ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 111:

  Which reputations risk consequence could a financial entity face for violating AML laws?

  A. Loss of high-profile customers
  B. Seizure of assets
  C. Increased audit costs to monitor behavior
  D. Monetary penalties
  D. Monetary penalties

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  According to the Certified Anti-Money Laundering Specialist (CAMS) Manual [1], 6th edition, financial entities that violate Anti-Money Laundering (AML) laws can face several reputational risks such as loss of high-profile customers, seizure of assets, increased audit costs to monitor behavior, and monetary penalties. For example, the US Treasury's Financial Crimes Enforcement Network (FinCEN) imposes civil money penalties on "persons who willfully violate, attempt to violate,conspire to violate, or cause any violation of any provision of the Bank Secrecy Act or its implementing regulations." (CAMS Manual, 6th edition, page26).

• Question 112:

  A financial institution (FI) is fined for failure to implement an effective AML program. Which consequences could the regulator impose on the bank's Chief AML Officer? (Select Three.)

  A. Loss of professional accounting and legal designations
  B. Civil and criminal prosecution, fines, and imprisonment
  C. Ban from employment in the financial services industry
  D. Recommend termination of employment from the FI
  E. Add to the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List
  F. Prohibition from dealing with goods on the Wassenaar List
  B. Civil and criminal prosecution, fines, and imprisonment
  C. Ban from employment in the financial services industry
  D. Recommend termination of employment from the FI

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  Civil and Criminal Prosecution, Fines, and Imprisonment: The Chief AML Officer may face legal action, including both civil and criminal proceedings. This could result in fines and even imprisonment if found guilty of negligence or misconduct related to anti-money laundering compliance. Ban from Employment: Regulators have the authority to ban individuals from working in the financial services industry if they are deemed unfit due to AML-related failures. Such a ban can significantly impact the individual's career prospects. Recommend Termination of Employment: While the regulator cannot directly terminate employment, they can recommend that the financial institution (FI) take appropriate action, including termination, based on the Chief AML Officer's performance.

• Question 113:

  Which statement about U.S. Specified Unlawful Activities (SUA) is true?

  A. At least one SUA must be proven in order to pursue a money laundering conviction
  B. SUAs are generally limited to a small sub-set of crimes
  C. In order to secure a conviction, the defendant must be proven to have known the precise nature of the source of funds
  D. SUAs are limited to crimes that occur within the borders of the U.S. and its territories and possessions
  A. At least one SUA must be proven in order to pursue a money laundering conviction

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  According to 18 U.S.C. ?1956, the money laundering statute, the property involved in a financial transaction must represent the proceeds of some form of unlawful activity, which is defined as a specified unlawful activity (SUA). SUAs include over 250 crimes in six categories, such as RICO predicate offenses, certain offenses against foreign nations, acts constituting a criminal enterprise under the Controlled Substances Act, and federal health care offenses. Therefore, in order to pursue a money laundering conviction, the government must prove that at least one SUA was committed and that the property involved in the transaction was derived from that SUA. References: 18 U.S. Code ?1956 - Laundering of monetary instruments, (a)(1) and ?7). 957. Money Laundering--18 U.S.C. 1956 and 1957, first paragraph. Specified Unlawful Activities (SUA), first paragraph.

• Question 114:

  When investigating an AML event, which techniques would be used to investigate suspected mule accounts? (Select Three.)

  A. Determine if the suspected accounts are being accessed by a common person, telephone number, or device.
  B. Reconcile the stated purpose of the account with actual transaction history and compare with peer groups.
  C. Submit a suspicious activity report to the national financial intelligence unit.
  D. Review the account history and determine if there are previous payments to charity accounts.
  E. Establish the frequency with which the funds are moved in and out of the accounts.
  F. Contact the appropriate law enforcement agency and report the account activity.
  A. Determine if the suspected accounts are being accessed by a common person, telephone number, or device.
  B. Reconcile the stated purpose of the account with actual transaction history and compare with peer groups.
  E. Establish the frequency with which the funds are moved in and out of the accounts.

• Question 115:

  Which scenario should be escalated as potentially suspicious activity?

  A. A retail chain deposits cash into several operating accounts and consolidates the funds into one account.
  B. A domestic business account receives a wire transfer from an international business with no history of such activity or business needs.
  C. A convenience store makes daily deposits or withdrawals primarily in cash.
  D. A corporate account deposits large checks and wire transfers on a frequent basis from existing customers.
  B. A domestic business account receives a wire transfer from an international business with no history of such activity or business needs.

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  A domestic business account receiving a wire transfer from an international business with no history of such activity or business needs should be escalated as potentially suspicious activity. This is because this scenario may indicate an attempt to launder money, evade taxes, or finance terrorism through cross-border transfers that have no apparent economic or lawful purpose. The lack of prior relationship or business justification for the wire transfer may also suggest that the transaction is not consistent with the customer's profile or expected activity. Therefore, this scenario should be investigated further and reported if necessary. References: 9 Financial and Bank Suspicious Activity Examples, Example 2. CAMS Study Guide 6th Edition, page 40-41. https://www.utica.edu/academic/institutes/ecii/conferences/Conducting%20a%20Money% 20Laundering%20Investigation%20-%20C%20King.pptx

• Question 116:

  A financial institution's monitoring system triggers an alert and an internal investigation has confirmed the activity as suspicious. Which of the following should an anti-money laundering specialist do before submitting the suspicious transaction report?

  A. Secure documents related to the suspicious circumstances and the decision to report.
  B. Check with other financial institutions in accordance with the relevant law.
  C. Add information related to the suspicious activity to the customer's account-opening file.
  D. Contact the customer for further information without disclosing the suspicion.
  A. Secure documents related to the suspicious circumstances and the decision to report.

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  The anti-money laundering specialist should secure all the documents related to the suspicious activity and the decision to report before submitting the suspicious transaction report (STR). This is to ensure that the evidence is preserved, the confidentiality is maintained, and the audit trail is documented. The documents may include the customer identification, transaction records, account statements, monitoring alerts, investigation reports, and any other relevant information. Checking with other financial institutions, adding information to the customer's file, or contacting the customer are not appropriate actions to take before submitting the STR. These actions may compromise the confidentiality of the report, alert the customer of the suspicion, or interfere with the investigation by the competent authorities

• Question 117:

  Which statements relate to the role of financial intelligence units (FIUs) in combatting financial crime on a national and international level? (Select Three.)

  A. FIUs can only engage in cross-border collaboration where there exists a reasonable suspicion that is confirmed by a court-issued document.
  B. FIUs are legally empowered to use a wide range of investigative techniques, both in the public and in the private sector.
  C. FIUs use a limited range of investigative techniques.
  D. FIUs have a broad range of financial information to assess suspicious activity alerts.
  E. FIUs can only command data and information requests from public sector entities.
  F. FIUs are able to cooperate both with foreign counterparts and national institutions.
  B. FIUs are legally empowered to use a wide range of investigative techniques, both in the public and in the private sector.
  D. FIUs have a broad range of financial information to assess suspicious activity alerts.
  F. FIUs are able to cooperate both with foreign counterparts and national institutions.

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  According to the ACAMS CAMS Study Guide (the 6th edition), FIUs are central agencies that receive, analyze, and disseminate financial intelligence to support the detection and prevention of money laundering, terrorist financing, and other financial crimes. FIUs have different legal powers and functions depending on their type and jurisdiction, but generally they can use various investigative techniques, such as requesting additional information from reporting entities, accessing databases, conducting analysis, and issuing guidance. FIUs also have access to a wide range of financial information, such as suspicious activity reports, currency transaction reports, cross-border cash declarations, and other relevant data sources, to identify and assess potential illicit activities. Moreover, FIUs can cooperate and exchange information with domestic and foreign counterparts, subject to certain legal and operational safeguards, to facilitate cross- border investigations and prosecutions of financial crimes.

• Question 118:

  How can violations of anti-money laundering laws be a risk to individuals?

  A. Violations can result in civil and criminal fines and penalties against the individuals.
  B. Violations can result in additional legislation that the individuals have to comply with.
  C. Violations can result in enforcement actions that damage the reputation of the individual's employer.
  D. Violations can result in additional and more stringent anti-money laundering training for individuals.
  A. Violations can result in civil and criminal fines and penalties against the individuals.

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  According to the Anti-Money Laundering Specialist (the 6th edition) study guide, individuals who violate anti- money laundering laws can face severe consequences, such as imprisonment, fines, asset forfeiture, and sanctions. These penalties can apply not only to the perpetrators of money laundering, but also to the employees, managers, directors, and officers of financial institutions or other entities that fail to comply with their anti-money laundering obligations. Therefore, violations of anti-money laundering laws can pose a significant risk to individuals, both personally and professionally. References: Anti-Money Laundering Specialist (the 6th edition) study guide, page 9 ACAMS website, section on CAMS certification Money Laundering website, article on "The Consequences of Non-Compliance with Anti-Money Laundering Laws"

• Question 119:

  A school teacher recently opened a private banking account with a major bank. The customer indicated annual income of EUR 45,000 and listed her source of wealth as a EUR 1.5 million inheritance from relatives. The customer plans to invest EUR 12,000 to 15,000 earned annually from bearer bonds. The relationship manager verified the client's identity and documented all of the above information in the account file before opening the account. During a routine review of the account, several electronic fund transfers in excess of EUR 5 million each were made from a diamond distributor. The relationship manager also noticed that in each instance, the customer immediately transferred the funds to bank accounts in Hong Kong. Which of the following is appropriate for the anti-money laundering specialist to recommend?

  A. Arrange a meeting between the customer and legal department.
  B. Contact the competent authority and local law enforcement.
  C. Suspend further customer transactions through the bank.
  D. Investigate the source and purpose of the transactions.
  B. Contact the competent authority and local law enforcement.

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  The customer's profile and transactions are highly suspicious and indicative of possible money laundering. The customer's income, source of wealth, and investment plans do not match with the large and frequent transfers from a diamond distributor, which is a high-risk business sector for money laundering. The customer' s transfers to Hong Kong, which is a high-risk jurisdiction for money laundering, also raise red flags. The anti- money laundering specialist should recommend contacting the competent authority and local law enforcement to report the suspicious activity and cooperate with any investigation. This is in accordance with the FATF Recommendation 20, which states that "If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, by law, to report promptly its suspicions to the financial intelligence unit (FIU)"1. The other options are not appropriate, as they do not address the urgency and severity of the situation. References: 1: FATF (2012), International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, FATF, Paris, France, www.fatf-gafi.org/recommendations.html, p. 19.

• Question 120:

  When a bank performs a risk assessment, what areas should an institution focus on?

  A. The type and location of the institution's clients
  B. The nature and breadth of the services and products the institution provides
  C. The geographic locations where the institution does business
  D. The amount of the money the institution earns prior to taxes
  A. The type and location of the institution's clients
  B. The nature and breadth of the services and products the institution provides
  C. The geographic locations where the institution does business

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  A bank's risk assessment is a process of identifying, measuring, and mitigating the potential risks that the bank faces in its operations, products, services, and customers. According to the ACAMS Study Guide, a bank should focus on the following areas when performing a risk assessment1: The type and location of the institution's clients. This involves analyzing the customer base, the types of accounts and transactions, the source and destination of funds, the level of due diligence and verification, and the risk profile of the customers. For example, a bank should consider whether its customers are individuals or entities, domestic or foreign, politically exposed persons, high-net-worth individuals, non-profit organizations, or cash-intensive businesses. The location of the customers may also indicate the level of exposure to money laundering, terrorist financing, sanctions, or tax evasion risks. The nature and breadth of the services and products the institution provides. This involves evaluating the range and complexity of the products and services offered by the bank, the delivery channels, the payment methods, and the innovation and technology involved. For example, a bank should consider whether it offers wire transfers, correspondent banking, trade finance, private banking, trust and fiduciary services, prepaid cards, mobile banking, or cryptocurrency services. The nature and breadth of the services and products may also affect the level of transparency, traceability, and compliance of the transactions. The geographic locations where the institution does business. This involves assessing the jurisdictions where the bank operates, where its customers reside, where its counterparties are located, and where the funds flow. For example, a bank should consider whether it has branches, subsidiaries, or affiliates in high-risk countries, whether it serves customers from high-risk countries, whether it engages in cross- border transactions, and whether it complies with the local laws and regulations of the countries where it does business. The geographic locations where the institution does business may also influence the level of exposure to political, legal, regulatory, or reputational risks. References: 1: ACAMS Study Guide, Chapter 2: Risk Assessments, 1