ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 131:

  A compliance officer is reviewing transactions related to a company suspected of being involved in wildlife trafficking. Which of activities below are common in wildlife trafficking schemes? (Select Two.)

  A. Large dollar wire transfers between wildlife farms and firms operating in inconsistent lines of business
  B. Exchanging fiat currency to cryptocurrency to accomplish payment to the wildlife farm
  C. Activity involving politically exposed persons with environmental, game, or forestry oversight
  D. Payment of transportation charges using a fraudulent financial instrument
  E. Customer requests payment of proceeds to an unrelated third party
  B. Exchanging fiat currency to cryptocurrency to accomplish payment to the wildlife farm
  D. Payment of transportation charges using a fraudulent financial instrument

• Question 132:

  Which is a key role of FATF-Style Regional Bodies (FSRBs)?

  A. Support the system of mutual evaluation
  B. Setting regional standards for combatting money laundering
  C. Bring additional terrorist financing laws into action in the region
  D. Enforce the specific FATF laws in the region
  A. Support the system of mutual evaluation

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  one of the key roles of FATF-Style Regional Bodies (FSRBs) is to support the system of mutual evaluation, which is a peer review process that assesses the level of compliance and effectiveness of each member country's anti-money laundering and counter-terrorism financing (AML/CFT) regime12. FSRBs conduct mutual evaluations in accordance with the FATF's methodology and standards, and share the results and recommendations with the FATF and other FSRBs3. Mutual evaluations help identify the strengths and weaknesses of each country's AML/CFT system, and provide a basis for technical assistance and follow-up actions4. References: What are the 9 FATF-Style Regional Bodies (FSRBs)? - Sygna1 FATF-Style Regional Bodies (FSRBs) - Asia/Pacific Group on Money Laundering2 The Role of FATF Style Regional Bodies (FSRBs) in Combating ... - IDMerit3 9 FATF-Style Regional Bodies (FSRBs) - fineksus.com4

• Question 133:

  What are two risks to institutions for violating anti-money laundering laws as demonstrated by the 2012 HSBC settlement with United States authorities? (Choose two.)

  A. Forfeiture of assets
  B. Civil money penalties
  C. Loss of bank charter/license
  D. Imprisonment of bank employees
  A. Forfeiture of assets
  B. Civil money penalties

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  Institutions that violate anti-money laundering laws may face various risks and consequences, such as legal, regulatory, reputational, and operational risks. As demonstrated by the 2012 HSBC settlement with United States authorities, two of the most significant risks are: Forfeiture of assets. This means that the institution may have to surrender some or all of its assets that are related to the money laundering activities or violations. For example, HSBC agreed to forfeit $1.256 billion as part of its deferred prosecution agreement with the US Department of Justice. Civil money penalties. This means that the institution may have to pay fines or penalties to the government or other regulatory agencies for violating the anti-money laundering laws or regulations. For example, HSBC agreed to pay $665 million in civil money penalties to various US regulators, including the Office of Foreign Assets Control, the Federal Reserve Board, and the Office of the Comptroller of the Currency. The other two options, C and D, are not as common or relevant to the 2012 HSBC settlement. Loss of bank charter/license may occur in extreme cases where the institution is deemed unfit to operate or poses a serious threat to the financial system. Imprisonment of bank employees may occur if the employees are found guilty of criminal charges, such as fraud, conspiracy, or wilful violation of anti-money laundering laws. However, these outcomes are usually reserved for individuals, not institutions, and depend on the specific facts and circumstances of each case. References: 1: HSBC announces settlements with authorities, 2012, https://www.hsbc.com/-/files/hsbc/investors /stock-exchange-announcements/2012/december/2012-12-11-hsbc-announces-settlements-with- authorities.pdf 2: Settlement Agreement between the U.S. Department of the Treasury's Office of Foreign Assets Control and HSBC Holdings plc, 2012, https://ofac.treasury.gov/recent-actions/20121211_33 3: HSBC settles on record US fee, 2012, https://www.dw.com/en/hsbc-settles-in-us-money-laundering- probe/a-16443391 4: HSBC pays record $1.9bn fine to settle US money-laundering accusations, 2012, https://www. theguardian.com/business/2012/dec/11/hsbc-bank-us-money-laundering 5: HSBC to pay $1.9bn in US money laundering penalties, 2012, https://www.bbc.com/news/business- 20673466

• Question 134:

  What should be proven about the effectiveness of FATF 40 recommendations during a FATF mutual evaluation of a country?

  A. Money laundering and terrorist financial risks are understood by the FIs in the evaluated country.
  B. The evaluated country has implemented compliant AML/CFT laws and regulations.
  C. There is evidence that the defined outcomes of the evaluated country's AML/CFT system are achieved.
  D. The assessed country has created a Financial Intelligence Unit (FIU) to manage suspicious activities.
  C. There is evidence that the defined outcomes of the evaluated country's AML/CFT system are achieved.

• Question 135:

  Which are essential elements of a KYC program identified by the Base1 Committee on Banking Supervision? (Select Two.)

  A. Internal control
  B. Customer acceptance policy
  C. Code of conduct
  D. Risk appetite
  E. Risk management
  B. Customer acceptance policy
  E. Risk management

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  According to the Basel Committee on Banking Supervision, a sound KYC program should include four essential elements: customer acceptance policy, customer identification, on-going monitoring of higher risk accounts, and risk management1. Customer acceptance policy defines the types of customers that the financial institution (FI) is willing to accept and the criteria for doing so. Customer identification involves verifying the identity and beneficial ownership of the customers and obtaining information on their activities and sources of funds. On-going monitoring of higher risk accounts involves reviewing the transactions and behavior of the customers that pose higher risks of money laundering or terrorist financing and updating their information and risk profiles. Risk management involves establishing appropriate policies, procedures, controls, and audit functions to ensure the effective implementation and oversight of the KYC program

• Question 136:

  A financial institution files a suspicious transaction report on a customer as the result of a high volume of large currency deposits to pay off a loan. A law enforcement officer calls the anti-money laundering officer to discuss the suspicious transaction report. Which of the following is the anti-money laundering officer legally permitted to do?

  1.

  Discuss any aspects of the reported activity.

  2.

  Provide copies of the customer's loan documents.

  3.

  Explain the customer's loan payment history.

  4.

  Send the deposit documents referenced in the suspicious transaction report.

  A. 1 and 2 only
  B. 1 and 4 only
  C. 2 and 3 only
  D. 2 and 4 only
  B. 1 and 4 only

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  According to the guidance issued by the Financial Crimes Enforcement Network (FinCEN) and the federal banking agencies, a financial institution is legally permitted to discuss any aspects of the reported activity with the law enforcement officer who contacts them about the suspicious transaction report (SAR), as long as the officer provides appropriate credentials and a written request for the information. The financial institution is also legally permitted to send the deposit documents referenced in the SAR, as they are part of the supporting documentation that may be requested by law enforcement However, the financial institution is not legally permitted to provide copies of the customer's loan documents or explain the customer's loan payment history, as they are not directly related to the reported activity and may contain confidential information that is protected by privacy laws or contractual agreements. The financial institution should only disclose the minimum amount of information necessary to respond to the law enforcement request and should not volunteer any information that is not relevant or requested

• Question 137:

  What is a criterion for FATF membership?

  A. The country should be democracy
  B. The country should be amember of a FATF-style regional body
  C. The country should have already implemented all of the FATF Recommendations
  D. The country should have already implemented the standards of the European Union Directives
  B. The country should be amember of a FATF-style regional body

• Question 138:

  A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank's corporate audit department will conduct the review.

  The compliance officer will review the final report before it is released to the Board of Directors.

  What is the issue with this situation?

  A. Independent reviews must be performed annually
  B. The review must be performed by a group outside of the bank
  C. The final report must be presented directly to the board of directors
  D. There is a conflict of interest with the management of the review process
  C. The final report must be presented directly to the board of directors

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  The method of purchasing chips with cash and redeeming them for a check is used to launder money in casinos. This is because the check can be deposited into a bank account or cashed at another location, creating a paper trail that appears to be legitimate. The check can also be used to conceal the source and amount of the cash, as well as the identity of the person who obtained it. This method is also known as "chip washing" or "chip dumping" and is one of the common ways that money launderers exploit casinos12. References: 1: CAMS Certification Package - 6th Edition | ACAMS, Chapter 2: Money Laundering Risks and Methods, p. 32-33 2: FATF Report: Money Laundering through the Physical Transportation of Cash, October 2015, p. 28-29, http://www.fatf-gafi.org/media/fatf/documents/reports/money-laundering-through-transportation-cash.pdf

• Question 139:

  The main purpose of the US Treasury Department for OFAC's extraterritorial reach is to:

  A. accomplish the foreign policy and national security goals of the US.
  B. defend the US against questionable trade practices of its economic rivals.
  C. protect allied nations of the US from the economic threats of non-allied nations.
  D. align OFAC's and other countries' extraterritorial reach requirements.
  A. accomplish the foreign policy and national security goals of the US.

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  The Office of Foreign Assets Control (OFAC) is a department of the US Treasury that administers and enforces economic and trade sanctions imposed by the US against countries and groups of individuals, such as terrorists and narcotics traffickers. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals. The main purpose of the US Treasury Department for OFAC's extraterritorial reach is to apply these sanctions to any person or entity that is subject to US jurisdiction, or that engages in transactions involving US persons, US dollars, or US goods or services. This way, the US can exert pressure on the targets of the sanctions and prevent them from accessing the US financial system or market. OFAC's extraterritorial reach is authorized by Congressional legislation or presidential emergency powers, and is often based on UN Security Council resolutions or multilateral agreements. References: Office of Foreign Assets Control (OFAC): Definition, Sanctions About OFAC | Office of Foreign Assets Control OFAC's Extraterritorial Reach: Purpose of the US Treasury Department Reference: https://www.natlawreview.com/article/aggressive-extraterritorial-reach-us-economic-sanctions- foreign-company-exposure-to

• Question 140:

  Which of the following provides anti-money laundering specialists information related to money laundering trends?

  1.

  Egmont Group's 100 Cases

  2.

  Financial Action Task Force Typologies

  3.

  FinCEN's SAR Activity Review

  4.

  The Wolfsberg Principles

  A. 1, 2, and 3 only
  B. 1, 2, and 4 only
  C. 1, 3, and 4 only
  D. 2, 3, and 4 only
  A. 1, 2, and 3 only

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  The Egmont Group's 100 Cases1, the Financial Action Task Force Typologies2, and FinCEN's SAR Activity Review3 are all sources of information related to money laundering trends, methods, and risks. They provide examples, analysis, and guidance on how to detect, prevent, and report money laundering and other financial crimes. The Wolfsberg Principles4, on the other hand, are a set of global standards for the prevention of money laundering in the correspondent banking and private banking sectors. They are not intended to provide information on money laundering trends, but rather to establish best practices and minimum requirements for financial institutions to comply with anti-money laundering regulations and expectations. References: Egmont Group's 100 Cases1 Financial Action Task Force Typologies2 FinCEN's SAR Activity Review3 The Wolfsberg Principles4