ACAMS CAMS-FCI Online Practice Questions and Exam Preparation

ACAMS CAMS-FCI Online Questions & Answers

• Question 81:

  What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

  A. Sanction a country when an individual Fl does not comply with US law.
  B. Subpoena documents from FIs that have no presence in the US.
  C. Revoke the banking licenses of non-US FIs in countries outside the US.
  D. Allow all US regulators to place a non-US Fl on the Specially Designated Nationals and Blocked Persons List.
  B. Subpoena documents from FIs that have no presence in the US.

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  Explanation/Reference:

  According to the CAMS manual 6th edition, the USA PATRIOT Act allows the US government to subpoena documents from foreign financial institutions (FIs) that have no presence in the US (option B). The manual states that "The USA PATRIOT Act provides US law enforcement agencies with the power to subpoena documents from foreign banks that maintain correspondent accounts with US banks or have no presence in the United States" (p. 77).

• Question 82:

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

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  Explanation/Reference:

  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 83:

  Law enforcement (LE) suspects human trafficking to occur during a major spotting 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 alter 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." Which fact should not be included in (he SAR/STR narrative?

  A. The air travel and hotel expenses
  B. The time of the cash deposits
  C. The sporting event
  D. The request by law enforcement
  B. The time of the cash deposits

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  Explanation/Reference:

  The fact that should not be included in the SAR/STR narrative is the request by law enforcement (D). This is because the request by law enforcement is confidential and should not be disclosed to the customer or anyone else who is not authorized to know it. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should not include any reference to the LE request in the SAR/STR narrative, as this could compromise the LE investigation or alert the customer of the suspicion" (p. 35). The FI should also not inform the customer of the LE request or delay filing the SAR/STR because of it.

  The other facts should be included in the SAR/STR narrative, as they are relevant and indicative of human trafficking money laundering. The air travel and hotel expenses (A) show that the customer is involved in moving people across different locations, which could be a sign of human smuggling or trafficking. The time of the cash deposits (B) shows that the customer is receiving cash payments during unusual hours, which could be a sign of illicit activities or services. The sporting event ?shows that the customer is exploiting a high-demand situation for their business, which could be a sign of opportunistic or organized crime.

• Question 84:

  A government entity established a trust to provide social welfare programs. The entity wants cash payments made to persons without supporting documentation. These persons would oversee the allocation of funds to beneficiaries without complying with internal disbursement of government funds controls. Which is the main premise for filing a SAR/STR?

  A. Trust service providers are not obliged by law to follow government internal controls.
  B. Cash disbursements are not allowed for social welfare programs.
  C. Social welfare programs are difficult to document because the beneficiaries are from the informal sector.
  D. The entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring.
  D. The entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring.

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  Explanation/Reference:

  The main premise for filing a SAR/STR is that the entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring. This raises suspicion that the entity may be involved in corruption, fraud, or diversion of funds for illicit purposes. Trust service providers are obliged by law to follow government internal controls, as they are subject to AML/CFT regulations and supervision. Cash disbursements are allowed for social welfare programs, but they should be properly documented and verified. Social welfare programs are not necessarily difficult to document, as there are ways to identify and monitor the beneficiaries, such as biometric data or unique identifiers.

• Question 85:

  A bank's transaction surveillance system triggers an alert for a deposit of 250.000 USO into a client's account. According to the bank's KYC information, the client works for a financial advisory firm, and earns approximately 100,000 USD per year. Which actions should be taken? (Select Three.)

  File the suspicious transaction immediately to the financial intelligence unit.

  A. Discard the alert as a false positive hit
  B. Request information and documentation from the client on the background of the transaction.
  C. Contact the client advisor to learn if he has any insight on the transaction background.
  D. Review the alert if the deposit is made in cash.
  E. Review the transaction background in the bank's transaction platform.
  B. Request information and documentation from the client on the background of the transaction.
  C. Contact the client advisor to learn if he has any insight on the transaction background.
  E. Review the transaction background in the bank's transaction platform.

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  Explanation/Reference:

  According to the Certified Anti-Money Laundering Specialist (CAMS) Manual , 6th edition, if a bank's transaction surveillance system triggers an alert for a deposit of 250.000 USD into a client's account, the bank should take the following

  actions:

  Request information and documentation from the client on the background of the transaction (CAMS Manual, 6th edition, page 46).

  Contact the client advisor to learn if he has any insight on the transaction background (CAMS Manual, 6th edition, page 47).

  Review the transaction background in the bank's transaction platform (CAMS Manual, 6th edition, page 47).

  Discarding the alert as a false positive hit and reviewing the alert if the deposit is made in cash should not be done.

  The bank should request additional information and documentation from the client to better understand the nature of the transaction. Additionally, the bank should reach out to the client advisor to learn if they have any insight on the

  transaction background. Finally, the bank should review the transaction background in the bank's transaction platform to determine if any additional alerts or anomalies are present. (CAMS Manual, 6th Edition, Pages 117-118)

• Question 86:

  A national financial intelligence unit (FIU) is undertaking the country risk assessment for the financing of the proliferation of weapons of mass destruction (WMD). The evaluation involves determining the exposure that financial institutions (FIs) have to operations that evade sanctions. Which should be performed by the FIU to assess proliferation financing risk? (Select Two.)

  A. Compare the international finance operations with national PEP lists to determine if the systems used by FIs are properly calibrated to detect WMD proliferation financing.
  B. Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions.
  C. Prepare new regulations that increase fines for FIs that allow financial operations on behalf of WMD proliferation sanctioned states.
  D. Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection.
  E. Analyze the domestic financial operations that are above the reporting threshold and have similar names to high-level officials of WMD proliferation sanctioned states.
  B. Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions.
  D. Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection.

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  Explanation/Reference:

  The FIU should cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions, as this would help identify any discrepancies or anomalies that could indicate sanctions evasion. The FIU should also evaluate a sample of the amount of false-positive and false- negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection, such as inadequate screening systems, lack of training, or human error. These actions would help the FIU assess the proliferation financing risk and provide feedback and guidance to FIs on how to improve their detection and prevention capabilities. References: Advanced CAMS-FCI Study Guide, page 32-33; [FATF Guidance on Counter Proliferation Financing], page 15-16.

• Question 87:

  A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary.

  An investigator examines the trust. The trust has many layers, including shell companies in known tax havens. The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied.

  Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts. While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested information is shared.

  Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and committed tax evasion.

  What steps should the investigator take to review the accounts held by the second client who is listed in the Paradise Papers? (Select Two.)

  A. Recommend a SAR/STR be filed regarding the second client's use of a questionable trust to open an account.
  B. Review all accounts being reviewed by AML investigators over the past year that have opened trust accounts.
  C. Inform Fl management of deficiencies in their AML program because the second client's activities were not detected.
  D. Monitor all accounts and entities related to the second client
  E. Inform Fl management of the start of a serious risk-based investigation that could result in losses and reputation risk.
  A. Recommend a SAR/STR be filed regarding the second client's use of a questionable trust to open an account.
  D. Monitor all accounts and entities related to the second client

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  Explanation/Reference:

  The investigator should recommend a SAR/STR be filed regarding the second client's use of a questionable trust to open an account, as this could indicate an attempt to conceal the source and ownership of funds, and to evade taxes and sanctions. The investigator should also monitor all accounts and entities related to the second client, as they may be involved in illegal activities or pose a high risk to the FI. The investigator should not review all accounts that have opened trust accounts, as this would be too broad and inefficient. The investigator should not inform FI management of deficiencies in their AML program, as this is not their role or responsibility. The investigator should not inform FI management of the start of a serious risk-based investigation, as this may compromise the confidentiality and integrity of the investigation.

• Question 88:

  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: 1J 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

  Which additional information would support escalating this account for closure?

  A. The bank files SARs/STRs indicating that Y opened accounts for small companies located in close proximity to the bank.
  B. A follow-up request reveals that the account receives funds from loans, collects payments from group-related companies, and sends the payments to the lenders.
  C. A review of outward remittances reveals the same pattern of several simple steps for each transaction,
  D. A review of X's personal bank account shows that X received wire transfers that aggregate the amounts transferred to the group-related companies.
  C. A review of outward remittances reveals the same pattern of several simple steps for each transaction,

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  Explanation/Reference:

  A review of outward remittances reveals the same pattern of several simple steps for each transaction, which could indicate a layering scheme to obscure the origin and destination of the funds. This would support escalating this account for closure, as it is inconsistent with the customer's declared purpose and anticipated activities. The other options are not relevant or sufficient to warrant account closure. References: Advanced CAMS-FCI Certification | ACAMS

• Question 89:

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

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  Explanation/Reference:

  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)."

• Question 90:

  Online payments from a customer's account to three foreign entities trigger an investigation. The investigator knows the funds originated from family real estate after an investment company approached the customer online. Funds were remitted for pre-lPO shares. Which should now occur in the investigation?

  A. Seek evidence for the customer's source of wealth.
  B. Have the relationship manager contact the customer to understand the nature of the transaction.
  C. Review the structure of the transactions to the three entities.
  D. Inspect electronic banking login records.
  C. Review the structure of the transactions to the three entities.

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  Explanation/Reference:

  The correct answer is C because reviewing the structure of the transactions to the three entities can help the investigator to identify any red flags or indicators of fraud, such as unusual amounts, frequency, destinations, or beneficiaries. The

  other options are not as relevant or effective in this scenario. Option A is not necessary because the investigator already knows the source of funds for the customer. Option B is not advisable because contacting the customer directly may

  alert them to the investigation and compromise its integrity. Option D is not helpful because inspecting electronic banking login records does not provide any information about the nature or purpose of the transactions.

  References:

  Advanced CAMS-FCI Study Guide, page 281

  Financial Crime Typologies - Intermediate Certificate Course, Module 32