ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 181:

  What is one recommendation of the Basel Committee's 2001 paper Customer Due Diligence for Banks"?

  A. Numbered accounts should not be allowed
  B. Certain types of private banking can be exempt from KYC procedures
  C. Banks should develop dear descriptions of acceptable customers
  D. Politically Exposed Persons (PEPs) should not be accepted as customers
  C. Banks should develop dear descriptions of acceptable customers

• Question 182:

  Which three areas do FATF's 40 recommendations cover? Choose 3 answers

  A. International Cooperation
  B. Prescriptive sentences for predicate offenses
  C. Financial systems and their regulation
  D. The criminal justice system
  A. International Cooperation
  C. Financial systems and their regulation
  D. The criminal justice system

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  The 40 Recommendations provide a complete set of countermeasures against money laundering and terrorist financing, covering the identification of risks and development of appropriate policies; the criminal justice system and law enforcement; the financial system and its regulation; the transparency of legal persons and arrangements; and international cooperation.

• Question 183:

  A recruitment manager in the human resources department of a bank has shortlisted a candidate for the position of relationship manager in its private banking division.

  The bank's compliance policy requires proper background checks to protect against fraud and money laundering risks .

  Which resources would be most useful for identifying potential negative information regarding the shortlisted candidate? (Select Three.)

  A. Past employment records.
  B. Personal references from close associates.
  C. Personal resume.
  D. Internet and public media searches.
  E. Criminal history searches.
  A. Past employment records.
  D. Internet and public media searches.
  E. Criminal history searches.

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  Financial institutions must conduct thorough background checks on employees in sensitive roles (e.g., private banking) to mitigate fraud, insider trading, and money laundering risks. Option A (Correct): Past employment records help verify work history and identify any red flags related to prior financial misconduct. Option D (Correct): Internet and media searches reveal any negative press, regulatory issues, or connections to illicit activity. Option E (Correct): Criminal history searches help screen for prior convictions related to financial crimes. Why Other Options Are Incorrect: Option B (Incorrect): Personal references are less reliable and may not uncover objective risk factors. Option C (Incorrect): A resume is self-reported and should be verified using independent sources. Best Practices for Employee Background Screening: Conduct enhanced due diligence for high-risk roles (e.g., private bankers, compliance officers). Use reliable background screening tools and legal databases. Verify employment history and check against regulatory blacklists.

• Question 184:

  When an institution conducts an internal investigation into an account following a law enforcement inquiry, it should consider a number of factors to independently determine if the account should be dosed. Which three considerations should be made when making the determination about closing an account? Choose 3 answers

  A. The institution's policies and procedures for closing an account
  B. Oral requests by a law enforcement agency or prosecutor for the account to be dosed
  C. signed written requests by a law enforcement agency or prosecutor on official letterhead for the account to remain open
  D. The level of seriousness of the underlying conduct
  A. The institution's policies and procedures for closing an account
  B. Oral requests by a law enforcement agency or prosecutor for the account to be dosed
  C. signed written requests by a law enforcement agency or prosecutor on official letterhead for the account to remain open

• Question 185:

  A law enforcement official calls a bank inquiring about a customer who is currently under investigation. The law enforcement official requests information about the customer. How should the bank respond?

  A. Confirm the customer is either a current or former customer
  B. Inform the board of directors before responding to the request
  C. Provide the requested information to help aid in the investigation
  D. Request a formal letter be submitted to verify the validity of the request
  D. Request a formal letter be submitted to verify the validity of the request

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  The bank should request a formal letter be submitted to verify the validity of the request, as this is the best practice to ensure compliance with the law and protect customer privacy. The bank should not confirm or deny the existence of a customer relationship, nor provide any information without proper authorization. The bank should also not inform the board of directors before responding to the request, as this could compromise the confidentiality of the investigation or alert the customer. References: ACAMS CAMS Certification Video Training Course, Module 2: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Section 2.3: Data Protection and Privacy, Slide 10 ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Page 51 Reference: https://ico.org.uk/for-organisations/guide-to- freedom-ofinformation/receiving-a-request/

• Question 186:

  An oil exploration company based in France does business with oil refineries in Iran, which is subject to comprehensive Office of Foreign Assets Control (OFAC) sanctions. What type of OFAC sanctions should be imposed against the French company?

  A. Sectoral
  B. Country-based
  C. Secondary
  D. List-based
  C. Secondary

• Question 187:

  How does the Financial Action Task Force (FAT F) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

  A. Mutual evaluation
  B. FATF Evaluation Committee
  C. Basel Committee
  D. Series of internal audits followed by reporting to FATF
  A. Mutual evaluation

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  The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a process known as mutual evaluation. This process involves peer reviews, where experts from other member countries assess the technical compliance and the effectiveness of a country's anti-money laundering and counter-terrorist financing (AML/CTF) framework. The FATF has developed a methodology that identifies 11 key areas, or immediate outcomes, that an effective AML/CTF system should achieve, and uses them as the basis for the mutual evaluation. The FATF publishes the mutual evaluation reports, which provide an in-depth analysis of the strengths and weaknesses of each country's AML/CTF regime, as well as recommendations for improvement. References: 1: An effective system to combat money laundering and terrorist financing, FATF, February 2013. 2: Report on the State of Effectiveness and Compliance with the FATF Standards, FATF, June 2021. 3: Financial Action Task Force (FATF) | Meaning, Functions, Impact, Finance Strategists, September 2023. 4: FATF Recommendations, FATF, October 2020.

• Question 188:

  What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

  A. Depositing illicit funds into an account set up for a front company
  B. Directing third parties to exchange illicit cash for negotiable instruments
  C. Wiring illicit funds from an account at one bank to an account at another bank
  D. Using illicit funds that had previously been deposited to purchase a luxury vehicle
  C. Wiring illicit funds from an account at one bank to an account at another bank

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  The integration stage of money laundering is where the illicit funds are reintroduced into the legitimate financial system, making them appear as lawful income or assets. This may include using multiple accounts, transferring funds between different banks or jurisdictions, and engaging in various financial activities to legitimize the illicit funds. The integration stage aims to make the illicit funds appear legitimate and indistinguishable from lawful funds within the financial system1. Option C is an example of the integration stage of money laundering involving a bank or another deposit- taking institution, as it involves moving the illicit funds from one bank account to another, creating a complex trail of transactions that obscures the origin and ownership of the funds. This technique is also known as wire transfer laundering or electronic funds transfer laundering2. Option A is an example of the placement stage of money laundering, as it involves depositing the illicit funds into the financial system for the first time, using a front company as a cover for the illegal source of the funds. A front company is a legitimate business that is used to conceal or facilitate illicit activity. Option B is an example of the layering stage of money laundering, as it involves converting the illicit cash into other forms of value that are less conspicuous and easier to move, such as negotiable instruments. Negotiable instruments are documents that promise payment to a specified person or the bearer, such as checks, money orders, or traveler's checks. Option D is not an example of the integration stage of money laundering involving a bank or another deposit- taking institution, as it does not involve any financial transactions or accounts. It is rather an example of the integration stage of money laundering involving the purchase of goods or services, such as a luxury vehicle, with the illicit funds that had previously been deposited and layered through the financial system. References: 1: Integration Stage of Money Laundering: Bank or Deposit-Taking Institution 2: Process of Money Laundering: Placement, Layering, Integration - Tutorial ACAMS Study Guide 6th Edition, Chapter 2, page 32 ACAMS Study Guide 6th Edition, Chapter 2, page 34 The Three Stages Of Money Laundering And How Money Laundering Works Reference: https://www.moneylaundering.ca/public/law/3_stages_ML.php

• Question 189:

  Which action should financial institutions with cross border correspondent banking activity be required to perform according to the Financial Action Task Force 40 Recommendations?

  A. Gather a list of their politically exposed customers
  B. Identify natural persons who own or control more than 5%
  C. Obtain senior management approval before establishing the relationship
  D. Obtain a third party independent review of the respondent's anti-money laundering program
  C. Obtain senior management approval before establishing the relationship

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  According to the Financial Action Task Force (FATF) 40 Recommendations, financial institutions should obtain senior management approval before establishing new correspondent banking relationships1. This is to ensure that the financial institution has assessed the money laundering and terrorist financing risks associated with the respondent institution and has applied appropriate due diligence measures. The FATF also requires financial institutions to gather sufficient information about the respondent institution, its business activities, its reputation, its supervision, and its anti-money laundering and counter-terrorist financing policies and procedures1. Additionally, the FATF recommends that financial institutions document the respective responsibilities of each institution and prevent the use of their accounts by shell banks1. References: 1: Guidance on Correspondent Banking Services, FATF, 2016 https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF% 20Recommendations%202012.pdf (15)

• Question 190:

  A recent anti-money laundering audit revealed several regulatory reporting violations and lapses with the organization's anti-money laundering policy. As a result, the compliance officer has created a follow-up matrix to document progress in correcting the identified deficiencies. To whom should the compliance officer provide regular updates of corrective action to help ensure the appropriate oversight?

  A. Audit management
  B. Human Resources
  C. Business line managers
  D. Designated board committee
  D. Designated board committee

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  The compliance officer should provide regular updates of corrective action to the designated board committee, as they are ultimately responsible for the oversight of the organization's anti-money laundering program. The board committee should be informed of the audit findings, the corrective action plan, the progress and challenges, and the completion of the remediation. This will help ensure that the board committee is aware of the risks and issues, and can provide guidance and support to the compliance officer and the management. References: ACAMS CAMS Certification Study Guide 6th Edition, Chapter 2, page 671 ACAMS CAMS Certification Exam Outline, Domain 2, Task 2.52