ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 61:

  An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.

  An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

  Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or "care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

  During the investigation, new suspicious patterns and trends related to check cashing are observed. The Fl decides to conduct a training to ensure that 1) the AML program is robust and 2) the training program is relevant and appropriate. Which parties should be trained on emerging trends and red flags? (Select Two.)

  A. Financial crimes investigation unit

  B. Loan department

  C. Branch personnel

  D. Senior management

  E. The board of directors

  Correct Answer: AC

  The parties that should be trained on emerging trends and red flags are the financial crimes investigation unit (A) and the branch personnel ? These parties are directly involved in detecting, investigating, and reporting suspicious activity related to check cashing or other types of fraud or money laundering. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should provide regular and relevant training to its staff on the AML program, policies, procedures, and systems, as well as on the latest typologies, indicators, and best practices for financial crimes investigations" (p. 36). The FI should also "ensure that the training is tailored to the specific roles and responsibilities of the staff, and that it is updated and evaluated periodically" (p. 36).

  The other parties are not as relevant or appropriate as options A and C. The loan department (B) is not directly related to check cashing or other types of fraud or money laundering, although it may have some exposure to credit or identity fraud. The senior management (D) is responsible for overseeing and supporting the AML program, but not for conducting or supervising financial crimes investigations. The board of directors (E) is responsible for approving and reviewing the AML program, but not for implementing or monitoring it.

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

• Question 62:

  A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.

  An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).

  The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.

  Which investigative actions should the investigator take concerning the 100.000 USD wire transfer? (Select Three.)

  A. Review the wire transfer protocols for this customer.

  B. Gather all account activity for Fl clients that purchased packages from the airline.

  C. Review a sampling of wire transfers initiated by travel companies with Cuba travel packages.

  D. Recommend a plan for the Fl's management to restrict the account relationship.

  E. Review regulations applicable to foreign currency trading transactions.

  F. Locate and review licenses, registrations, and account operating agreements associated with the MTB account.

  Correct Answer: AEF

  The investigator should take the following investigative actions concerning the 100,000 USD wire transfer:

  Review the wire transfer protocols for this customer. This will help the investigator to determine if the wire transfer is consistent with the customer's normal business activity and risk profile, or if it deviates from the established patterns or

  thresholds. Review regulations applicable to foreign currency trading transactions. This will help the investigator to assess if the wire transfer violates any laws or regulations related to currency exchange, such as reporting requirements,

  licensing requirements, or sanctions compliance.

  Locate and review licenses, registrations, and account operating agreements associated with the MTB account. This will help the investigator to verify if the MTB has the necessary authorization and documentation to conduct currency

  exchange transactions and if it has disclosed this activity to the FI. References: Advanced CAMS-FCI Study Guide, pages 32-33.

• Question 63:

  An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

  1.

  YC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 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.

  2.

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

  3.

  Y is 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

  After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed. Which additional information should the investigator request?

  A. Previously filed SARVSTR unrelated to the customer, but similar in content

  B. Formation document/description of the group-related companies

  C. Source of the incoming funds to the group-related companies

  D. Adverse news screening on all names listed in the formation documents

  Correct Answer: C

  The additional information that the investigator should request is the source of the incoming funds to the group-related companies. This is because the customer declared that the ongoing source of funds to this account comes from group-related companies, but the transaction journal shows that the customer received funds from different third parties, not from group-related companies. Therefore, the investigator should verify the relationship and legitimacy of these third parties and their funds with the customer and the group-related companies. The other options are not relevant or necessary for this investigation. References: Advanced CAMS-FCI Certification | ACAMS

• Question 64:

  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

  Correct Answer: ACE

  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

• Question 65:

  Each month the automated transaction monitoring system generates alerts based on predetermined scenarios. An alert was generated in relation to the account activity of ABC Foundation. Below is the transaction history for ABC Foundation (dates are in DD/MM/YYYY format).

  

  The relationship manager for ABC Foundation contacts the client to request more information on the beneficiary of the transfer in Turkey. ABC Foundation advises that this is a not-for-profit charity group called 'Forever Free." Which is the best next step in the investigation?

  A. Contact the financial institution in Turkey that has a relationship with Forever Free and advise them of the investigation.

  B. Update the customer profile to include Forever Free as the recipient of the funds.

  C. Check the junsdiction's list of known chanties with connections to terrorist activity.

  D. File a SAR/STR with the new information learned about the beneficiary.

  Correct Answer: C

  The best next step in the investigation is to check the jurisdiction's list of known charities with connections to terrorist activity ? This is because the FI has a responsibility to verify the legitimacy and reputation of the beneficiary of the funds, especially if it is a charity or non-profit organization that operates in a high-risk jurisdiction or sector. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should conduct enhanced due diligence on all parties involved in the investigation, including checking various sources of information, such as watch lists, sanctions lists, negative news, and official registries" (p. 24). The FI should also check if the beneficiary is consistent with the customer's profile and expected activity.

  The other options are not as appropriate or effective as option C. Contacting the financial institution in Turkey that has a relationship with Forever Free and advising them of the investigation (A) could violate confidentiality or data protection laws, as well as compromise the investigation or alert the customer or beneficiary of the suspicion. Updating the customer profile to include Forever Free as the recipient of the funds (B) could be premature or inaccurate, as it does not verify the nature and purpose of the transfer or the identity and legitimacy of the beneficiary. Filing a SAR/STR with the new information learned about the beneficiary (D) could also be premature or incomplete, as it does not confirm if there is any suspicious or criminal activity involved in the transfer or if there are any other red flags or indicators.

• Question 66:

  CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client I.D. Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai. India Cell Phone: **?quot;-- Alt Phone: Email: *??　*?

  Client Profile Information:

  Sector: Financial

  Engaged in business from (date): 02 Jan 2020

  Sub-sector: Software-Cryptocurrency Exchange

  Expected Annual Transaction Amount: 125.000 USD

  Payment Nature: Transfer received from client's fund

  Received from: Clients

  Received for: Sale of digital assets

  The client identified themselves as "Cryptocurrency Exchange" Client has submitted the limited liability partnership deed. However, the bank's auditing team is unable to identify the client's exact business profile as the cryptocurrency exchange specified by the client as their major business awaits clearance from the country's regulator. The client has submitted documents/communications exchanged with the regulator and has cited the lack of governing laws in the country of their operation as the reason for the delay.

  Investigators determine the ultimate beneficial owner of ABC Tech Corp is a high-net-worth client. The client owns a real estate agency left to her when her spouse died. The spouse provided seed capital for ABC Tech Corp through a direct 1,000.000 Great British Pound (GBP) deposit.

  What additional information would trigger filing a SAR/STR?

  A. The client's spouse's source of wealth was a salary of 250,000 GBP per annum for the past 4 years and rental of properties of 150,000 GBP per annum for the past 6 years.

  B. The client's current net asset value is 8 million GBP, of which 7.5 million GBP was derived from the inheritance.

  C. An open-source search revealed that the client's spouse was a PEP.

  D. The funds for the seed capital were in the form of 50 cashier's checks of 10,000 GBP each and 50 money orders of 10,000 GBP.

  Correct Answer: D

  The additional information that would trigger filing a SAR/STR is the fact that the funds for the seed capital were in the form of 50 cashier's checks of 10,000 GBP each and 50 money orders of 10,000 GBP. This is because this indicates a possible attempt to avoid the reporting threshold of 10,000 GBP for cash transactions, which is a common money laundering technique known as structuring or smurfing12. The other options are not necessarily suspicious, as they do not involve cash transactions or indicate any illicit source of funds. The fact that the client's spouse was a PEP does not automatically make the transaction suspicious unless there are other red flags or risk factors associated with the PEP34 References: 1: Money Laundering Techniques 2: Structuring 3: Politically exposed person

  4: PEP Definition and Meaning - Merriam-Webster

• Question 67:

  Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?

  A. The investigator may remove the evidence collected without asking permission to do so.

  B. The central authority of the requesting country sends a letter of request to the central authority of the other country.

  C. An investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.

  D. The central authority that receives the request sends it to a local judicial officer to find out if the information is available.

  Correct Answer: B

  The first valid step in the Mutual Legal Assistance Treaty (MLAT) international cooperation process is for the central authority of the requesting country to send a letter of request to the central authority of the other country. The letter of request should provide a summary of the facts and information required, the reasons for the request, and any specific legal or procedural requirements that need to be met. (CAMS Manual, 6th Edition, Page 233).

• Question 68:

  A financial regulator is evaluating the effectiveness of a financial institution's (Fl) anti- financial crime program. Which condition should be met to satisfy the regulator?

  A. The program is aligned with the financial industry's anti-financial crime priorities.

  B. The program meets the minimum requirements of anti-financial crime standards, which are published by a financial industry association.

  C. In the past 3 years, internal auditing results show no high-severity issues and a maximum of three medium-seventy and four low-severity issues.

  D. The program is drafted using a risk-based approach to avoid the Fl being used as a conduit for criminal activities.

  Correct Answer: D

  The condition that should be met to satisfy the regulator is that the program is drafted using a risk-based approach to avoid the FI being used as a conduit for criminal activities. A risk-based approach means that the FI identifies, assesses, and understands its exposure to financial crime risks and applies appropriate measures to mitigate them. This is consistent with the international standards and best practices for anti-financial crime compliance. The program being aligned with the financial industry's anti-financial crime priorities, meeting the minimum requirements of anti-financial crime standards published by a financial industry association, or having no high-severity issues in internal auditing results are not sufficient to satisfy the regulator, as they do not necessarily reflect the specific risks faced by the FI or demonstrate its effectiveness in preventing and detecting financial crimes. References: [Advanced CAMS-FCI Study Guide], page 14-15; [FATF Guidance on Risk- Based Approach for Effective Supervision], page 7-8.

• Question 69:

  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.

  Correct Answer: A

  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 70:

  A compliance officer of a financial institution is reviewing a payment for sanctions compliance between two parties in Europe and Asia. The payment is in Euros and involves the provision of services to a company located in a jurisdiction subject to Office of Foreign Assets Control secondary sanctions. Which factor is most important in determining the compliance officer's response?

  A. Asset freezes only prohibit US companies from engaging in certain activities with counterparts from a sanctioned jurisdiction.

  B. A one-off commercial transaction conducted between parties in Europe and Asia is not subject to secondary sanctions.

  C. The threat of US sanctions against foreign individuals and entities continues to exist despite the absence of a US nexus.

  D. Secondary sanctions only target specific sectors of the economy such as the banking and finance sectors.

  Correct Answer: C

  The threat of US sanctions against foreign individuals and entities continues to exist despite the absence of a US nexus. This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 591, which states: "It is important to note that the threat of US sanctions against foreign individuals and entities continues to exist even when there is no direct US nexus (i.e., no US persons or assets involved)."