers and supervisors before the employee is interviewed.
  B. Prior to the interview, the investigator should inform the employee about the allegations.
  C. The employee should be supplied with all information about any ongoing fraud investigations.
  D. The employee should be notified that failing to cooperate can lead to loss of employment.
  A. Information on the employee can be gathered from coworkers and supervisors before the employee is interviewed.

  ---

  Explanation/Reference:

  As part of an internal fraud investigation, an AML officer should gather information on the employee from coworkers and supervisors before the interview, as this can help to establish a baseline of the employee's behavior, role, and responsibilities, and identify any red flags or anomalies. The other options are not consistent with best practices because they can compromise the integrity of the investigation, violate the employee's rights, or discourage cooperation. References: Advanced CAMS-FCI Certification Handbook, page 28.

• Question 99:

  Which payment method for purchasing luxury items is a red flag for potential money laundering?

  A. Personal loan
  B. Cash
  C. Wire transfer
  D. Credit card
  B. Cash

  ---

  Explanation/Reference:

  According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1]. Reference: [1] Financial Action Task Force. (2013). Money Laundering and Terrorist Financing Through the Real Estate Sector. https://www.fatf- gafi.org/media/fatf/documents/reports/ML-TF-through-real-estate.pdf

• Question 100:

  SAR/STR NARRATIVE

  A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

  Client Information:

  Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that

  span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

  Beneficiary Information:

  As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior

  management as part of a bonus scheme. The purpose behind this payment was for purchase of property in another country.

  Payment Reference:

  ABCXXXXX31PZFG2H

  ABCXXXXXX51PQGEH

  ABCXXXXXX214QWVG

  ABCXXXXXX41PSXA2

  ABCXXXXXX815QWS3

  Concerns:

  1.

  We are unsure about the country of incorporation of the beneficiaries.

  2.

  We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

  3.

  There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

  4.

  Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

  5.

  The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in a real estate business which again poses a higher risk.

  The monitoring system of the correspondent institution flags the transaction as suspicious activity. The correspondent bank needs to send a request for information to the respondent bank. Which elements should be included in the request? (Select Three.)

  A. Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s)
  B. Full transaction history of the correspondent bank's customer
  C. The account profile of the customer and their KYC data
  D. The respondent bank's customer's senior management bonus plan
  E. The contract pertaining to the purchase of property in another country
  F. The last 6 months of transactional history
  A. Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s)
  C. The account profile of the customer and their KYC data
  E. The contract pertaining to the purchase of property in another country

  ---

  Explanation/Reference:

  The request for information should include the following elements:

  Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s) (Option A): This is necessary to verify the identity and ownership structure of the remitter and to assess the risk level of the customer and the

  transaction.

  The account profile of the customer and their KYC data (Option C): This is necessary to understand the nature and purpose of the customer's business relationship with the respondent bank and to compare it with the observed transactional

  activity.

  The contract pertaining to the purchase of property in another country (Option E):

  This is necessary to verify the legitimacy and source of funds for the transaction and to identify the ultimate beneficiary of funds. The other options are not relevant or necessary for the request for information. The full transaction history of the

  correspondent bank's customer (Option B) is too broad and may not be related to suspicious activity. The respondent bank's customer's senior management bonus plan (Option D) is not relevant to the transaction and may not be available to

  the respondent bank. The last 6 months of transactional history (Option F) is also too broad and may not be related to the suspicious activity.

  References:

  Advanced CAMS-FCI Certification Handbook, page 19