ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 211:

  One key aspect of promoting an enterprise-wide compliance culture within a financial institution (FI) is that the:

  A. first line of defense should establish its own policies independently.
  B. revenue generating business sectors should have precedence over compliance.
  C. relevant information should be shared throughout the organization.
  D. cost of compliance should increase proportionately to revenues.
  C. relevant information should be shared throughout the organization.

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  An enterprise-wide compliance culture is a centralized, coordinated approach to ethics and compliance program design and assessment that cuts across multiple business units within an organization1. One key aspect of promoting such a culture is that the relevant information should be shared throughout the organization, so that all employees are aware of the compliance risks, policies, procedures, and expectations, and can act accordingly2. Sharing information also facilitates collaboration, communication, and feedback among different functions and levels of the organization, and helps identify and address any gaps or issues in the compliance program3. By contrast, the other options are not conducive to an enterprise-wide compliance culture, as they either create silos, conflicts, or inefficiencies in the compliance function. References: 1: Enterprise Compliance Risk Management Services | Deloitte US 2: Enterprise Risk Management and Risk Culture - McKinsey and Company 3: FRB: Speech, Biesnterprise-wide Compliance Programsebruary 4, 2004 https://www.ifc.org/wps/wcm/connect/e7e10e94-3cd8-4f4c-b6f8-1e14ea9eff80 /45464_IFC_AML_Report.pdf?MOD=AJPERESandCVID=mKKNshy (51)

• Question 212:

  A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?

  A. The provision of remote check deposit services
  B. The provision of cash services
  C. The provision of payable through accounts
  D. The provision of brokerage services
  B. The provision of cash services

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  Retail banks typically have a high inherent risk of money laundering due to their provision of cash services. This is because cash is a preferred medium of exchange for criminals and terrorists, and retail banks provide a convenient way for them to move large sums of money without detection. Retail banks are also vulnerable to money laundering through the use of false identities and other deceptive practices. (CAMS Manual, 6th Edition, Page 8).

• Question 213:

  An international bank is headquartered in Madrid, Spain, with an office in New York City (NYC), US. The Madrid office is investigating a transaction originating from a customer of the NYC office and inquires whether the NYC office can share

  any relevant further information on the individual. Upon further research, the NYC office finds that they have filed a Suspicious Activity Report (SAR) on the individual in the previous year.

  Which factors need to be considered before sharing the requested information? (Select Two.)

  A. The bank should consider jurisdictional privacy requirements and its own policies and procedures to determine what information to share.
  B. The information should only be shared on a need-to-know basis.
  C. The bank should report this to the Financial Crimes Enforcement Network (FinCEN) and receive formal guidance before sharing the information.
  D. The foreign bank must always request approval by its national anti-financial crime authority to share any information cross-border.
  A. The bank should consider jurisdictional privacy requirements and its own policies and procedures to determine what information to share.
  B. The information should only be shared on a need-to-know basis.

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  Banks must adhere to strict privacy laws and SAR confidentiality rules when handling customer information, especially in cross-border investigations. Option A (Correct): Banks must consider privacy laws such as the US Bank Secrecy Act (BSA) , the EU General Data Protection Regulation (GDPR) , and their internal policies before sharing data. Option B (Correct): Information should be shared only on a need-to-know basis , ensuring compliance with AML regulations and internal procedures . Option C (Incorrect): While FinCEN provides SAR guidance, banks do not need to seek FinCEN's permission for every internal information request. Option D (Incorrect): International requests must comply with legal frameworks, but there is no universal requirement for approval by national authorities.

• Question 214:

  A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the

  bank's jurisdiction.

  Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.)

  A. Identify the money laundering scheme and submit a suspicious transaction report
  B. Identify if there is a decrease in the sale of large denomination U.S. bank notes to casas de cambio by the bank
  C. Identify deposits by casas de cambio that include third-party items including sequentially numbered monetary instruments
  D. Identify multiple wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio
  A. Identify the money laundering scheme and submit a suspicious transaction report
  D. Identify multiple wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio

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  According to the ACAMS Study Guide 6th Edition, Chapter 2, page 38, one of the steps that a financial institution should take when it suspects money laundering activity is to file a suspicious transaction report (STR) or a suspicious activity report (SAR) to the relevant authorities. This will alert the regulators and law enforcement of the potential money laundering scheme and provide them with valuable information to trace the funds and identify the perpetrators. Another step that a financial institution should take is to identify any unusual or suspicious wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio. This could indicate that the casas de cambio are involved in layering and integration stages of money laundering, where they are moving the illicit funds across borders and disguising their origin and ownership. The financial institution should monitor and document these wire transfers and report them to the authorities if necessary. Option B is not a relevant step to trace funds through the bank, as it does not provide any information about the source, destination, or purpose of the funds. A decrease in the sale of large denomination U.S. bank notes to casas de cambio by the bank could be due to various factors, such as market demand, exchange rates, or regulatory changes, and does not necessarily indicate money laundering activity. Option C is also not a relevant step to trace funds through the bank, as it does not indicate any connection to the suspected money laundering scheme. Deposits by casas de cambio that include third-party items, such as sequentially numbered monetary instruments, could be legitimate transactions that are part of the normal business operations of the casas de cambio. Unless there is evidence that these deposits are related to the sale of large denomination U.S. bank notes or the Mexican syndicate, they are not useful for tracing the funds. References: ACAMS Study Guide 6th Edition, Chapter 2, page 38 Combating Money Laundering and Other Forms of Illicit Finance Sting Operation Snares Casa de Cambio for Allegedly Laundering Millions Through U.S. Banks

• Question 215:

  When a government imposes economic sanctions on a target, the purpose is to:

  A. Indicate that the use of military force is likely unless the target complies with the government's interests.
  B. Encourage non-governmental organizations (NGOs) to increase the provision of humanitarian and charitable aid to the target.
  C. Protect the rights of the citizens of the target country against their own government and improve financial stability in the region.
  D. Alter the behavior of the state or non-state target that threatens the interests of that government or violates international norms.
  D. Alter the behavior of the state or non-state target that threatens the interests of that government or violates international norms.

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  Economic sanctions are used as a non-military tool to enforce foreign policy and national security objectives . Option D (Correct): Sanctions aim to change the behavior of entities engaged in money laundering, terrorist financing, or other illicit activities . Option A (Incorrect): Sanctions do not necessarily indicate military action . Option B (Incorrect): NGOs may be exempt from sanctions , but this is not their primary purpose. Option C (Incorrect): While human rights concerns can lead to sanctions, they are primarily imposed to change behavior

• Question 216:

  Which is a valid extraterritorial effect of the USA PATRIOT Act?

  A. Foreign branches of US banks can maintain correspondent accounts with banks that do not have a physical presence in any country.
  B. Financial institutions are allowed to specifically direct client transactions that move their funds into, out of, or through an internal bank concentration account ^
  C. Broker-dealers cannot have correspondent accounts with a foreign bank that does not have a physical presence in any country.
  D. Any deposits into foreign banks are not considered to have been deposited into any interbank account the foreign bank may have in the US.
  C. Broker-dealers cannot have correspondent accounts with a foreign bank that does not have a physical presence in any country.

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  Broker-dealers cannot have correspondent accounts with a foreign bank that does not have a physical presence in any country. The USA PATRIOT Act has an extraterritorial effect in that it prohibits broker- dealers from having correspondent accounts with foreign banks that do not have a physical presence in any country. This rule is designed to help prevent money laundering and terrorist financing by making it more difficult for funds to be moved to or through jurisdictions with less stringent anti-money laundering laws.

• Question 217:

  An anti-money laundering specialist has just developed and implemented an anti-money laundering program. Which of the following is the best resource to evaluate the effectiveness of the program?

  A. the regulatory authorities
  B. a member of senior management
  C. the anti-money laundering specialist
  D. a qualified independent party/auditor
  D. a qualified independent party/auditor

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  According to the Anti-Money Laundering Specialist (the 6th edition) study guide, an effective anti-money laundering program should be subject to periodic independent testing by a qualified party, such as an internal or external auditor, a consultant, or a compliance professional1. This ensures that the program is compliant with the applicable laws and regulations, and that it meets the standards of sound risk management and internal controls2. The regulatory authorities, a member of senior management, or the anti-money laundering specialist may not have the necessary expertise, objectivity, or independence to conduct a thorough and unbiased evaluation of the program. References: 1: CAMS Study Guide, 6th Edition, Chapter 2, Section 2.3, page 51 2: CAMS Study Guide, 6th Edition, Chapter 2, Section 2.4, page 52

• Question 218:

  When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do?

  A. It should turn over the documents that were previously collected to support the STR
  B. It should request a written subpoena or court order before turning over any documents
  C. It should have its outside counsel review the request and the documents before doing anything
  D. It should politely decline to provide the requested documents until the law enforcement agency can explain the nature and purpose of its inquiry
  A. It should turn over the documents that were previously collected to support the STR

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  According to the BSA/AML Manual1, one purpose of filing SARs is to identify violations or potential violations of law to the appropriate law enforcement authorities for criminal investigation. Therefore, when an institution receives a document request from law enforcement with regard to an STR that the institution has filed, it should cooperate and provide the documents that were previously collected to support the STR. This will help the law enforcement agency to conduct its investigation and follow up on the suspicious activity reported by the institution. The institution should also maintain the confidentiality of the STR and the document request, and avoid tipping off the customer or any other person involved in the suspicious activity.

• Question 219:

  Law enforcement is conducting an investigation of a financial institution (FI) and has submitted an overly broad and unduly intrusive request. Which is a Fl's most appropriate response?

  A. Ignore the request due to the unacceptable volume of information contained within.
  B. Contest the request with the company's board of directors and key senior management.
  C. Delay a response until all documents can be gathered regardless of the duration.
  D. Narrow the request through a prompt response to the law enforcement agency.
  D. Narrow the request through a prompt response to the law enforcement agency.

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  Financial institutions (FIs) are required to cooperate with law enforcement agencies (LEAs) in their investigations of money laundering, terrorist financing, and other financial crimes. However, sometimes LEAs may submit requests for information or documents that are overly broad, unduly intrusive, or unreasonable in scope or volume. Such requests may pose challenges or risks for FIs, such as violating customer privacy, compromising data security, disrupting business operations, or incurring excessive costs. The most appropriate response for an FI in such a situation is to narrow the request through a prompt response to the LEA. This means that the FI should communicate with the LEA as soon as possible to clarify the purpose, scope, and relevance of the request, and to negotiate a more reasonable and proportionate request that meets the LEA's needs and the FI's capabilities. The FI should also explain the potential difficulties or consequences of complying with the original request, and propose alternative or additional sources of information that may be more useful or accessible. The FI should document the communication and the agreed terms of the request, and comply with the request in a timely and accurate manner. By narrowing the request through a prompt response, the FI can demonstrate its good faith and willingness to cooperate with the LEA, while also protecting its own interests and obligations. This can help avoid or resolve any conflicts or misunderstandings between the FI and the LEA, and facilitate a more efficient and effective investigation.

• Question 220:

  Which of the following activities are considered money laundering red flags when reviewing business operations of a money services business (MSB) ? (Select Two.)

  A. A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under the reporting threshold.
  B. Cash-intensive businesses, such as convenience stores or restaurants, making large cash deposits .
  C. A customer completing frequent small-dollar international money transfers to their native country.
  D. A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.
  E. A customer using multiple accounts under different names to conduct transactions.
  D. A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.
  E. A customer using multiple accounts under different names to conduct transactions.

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  MSBs are high-risk for financial crime , requiring strict AML controls . Option D (Correct): Hesitancy to provide beneficiary information is a strong indicator of illicit financial activity . Option E (Correct): Using multiple accounts under different names is a known money laundering technique . Option A (Incorrect): Currency exchange is common in MSBs , though additional factors must be assessed . Option B (Incorrect): Large cash deposits are normal for cash-based businesses , but need further scrutiny . Option C (Incorrect): Frequent small remittances are normal, unless linked to structuring or smurfing .