ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 191:

  The Financial Action Task Force recommends the incorporation of some measures in customer due diligence programs including:

  A. identifying the number of beneficial owners without the verification of their true identity.
  B. conducting the risk assessment of products and services.
  C. conducting ongoing due diligence on the business relationship and monitoring of transactions.
  D. identifying the products and services and their suitability to customers.
  C. conducting ongoing due diligence on the business relationship and monitoring of transactions.

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  Ongoing Due Diligence: FATF emphasizes the importance of continuous monitoring of business relationships and transactions. This involves regularly assessing the risk associated with a customer and ensuring that the information remains up-to-date. It includes monitoring transactions for any suspicious activity or red flags. Beneficial Owners: Identifying beneficial owners is crucial, but it must be done with verification of their true identity. This is part of the initial due diligence process. Risk Assessment: Conducting risk assessments is essential, but it is not specific to customer due diligence. Risk assessment applies broadly to anti-money laundering (AML) programs. Products and Services Suitability: While understanding the suitability of products and services is relevant, it is not a direct measure within customer due diligence.

• Question 192:

  Which accurately describes the social and economic impacts of money laundering?

  A. Money laundering impacts the financial sector, which is critical for economic growth.
  B. Foreign investors are often attracted to jurisdictions with significant money laundering activity as the same conditions favour legitimate economic activity.
  C. Money launderers generally remit any tax revenue that would be due in the jurisdictions in which they operate via front businesses.
  D. Increased money laundering generally results in greater economic stability as profits are reinvested in the jurisdiction.
  A. Money laundering impacts the financial sector, which is critical for economic growth.

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  Money laundering has a significant negative impact on the financial sector by undermining the integrity of financial markets. It distorts asset and commodity prices and leads to the misallocation of resources, which can dampen economic growth. The process also erodes public trust in the financial system and can deter foreign investment.

• Question 193:

  Which is an emerging risk associated with cyber-enabled fraud?

  A. Multiple people colluding to place funds in the financial market
  B. Receipt of joint account wire transfers
  C. Mismatch between account names and government-issued documentation
  D. Frequent transactions in round or whole dollars
  C. Mismatch between account names and government-issued documentation

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  This is an emerging risk associated with cyber-enabled fraud because the use of false identities and documents can allow criminals to disguise their activities and evade detection. In such cases, the name and address provided on the account may not match the name and address on the government-issued documentation. This discrepancy can be difficult to detect, making it a potential risk for financial institutions.

• Question 194:

  When the minimum CDD standards of the home and host countries differ, the offices in the host countries should follow which requirements?

  A. Local rules and regulations
  B. The minimum required
  C. Thehigher standard of the two
  D. The CDD standards required by the home country
  C. Thehigher standard of the two

• Question 195:

  A new compliance officer is reviewing the bank's anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another financial institution, renamed the internal

  records group, and streamlined cash handling procedures.

  Which factor causes the compliance officer to update the bank's risk assessment?

  A. The bank acquired another institution
  B. The internal records group has been re-named
  C. The cash handling procedures were streamlined
  D. The risk assessment was completed six months ago
  A. The bank acquired another institution

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  Assessing AML/CFT is an ongoing and evolving component of maintaining a compliant AML/CFT program. Evaluating the risk-scoring model and conducting the risk assessment itself may need to be performed annually, every 18 to 24 months, before the launch of a new product or when an acquisition of another financial institution occurs.

• Question 196:

  Which activities could be considered a potential spear phishing scam? (Select Three.)

  A. An employee receives a phone call requesting that money be sent to assist someone in trouble.
  B. A courier delivers a duplicate invoice to a business that contains updated payment details of an existing supplier.
  C. Payroll receives an external email from an employee looking to update their bank account information.
  D. A business sends its employees an email warning that email passwords must be changed to prevent cyber-fraud.
  E. An employee receives an email that asks to download an attachment, but the attachment is a malware.
  F. Members of a religious organization receive a donation request by email claiming to be from their leader.
  B. A courier delivers a duplicate invoice to a business that contains updated payment details of an existing supplier.
  C. Payroll receives an external email from an employee looking to update their bank account information.
  E. An employee receives an email that asks to download an attachment, but the attachment is a malware.

• Question 197:

  An anti-money laundering consultant audits a bank's current anti-money laundering policies, procedures and controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses. During a review

  of the custom list, the anti-money laundering consultant determines that he and the bank have mutual clients. The bank's written anti-money laundering program includes a process for the bank to establish the identity of the person with whom

  they conduct business, but does not address monitoring of customer account activity.

  The consultant should recommend the bank:

  A. Continue to follow the current written anti-money laundering program.
  B. Focus on high-risk customer acceptance procedures.
  C. Reduce the risk rating on the mutual customers.
  D. Revise the procedures to better assess ongoing customer activity.
  D. Revise the procedures to better assess ongoing customer activity.

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  According to the ACAMS Study Guide, an effective AML program should include four key elements: internal controls, independent testing, designated compliance officer, and training1. Internal controls are policies, procedures, and processes that help prevent, detect, and report money laundering and terrorist financing activities. One of the essential components of internal controls is customer due diligence (CDD), which involves identifying and verifying the customer, understanding the nature and purpose of the customer relationship, and conducting ongoing monitoring of customer transactions and risk profiles2. Ongoing monitoring is crucial for detecting and reporting suspicious activities, updating customer information, and reassessing customer risk ratings3. In this case, the bank's written AML program does not address monitoring of customer account activity, which is a significant gap in its internal controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses, which are considered high-risk customers for AML purposes4. The bank should have enhanced due diligence (EDD) measures for these customers, such as obtaining additional information, conducting more frequent reviews, and applying stricter transaction limits5. The fact that the consultant and the bank have mutual clients does not affect the risk rating or the due diligence requirements of those customers. Therefore, the consultant should recommend the bank to revise its procedures to better assess ongoing customer activity and comply with the AML standards. References: 1: ACAMS Study Guide, Chapter 2: Developing an Effective Anti-Money Laundering Program 2: ACAMS Study Guide, Chapter 3: Conducting Customer Due Diligence 3: ACAMS Study Guide, Chapter 4: Ongoing Monitoring and Suspicious Activity Reporting 4: ACAMS Study Guide, Chapter 5: Identifying High-Risk Customers 5: ACAMS Study Guide, Chapter 6: Applying Enhanced Due Diligence Measures

• Question 198:

  A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds. Which allows the US authorities to seize the funds of the foreign bank held with the US bank?

  A. The Financial Crimes Enforcement Network Customer Due Diligence Final Rule
  B. The 6th EU AML Directive
  C. Regulations of the Office of Foreign Assets Control, US Department of Treasury
  D. The USA PATRIOT Act
  D. The USA PATRIOT Act

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  The USA PATRIOT Act of 20011 is a comprehensive anti-terrorism and anti-money laundering legislation that grants various powers and authorities to the US government to combat money laundering, terrorist financing, and other financial crimes. Among its provisions, Title III of the Act, also known as the International Money Laundering Abatement and Anti-Terrorist Financing Act of 20012, specifically addresses the issue of correspondent banking and the risks of money laundering and terrorist financing through foreign banks that maintain accounts with US banks. Section 319 of Title III3 authorizes the US Attorney General or the Secretary of the Treasury to issue a subpoena or summons to any foreign bank that maintains a correspondent account in the US, and to request any records relating to such account, including records maintained outside the US. Furthermore, Section 319(b) of Title III4 allows the US authorities to seize the funds of the foreign bank held with the US bank, if the foreign bank fails to comply with such a subpoena or summons, or if the US authorities initiate a civil forfeiture action against the funds in the correspondent account. Therefore, the USA PATRIOT Act is the correct answer, as it enables the US authorities to seize the funds of the foreign bank held with the US bank, if the correspondent account is found to have facilitated a transaction involving tainted funds.

• Question 199:

  What is an indicator of suspicious activity?

  A. A customer who pay back a late loan all at once after collecting on a bad debt
  B. A convenience store that brings in $20s and $10s and requests small bills and change
  C. Large and frequent credit balances on a credit card resulting in request for refunds
  D. An online retailer that uses a third-party payment processor to facilitate its transactions
  C. Large and frequent credit balances on a credit card resulting in request for refunds

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  Large and frequent credit balances on a credit card resulting in request for refunds is an indicator of suspicious activity because it may suggest that the cardholder is using the credit card to launder money or to conceal the source of funds. This is also known as credit card refund fraud or credit card laundering. The cardholder may make purchases with the credit card using illicit funds, then request refunds to another account or in cash, thus transferring the funds to a legitimate or less traceable channel. This activity may also be used to evade currency reporting requirements or to avoid detection by law enforcement or financial institutions. References: ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 2: Money Laundering Risks and Methods, page 381 Suspicious Activity Reporting Indicators and Examples, U.S. Department of Homeland Security, Indicator 14: Excess Purchases or Transactions2 Credit Card Laundering, Money Laundering Bulletin, Issue 245, October 2019

• Question 200:

  Which three are principles found in the document "Principles of information Exchange between Financial Intelligence Units (FIUs)"?

  A. The exchange of information between FIUsshould take place as informally and as rapidly as possible and with no prerequisites, while guaranteeing protection of privacy and confidentiality of the shared data
  B. Differences in the definition of offenses that fall under the competence of FIUs should be before free exchange of information takes place
  C. The Egmont principle of free exchange of information at the FIU level should be possible on the basis of reciprocity, including spontaneous exchange
  D. It should be possible for communication betweenFIUs to take place directly and without intermediaries
  A. The exchange of information between FIUsshould take place as informally and as rapidly as possible and with no prerequisites, while guaranteeing protection of privacy and confidentiality of the shared data
  C. The Egmont principle of free exchange of information at the FIU level should be possible on the basis of reciprocity, including spontaneous exchange
  D. It should be possible for communication betweenFIUs to take place directly and without intermediaries