ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 161:

  Which does the USA PATRIOT Act stipulate for foreign banks concerning correspondent banking?

  A. US banks that maintain correspondent accounts for foreign banks must keep identification records of foreign bank owners with 50% or more ownership in the bank
  B. A subpoena issued to a foreign bank that maintains a correspondent account in the US can require the bank to submit any records except for records in a foreign jurisdiction.
  C. The US federal banking agency can require foreign banks to produce records or information related to any account opened in the US or other countries.
  D. Illicit funds deposited with a foreign bank can be seized by the US government by confiscating the same amount of funds deposited in a correspondent account in the US.
  D. Illicit funds deposited with a foreign bank can be seized by the US government by confiscating the same amount of funds deposited in a correspondent account in the US.

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  The USA PATRIOT Act stipulates that US banks that maintain correspondent accounts for foreign banks must keep identification records of foreign bank owners with 50% or more ownership in the bank. This ensures that the US government can track the flow of funds through the correspondent accounts and prevent money laundering and terrorist financing. Additionally, the US federal banking agency can require foreign banks to produce records or information related to any account opened in the US or other countries. This allows the agency to monitor the activities of foreign banks and ensure compliance with US regulations.

• Question 162:

  Which type of formal agreement occurs between countries that wish to aid each other in the investigation and enforcement of criminal laws?

  A. Joint Comprehensive Peace Agreement
  B. Mutual Legal Assistance Treaty
  C. Foreign Information Exchange
  D. Inter-country Agreement to Combat Trafficking
  B. Mutual Legal Assistance Treaty

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  A Mutual Legal Assistance Treaty (MLAT) is an agreement between two or more countries that allows for the exchange of information and evidence in the investigation and enforcement of criminal laws. MLATs provide a framework for countries to assist each other with investigations, prosecutions, and other legal matters, including the exchange of information, evidence, documents, and testimony. MLATs are commonly used in investigations related to money laundering, terrorism, and other transnational crimes.

• Question 163:

  What should a compliance officer do during an ongoing investigation into a client's activities by a competent authority?

  A. Ensure communication with regulatory and law enforcement authorities is conducted only through the Board of Directors
  B. Communicate only in writing regulatory and law enforcement authorities in line with applicable local laws
  C. Communicatewith regulatory and law enforcement authorities in line with applicable local laws
  D. Only provide information that is specifically and directly requested
  A. Ensure communication with regulatory and law enforcement authorities is conducted only through the Board of Directors

• Question 164:

  Which are red flags indicating potential engagement of a bank employee in money laundering? (Select Two.)

  A. Lavish lifestyle that cannot be supported by an employee's salary
  B. Reluctance to take a vacation when the employee has sufficient leave
  C. Failure to meet business goals for more than one period
  D. Providing longer than usual services for a certain customer
  E. Maintaining friendships with customers and going to restaurants, games, and other events
  A. Lavish lifestyle that cannot be supported by an employee's salary
  E. Maintaining friendships with customers and going to restaurants, games, and other events

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  The two red flags indicating potential engagement of a bank employee in money laundering are A. Lavish lifestyle that cannot be supported by an employee's salary, and E. Maintaining friendships with customers and going to restaurants, games, and other events. A bank employee who has a lifestyle that cannot be supported by their salary could be receiving money from illicit activities. Similarly, if the employee is maintaining friendships and going to social events with customers, they could be receiving money in exchange for providing special services. These behaviors should be monitored closely to ensure that the employee is not engaging in activities that could be linked to money laundering.

• Question 165:

  Which type of transactions present the highest risk?

  A. Wire transfers from a publicly listed company
  B. Payroll payments
  C. Social insurance payments
  D. Foreign exchanges
  D. Foreign exchanges

• Question 166:

  A large financial institution (Fl) is considering expanding business to an area of the world with weak AML laws. The risk-based assessment indicates that the location will increase the Fl's risk appetite beyond the stated acceptable amount. Which risk factors should be used to identify the priority of the Fl?

  A. Geographic risks
  B. Unknown third-party risks
  C. Cash-intensive businesses risks
  D. Anonymous transactions risks
  A. Geographic risks

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  A. Geographic risks should be used to identify the priority of the Fl in this scenario. According to the CAMS Manual (6th Edition), "Geographic risk refers to the possibility that the location of a customer, transaction, or product may increase the likelihood of money laundering or terrorist financing because of weak or nonexistent AML/CFT controls" (p. 59). In this scenario, the expansion to an area of the world with weak AML laws would increase the Fl's geographic risk. Certified Anti-Money Laundering Specialist (the 6th edition), Section 3.2.3 Geographic Risks, p.59.

• Question 167:

  Which product type is subject to US extra-jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act?

  A. Commercial lending
  B. Correspondent banking
  C. Trade finance
  D. Private banking
  B. Correspondent banking

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  Correspondent banking is the product type that is subject to US extra-jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act. This is because correspondent banking involves the provision of banking services by one bank (the correspondent) to another bank (the respondent) or to the respondent's customers. Correspondent banking enables cross-border transactions and access to foreign financial systems, but also poses significant money laundering and terrorist financing risks due to the lack of transparency and accountability of the parties involved. The USA PATRIOT Act requires US financial institutions to apply enhanced due diligence measures to correspondent accounts for certain foreign banks, such as those operating under offshore banking licenses, those owned or controlled by foreign governments, or those of primary money laundering concern. These measures include obtaining information about the ownership, management, and anti-money laundering controls of the foreign bank, as well as the identity and activity of the customers using the correspondent account. The USA PATRIOT Act also authorizes the US Treasury to prohibit or impose conditions on the opening or maintaining of correspondent accounts for foreign banks that are involved in money laundering or terrorist financing activities.

• Question 168:

  Which three measures are contained in Financial Action Task Force 40 Recommendations for reporting suspicious activity? (Choose three.)

  A. The activity should be reported promptly to the country's financial intelligence unit.
  B. The financial institution has been contracted by law enforcement regarding the activity.
  C. The financial institution has grounds to believe the activity is related to terrorist financing.
  D. The financial institution has contacted the account holder to determine the activity of the account.
  E. The financial institution has reasonable grounds to suspect the funds are proceeds of criminal activity.
  A. The activity should be reported promptly to the country's financial intelligence unit.
  C. The financial institution has grounds to believe the activity is related to terrorist financing.
  E. The financial institution has reasonable grounds to suspect the funds are proceeds of criminal activity.

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  REPORTING OF SUSPICIOUS TRANSACTIONS [https://www.fatf- gafi.org/media/fatf/documents /recommendations/pdfs/FATF%20Recommendations%202012.pdf] 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). According to the Financial Action Task Force`s (FATF) Recommendation 20, a suspicious transaction report (STR) or a suspicious activity report (SAR) is filed by a financial institution or, by a concerned citizen, to the local Financial Intelligence Unit if they have reasonable grounds to believe that a transaction is related to criminal activity. [https://aml-cft.net/library/suspicious-transaction-report-str-suspicious-activity-report-sar/]

• Question 169:

  What are two requirements of United States financial institutions when conducting business with an international institution as a result of the USA PATRIOT Act? (Choose two.)

  A. Performing enhanced due diligence on shell banks
  B. Performing due diligence on correspondent accounts
  C. Visiting the head office of the international financial institution
  D. Complying with Special Measures issued under the USA PATRIOT Act
  A. Performing enhanced due diligence on shell banks
  B. Performing due diligence on correspondent accounts

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  The USA PATRIOT Act imposes several requirements on U.S. financial institutions when dealing with foreign financial institutions, especially those that pose a high risk of money laundering or terrorist financing. Two of these requirements are: Performing enhanced due diligence on shell banks: A shell bank is a bank that has no physical presence in any country and is not affiliated with a regulated financial group. The USA PATRIOT Act prohibits U.S. financial institutions from opening or maintaining correspondent accounts for shell banks, and requires them to take reasonable steps to ensure that their correspondent accounts are not being used by shell banks indirectly. Performing due diligence on correspondent accounts: A correspondent account is an account established by a financial institution to receive deposits from, make payments on behalf of, or handle other financial transactions for a foreign financial institution. The USA PATRIOT Act requires U. S. financial institutions to collect and verify certain information about the foreign financial institution, such as its ownership, licensing, and anti-money laundering policies, and to assess the risk of money laundering or terrorist financing associated with the correspondent account.

• Question 170:

  A bank is completing a periodic KYC profile review for a small digital marketing company based in New York City . Which of the following would be a red flag ?

  A. The account activity includes deposit activity into both savings and checking accounts .
  B. The account activity includes incoming funds transfers at irregular intervals from small businesses located in New York .
  C. The account activity includes frequent purchases of tickets to industry conferences and other events .
  D. The account activity includes deposits made in multiple branches around New York City into the same account .
  D. The account activity includes deposits made in multiple branches around New York City into the same account .

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  Money laundering risks arise when transaction patterns are inconsistent with a business's expected activity . Option D (Correct): Multiple cash deposits in different branches is a known structuring (smurfing) technique , used to evade cash transaction reporting thresholds . Option A (Incorrect): Depositing into both checking and savings accounts is normal behavior . Option B (Incorrect): Irregular incoming payments may require further review but are not inherently suspicious . Option C (Incorrect): Industry-related expenses (e.g., conference tickets) are normal business activity .