ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 221:

  According to the Basel Committee, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to:

  A. address KYC deficiencies in account opening procedures.
  B. ensure policies and procedures are reviewed every three months.
  C. address structure changes strictly related to new employees.
  D. address variations in risk among each line of business within the organization.
  D. address variations in risk among each line of business within the organization.

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  The Basel Committee on Banking Supervision (BCBS) is an international body that sets standards and guidelines for the prudential regulation of banks. One of its key publications is the Customer Due Diligence for Banks, which outlines the essential elements of Know Your Customer (KYC) standards for banks. According to this document, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to address variations in risk among each line of business within the organization. This means that banks should adopt a risk-based approach to KYC, taking into account the different types, levels, and sources of risk associated with different customers, products, services, transactions, and delivery channels. By doing so, banks can allocate their resources more efficiently and effectively, and mitigate the potential for money laundering, terrorist financing, and other financial crimes.

• Question 222:

  An AML compliance officer receives notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council. Which would be the most appropriate step to take?

  A. Notify the Board of Directors
  B. Update the monitoring software containing sanctioned persons
  C. Inform the customers that their funds will be frozen
  D. Update training information to include the latest names
  B. Update the monitoring software containing sanctioned persons

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  The most appropriate step for an AML compliance officer to take upon receiving notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council is to update the monitoring software containing sanctioned persons. This is because the AML compliance officer is responsible for ensuring that the financial institution does not engage in any transactions or business relationships with individuals or entities that are subject to sanctions, as this could expose the institution to legal, regulatory, and reputational risks. By updating the monitoring software, the AML compliance officer can ensure that the institution's screening and filtering systems are up to date and can flag any potential matches or hits with the sanctioned persons. This would also enable the AML compliance officer to take appropriate actions, such as blocking or freezing funds, reporting to the relevant authorities, and conducting further due diligence, if necessary. References: Anti-Money Laundering (AML) | FINRA.org, Overview. AML Compliance Officer and Their Responsibilities - Tookitaki, Role and Responsibilities of an AML Compliance Officer. What is an AML Compliance Officer? - Sanction Scanner, Communicate openly with the company's internal management team. Guidance on Existing AML Program Rule Compliance ... - FinCEN.gov, Financial Institutions Toll- Free Hotline.

• Question 223:

  A financial institution is designing an Enterprise-Wide Risk Assessment (EWRA) .

  According to the Wolfsberg Group's risk-based approach to AML , an effective EWRA should:

  A. Use a framework provided by a third-party vendor and used by other FIs in the jurisdiction.
  B. Include appropriate measures and controls to mitigate money laundering risks stemming from higher- risk customers, products, and geographies.
  C. Focus on understanding the risks presented by new clients within the assessment period and the controls to mitigate associated money laundering risks.
  D. Focus on the inherent risk in the FI's product and service offerings and the controls to mitigate potential money laundering risks.
  B. Include appropriate measures and controls to mitigate money laundering risks stemming from higher- risk customers, products, and geographies.

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  An Enterprise-Wide Risk Assessment (EWRA) helps financial institutions identify and mitigate money laundering risks . Option B (Correct): Wolfsberg Group and FATF emphasize that an EWRA should focus on higher- risk customers, products, and geographies , ensuring appropriate controls are in place. Option A (Incorrect): Institutions should not blindly adopt third-party frameworks without customizing them to their specific risk exposure. Option C (Incorrect): While new clients are important, an EWRA must assess risks across all customers and transactions . Option D (Incorrect): EWRA must address residual risk , not just inherent risk. Effective mitigation strategies are essential.

• Question 224:

  A legal instrument that is executed between two nations and governs cross-border information sharing is known as a:

  A. Memorandum of agreement.
  B. Declaration of understanding.
  C. Memorandum of understanding.
  D. Mutual legal assistance treaty.
  D. Mutual legal assistance treaty.

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  Mutual Legal Assistance Treaties (MLATs) are formal agreements for cross-border law enforcement cooperation . Option D (Correct): MLATs allow countries to exchange information, conduct joint investigations, and provide legal assistance . Option A (Incorrect): Memoranda of Agreement (MOA) are typically non-binding agreements between private entities. Option B (Incorrect): Declarations of understanding are informal statements, not legally binding treaties. Option C (Incorrect): Memoranda of Understanding (MOUs) govern general cooperation , not formal legal assistance .

• Question 225:

  Which principles of the Egmont Group of Financial Intelligence Units (Fills) are aimed at maximizing cooperation between FlUs to more effectively combat money laundering? (Select Two.)

  A. Eliminating spontaneous information sharing between FlUs to reduce the burden of excess investigative work.
  B. Information exchange should take place informally, without too many formal prerequisites.
  C. FIU cooperation should always be channeled through designated intermediaries.
  D. Formal Egmont Group membership requirements ensure a high commitment of the eligible FlUs.
  E. It is within an FlU's authority to sign Memorandums of Understanding independently.
  B. Information exchange should take place informally, without too many formal prerequisites.
  E. It is within an FlU's authority to sign Memorandums of Understanding independently.

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  The principles of the Egmont Group of Financial Intelligence Units (FILLs) aimed at maximizing cooperation between FILLs to more effectively combat money laundering are [1]: B. Information exchange should take place informally, without too many formal prerequisites. (CAMS Manual, 6th Edition, Page 55) E. It is within an FlU's authority to sign Memorandums of Understanding independently. (CAMS Manual, 6th Edition, Page 56)

• Question 226:

  An anti-money laundering analyst is reviewing a new customer list to confirm potentially high risk customers have been identified and subject to enhanced due diligence. Which new customer warrants enhanced due diligence?

  A. A non-profit hospital
  B. A fundraising organization
  C. An employee benefit plan trust
  D. A medical practice limited partnership
  B. A fundraising organization

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  A fundraising organization is a type of non-profit organization that may be vulnerable to money laundering and terrorist financing risks, as they often operate in high-risk areas, deal with large amounts of cash, and have complex and opaque structures. Therefore, a fundraising organization warrants enhanced due diligence, which is a higher level of customer verification and monitoring that goes beyond the standard customer due diligence measures. Enhanced due diligence may include obtaining additional information on the source of funds, the purpose of the relationship, the beneficiaries, and the governance of the organization. References: ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 2: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Section 2.2: Customer Due Diligence, p. 33-34 Anti-money laundering ?a guide to customer due diligence Customer due diligence | The Law Society

• Question 227:

  What do the Financial Action Task Force (FATF) mutual evaluations of each member assess?

  A. The levels of implementation of the FATF Recommendations
  B. The member's ability to send a representative to the plenary sessions
  C. If the member has a large enough economy to maintain its membership
  D. If the member has made any suggestions for updates to the FATF Recommendations
  A. The levels of implementation of the FATF Recommendations

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  A compliance officer should consider the following three factors as part of the approach to implement an enterprise-wide anti-money laundering program for a bank that operates in multiple countries: The types of customers serviced by the bank: Different types of customers may pose different levels of money laundering risk, depending on their nature, source of funds, geographic location, transaction patterns, and other factors. A compliance officer should identify and assess the money laundering risk associated with each customer type and segment, and apply appropriate due diligence measures, monitoring systems, and risk mitigation strategies accordingly12. The extent of anti-money laundering regulations in the various countries: A compliance officer should be aware of the legal and regulatory requirements and expectations for anti-money laundering compliance in each country where the bank operates, and ensure that the bank's policies and procedures are consistent with them. A compliance officer should also monitor any changes or updates in the anti- money laundering laws and regulations in the various countries, and adjust the bank's program accordingly34. The anti-money laundering risk posed by the products and services offered by the bank: Different products and services may have different features and functionalities that could be exploited by money launderers, such as anonymity, cross-border transfers, cash transactions, complex structures, or new technologies. A compliance officer should evaluate the money laundering risk associated with each product and service offered by the bank, and implement appropriate controls, safeguards, and oversight mechanisms to prevent and detect money laundering activities5 . References: 1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 2: Risk Assessments 2: FATF, Guidance for a Risk-Based Approach: The Banking Sector 3: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) 4: Deloitte, AML Program Effectiveness Reform 5: ACAMS, CAMS Study Guide, 6th Edition, Chapter 4: AML Program Design [6]: OCC, Money Laundering: A Banker's Guide to Avoiding Problems Reference: https://www.fatf-gafi.org/publications/mutualevaluations/documents/more-about-mutual- evaluations.html

• Question 228:

  Which safeguard is in place for Financial Intelligence Units (FIUs) to share information securely according to Egmont?

  A. A computer with access to the Egmont Secure Web is accessible to all members of the FIU.
  B. Information sharing is conducted according to processes contained in Memoranda of Understanding.
  C. Intelligence is shared via messaging applications.
  D. Investigators are allowed to request information from a foreign FIU directly.
  A. A computer with access to the Egmont Secure Web is accessible to all members of the FIU.

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  According to the Egmont Group of Financial Intelligence Units Principles for Information Exchange Between Financial Intelligence Units, one of the channels for the exchange of information between FIUs is the Egmont Secure Web (ESW), which is a secure and encrypted communication system that allows FIUs to share information and expertise1. The ESW is accessible to all members of the FIU who have been authorized by the FIU head or his/her delegate1. The other options are not correct because: B. Information sharing is not always conducted according to processes contained in Memoranda of Understanding (MOUs). The Egmont Group encourages FIUs to exchange information regardless of the existence of an MOU1. C. Intelligence is not shared via messaging applications. This would not be a secure or reliable way of exchanging sensitive information. D. Investigators are not allowed to request information from a foreign FIU directly. Requests for information must be made through the FIU of the requesting country1. References: Egmont Group of Financial Intelligence Units Principles for Information Exchange Between Financial Intelligence Units The Egmont Group of Financial Intelligence Units | FinCEN.gov The Egmont Group of The Egmont Group of Financial Intelligence Units Reference: https://www.elibrary.imf.org/view/books/069/02365-9781589063495-en/ap01.xml

• Question 229:

  A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international banks located there. During on-boarding, the client's wealth was estimated at 7.52 million USD. Shortly thereafter, the client's father became president of Country B During a routine client review two years later, it was identified that the client's wealth had grown to 510 million USD. Which are two red flags that indicate money laundering or financial terrorism? (Select Two.)

  A. The substantial growth in wealth during a short period of time.
  B. The client is from a country known for corruption.
  C. The client is a family member of a politically exposed person from a country known for corruption.
  D. The holding company is in Country A with a bank account in one of the international banks.
  E. The clients account has not been reviewed for 2 years.
  A. The substantial growth in wealth during a short period of time.
  C. The client is a family member of a politically exposed person from a country known for corruption.

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  According to the Financial Action Task Force (FATF), substantial growth in wealth during a short period of time is a red flag for money laundering or terrorist financing. Additionally, when a client is a family member of a politically exposed person (PEP) from a country known for corruption, it raises concerns about the potential for corruption, bribery, or influence peddling. In this case, the client's father became the president of Country B, which makes him a PEP. Reference: Certified Anti-Money Laundering Specialist (CAMS) Study Guide, 6th Edition, page 185-186.

• Question 230:

  Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?

  A. Local privacy and data protection laws may prevent an affiliate from sharing information.
  B. Certain account documents may be stored only in local language which will prohibit a global assessment.
  C. The institution should consult with the customer and request permission to conduct a full investigation into all the accounts.
  D. Enterprise-wide compliance oversight rules issued in the global institution's headquarters country will override any local limitations in other countries.
  A. Local privacy and data protection laws may prevent an affiliate from sharing information.

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  A multinational institution may face challenges in conducting a full investigation of unusual activity across its foreign operations, due to the different legal and regulatory frameworks that apply in each jurisdiction. One of the main obstacles is the local privacy and data protection laws that may restrict the access, transfer, or disclosure of customer information, especially personal or sensitive data, to other entities within the same group or to external parties, such as law enforcement or regulators. Therefore, the institution should be aware of the local laws and regulations that govern the collection, processing, and sharing of customer data, and ensure compliance with them12. References: ACAMS Study Guide, 6th Edition, page 191 Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct? Learn more 1blob:https://www.bing.com/12e36647-a7b4-48a5-9dff-13e7aab69e80 quizlet.com2blob:https:// www.bing.com/2c9f865a-c41c-4acb-9e08-acb661cdbbe3 exam4training.com3blob:https://www.bing.com/2c9f865a-c41c-4acb-9e08-acb661cdbbe3 exam4training.com4blob:https://www.bing.com/12e36647-a7b4-48a5-9dff-13e7aab69e80 quizlet.com A multinational institution may face challenges in conducting a full investigation of unusual activity across its foreign operations, due to the different legal and regulatory frameworks that apply in each jurisdiction. One of the main obstacles is the local privacy and data protection laws that may restrict the access, transfer, or disclosure of customer information, especially personal or sensitive data, to other entities within the same group or to external parties, such as law enforcement or regulators. Therefore, the institution should be aware of the local laws and regulations that govern the collection, processing, and sharing of customer data, and ensure compliance with them12. References: ACAMS Study Guide, 6th Edition, page 191 Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?