ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 231:

  Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

  A. Issue country-specific Mutual Evaluation reports
  B. Address AML/CFT technical assistance of individual members
  C. Identify jurisdictions with weak AML/CFT regimes
  D. Establish AML/CFT standards and typologies
  E. Protect the reputation and standing of FATF
  A. Issue country-specific Mutual Evaluation reports
  C. Identify jurisdictions with weak AML/CFT regimes

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  According to the Anti-Money Laundering Specialist (the 6th edition) resources, FSRBs are regional organizations that help the FATF implement its global AML/CFT policy and standards in over 200 affiliated countries1. FSRBs have their own high-level principles and objectives that govern their relationship with the FATF and their members2. Among these principles and objectives, two that should be included in a FSRB update are: Issue country-specific Mutual Evaluation reports. This is the process by which FSRBs assess the compliance and effectiveness of their members' AML/CFT systems, based on the FATF standards and methodology3. Mutual Evaluation reports provide an in-depth analysis of the strengths and weaknesses of each jurisdiction, as well as recommendations for improvement4. Identify jurisdictions with weak AML/CFT regimes. This is the process by which FSRBs, in coordination with the FATF, monitor and publicly list the countries that pose a risk to the international financial system due to their strategic deficiencies in AML/CFT. This process aims to encourage and assist these jurisdictions to address their gaps and enhance their cooperation with the global network. The other three options are incorrect because: Address AML/CFT technical assistance of individual members is not a principle that should be included in a FSRB update, as it is not a core function of FSRBs. FSRBs may facilitate or coordinate technical assistance, but they are not the primary providers or funders of such assistance. Establish AML/CFT standards and typologies is not a principle that should be included in a FSRB update, as it is not a role of FSRBs. FSRBs are expected to adopt and implement the FATF standards, not to create their own. Typologies are the methods and trends of money laundering and terrorist financing, which are identified and analyzed by the FATF and FSRBs through research and workshops. Protect the reputation and standing of FATF is not a principle that should be included in a FSRB update, as it is not a responsibility of FSRBs. FSRBs are autonomous and independent organizations that have their own governance and accountability mechanisms. FSRBs are expected to cooperate and coordinate with the FATF, but not to act as its agents or representatives. References: 1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 64 2: FATF, High-Level Principles for the Relationship between the FATF and the FATF-Style Regional Bodies, February 2019, 3 3: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 65 4: FATF, FATF Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems, February 2013 (updated October 2019), [12] : ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 66 : FATF, High-Risk and Other Monitored Jurisdictions, 4 : FATF, High-Level Principles for the Relationship between the FATF and the FATF-Style Regional Bodies, February 2019, 3, p. 4 : FATF, High-Level Principles for the Relationship between the FATF and the FATF-Style Regional Bodies, February 2019, 3, p. 2 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 67 : FATF, High-Level Principles for the Relationship between the FATF and the FATF- Style Regional Bodies, February 2019, 3, p. 3 : FATF, High-Level Principles for the Relationship between the FATF and the FATF-Style Regional Bodies, February 2019, 3, p. 5 : FATF, FATF Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems, February 2013 (updated October 2019), [12], p. 9 : FATF, High-Risk and Other Monitored Jurisdictions, 4, p. 1 Reference: https://www.fatf-gafi.org/ media/fatf/ documents/High-Level%20Principles%20and% 20Objectives%20for%20FATF%20and%20FSRBs.pdf

• Question 232:

  Which persons must always comply with all Office of Foreign Assets Control (OFAC) regulations ? (Select Three.)

  A. U.S. citizens regardless of location.
  B. Non-U.S. financial institutions that offer accounts in USD regardless of location.
  C. Merchants that offer U.S.-origin goods for sale regardless of location.
  D. U.S.-incorporated entities and their foreign branches.
  E. Permanent U.S. resident aliens regardless of location.
  A. U.S. citizens regardless of location.
  D. U.S.-incorporated entities and their foreign branches.
  E. Permanent U.S. resident aliens regardless of location.

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  OFAC sanctions apply extraterritorially to ensure U.S. financial and economic interests are protected . Option A (Correct): U.S. citizens must comply with OFAC sanctions regardless of where they are located . Option D (Correct): U.S.-incorporated entities and their foreign branches are required to follow OFAC restrictions . Option E (Correct): Permanent U.S. resident aliens are subject to OFAC compliance even outside the U.S. Option B (Incorrect): Non-U.S. financial institutions are not directly subject to OFAC unless they have a U.S. presence or deal in USD transactions . Option C (Incorrect): Selling U.S.-origin goods does not automatically subject merchants to OFAC laws , unless they are in a sanctioned jurisdiction .

• Question 233:

  Which requirement is included in the Fourth European Union Directive on money laundering?

  A. It requires obliged entities to consider politically exposed persons as high risk for life
  B. It requires obliged entities to conduct enhanced due diligence on all prepaid card holders
  C. It requires member countries to maintain registries of the beneficial owners of legal entities
  D. It requires member states to enact economic sanctions against countries that do not cooperate with Financial Action Task Force recommendations
  C. It requires member countries to maintain registries of the beneficial owners of legal entities

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  The Fourth European Union Directive on money laundering (AMLD4) requires member countries to maintain registries of the beneficial owners of legal entities, such as companies, trusts, foundations, etc. This is to ensure that the true identity and ownership of the customers and the natural persons on whose behalf transactions are conducted are known to the obliged entities, such as banks, lawyers, accountants, etc., and to the competent authorities, such as regulators, supervisors, or law enforcement12. This requirement aims to prevent the misuse of legal entities for money laundering or terrorist financing purposes, and to enhance transparency and access to beneficial ownership information34. References: 1: AMLD4, Article 30, 5; 2: AMLD4, Recital 25, 5; 3: AMLD4, Recital 26, 5; 4: AMLD4, Recital 27, 5. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32018L0843andfrom=EN

• Question 234:

  The AML compliance officer of a financial institution (Fl) has been advised that the institution is being investigated by the country's financial intelligence unit (FIU). What should the AML compliance officer do? (Select Two.)

  A. inform senior leadership and the board of the investigation.
  B. Share investigation results with other FIs to help them prepare.
  C. Monitor the progress of the investigation by keeping clear records.
  D. Send an informative communication to all employees about the investigation.
  E. Provide all information to the FIU as soon as possible to avoid delays.
  A. inform senior leadership and the board of the investigation.
  C. Monitor the progress of the investigation by keeping clear records.

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  According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, the AML compliance officer should inform senior leadership and the board of the investigation (page 124) and monitor the progress of the investigation by keeping clear records (page 127). Additionally, the AML compliance officer should provide all information to the FIU as soon as possible to avoid delays (page 126). According to the CAMS Manual, when a financial institution is being investigated by the financial intelligence unit (FIU), the AML compliance officer should inform senior leadership and the board of the investigation and monitor the progress of the investigation by keeping clear records. The manual states: "The AML compliance officer should inform senior leadership and the board of any investigations and then monitor the progress of the investigation by keeping clear records of what has been requested and submitted, deadlines and extensions granted, and any findings or reports received. This will allow the financial institution to respond effectively and efficiently to the investigation and take appropriate action if necessary." (CAMS Manual, Section 7.4.1 - Financial Intelligence Units, p. 366)

• Question 235:

  A customer opens a corporate account with a broker-dealer on behalf of several beneficial owners, with a stated long-term investment goal. The customer deposits $25.5 million into the account and three days later transfers $5 million to an

  overseas bank. Shortly thereafter, the customer begins making numerous purchases of pesos. The compliance officer receives a query regarding the movement of funds. Within a month of account opening, the customer depletes the

  account.

  Which two red flags should prompt the firm's compliance officer to take action? (Choose two.)

  A. The new account deposit is $25.5 million
  B. A corporate account is opened on behalf of several beneficial owners
  C. The compliance officer receives the query regarding the movement of funds
  D. The customer's stated investment goal is not reflective of account activity
  B. A corporate account is opened on behalf of several beneficial owners
  D. The customer's stated investment goal is not reflective of account activity

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  A corporate account opened on behalf of several beneficial owners is a red flag because it may indicate an attempt to conceal the identity or source of funds of the ultimate beneficiaries. The customer's stated investment goal of long-term investment is not reflective of the account activity, which involves frequent and large transfers, currency exchanges, and account depletion within a short period of time. This discrepancy may suggest that the customer is using the account for money laundering or other illicit purposes.

• Question 236:

  A legal instrument executed between two nations that 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.
  E. Request for Urgent Information.
  D. Mutual Legal Assistance Treaty.

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  A Mutual Legal Assistance Treaty (MLAT) is a formal agreement between two or more countries that facilitates cooperation in legal and law enforcement matters , including AML investigations . Option D (Correct): MLATs allow governments to share financial intelligence, request legal assistance, and conduct joint investigations. Option A (Incorrect): A Memorandum of Agreement (MOA) is typically a non-binding contract used for general business or governmental cooperation. Option B (Incorrect): A Declaration of Understanding is an informal agreement and does not provide a legal framework for law enforcement cooperation. Option C (Incorrect): A Memorandum of Understanding (MOU) is often used for informal cooperation but lacks the legal enforceability of an MLAT. Option E (Incorrect): A Request for Urgent Information is not a recognized international legal instrument. Best Practices for Cross-Border AML Cooperation: Use MLATs to request access to financial records in foreign jurisdictions. Collaborate with Financial Intelligence Units (FIUs) via the Egmont Group. Leverage FATF's International Cooperation Review Group (ICRG) for guidance.

• Question 237:

  Which activity is most likely to facilitate money laundering through on-line banking systems with inadequate controls?

  A. Conducting a large volume of transactions
  B. Providing continuous worldwide access
  C. Conducting anonymous transactions
  D. Conducting large value transactions
  C. Conducting anonymous transactions

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  Conducting anonymous transactions is the most likely activity to facilitate money laundering through online banking systems with inadequate controls. Anonymous transactions allow money launderers to hide their identity, source and destination of funds, and the purpose of their transactions from the authorities and the financial institutions. Online banking systems that do not have proper KYC, customer due diligence, and transaction monitoring controls are vulnerable to being exploited by money launderers who can use various techniques, such as encryption, proxy servers, virtual currencies, prepaid cards, and online gambling, to conduct anonymous transactions123. References: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 40-41, 43-44 ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.4, Money Laundering Using New Payment Methods 1, Fighting money laundering in the age of online banking, virtual currencies and internet gambling | ERA Forum 2, Financial crime risk management in digital payments | McKinsey 3, The Relationship Between Digital Banking and Financial Crime

• Question 238:

  In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

  A. Kidnapping
  B. Offenses involving dishonesty
  C. Driving while under the influence
  D. Protests of government action
  B. Offenses involving dishonesty

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  http://www.capitol.hawaii.gov/hrscurrent/vol07_ch0346-0398/HRS0378/HRS_0378-0003.htm (See 9th point)

• Question 239:

  What is true regarding disclosure to a law enforcement agency by a financial institution of the supporting documentation for a suspicious transaction report?

  A. Documentation must be provided as quickly as possible using email
  B. The financial institution may notify the account holder of the request
  C. Confirm that the request originated from a representative of the law enforcement agency
  D. A copy of all the documentation released must also be provided to the account holder's attorney
  C. Confirm that the request originated from a representative of the law enforcement agency

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  Before disclosing any supporting documentation for a suspicious transaction report (STR) to a law enforcement agency, the financial institution should confirm that the request is legitimate and authorized by verifying the identity and credentials of the requester1. This is to prevent unauthorized access or misuse of the confidential information by impostors or fraudsters. The other options are not true, as they may either compromise the security, integrity, or timeliness of the disclosure, or violate the confidentiality or privacy rights of the customer. References: ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 4, p. 117 FATF Guidance: The Role of Hawala and Other Similar Service Providers in Money Laundering and Terrorist Financing, October 20132, p. 20 Basel Committee on Banking Supervision, Sound management of risks related to money laundering and financing of terrorism, June 20173, p. 11 Reference: https://www.sec.gov/about/offices/ocie/aml2007/fin-2007-g003.pdf

• Question 240:

  The law enforcement agency (LEA) of a foreign jurisdiction contacts a financial institution (Fl) regarding one of the Fl's clients. The LEA advises that the client is currently wanted for prosecution as a result of a series of human trafficking charges. What should the Fl do? (Select Two.)

  A. Review the client's activity, determine if suspicious activity exists, and report accordingly.
  B. Advise the LEA that the government needs to be contacted for extradition.
  C. Comply immediately with the foreign jurisdiction and turn over all client information.
  D. Inform local LEA and regulator of the request for awareness.
  E. Close the clients accounts immediately to avoid any undue risk.
  A. Review the client's activity, determine if suspicious activity exists, and report accordingly.
  D. Inform local LEA and regulator of the request for awareness.

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  According to the Certified Anti-Money Laundering Specialist (the 6th edition), the financial institution (Fl) should take the following actions: A. Review the client's activity, determine if suspicious activity exists, and report accordingly. The Fl should assess the risk of the situation and determine if there is any suspicious activity that needs to be reported to the appropriate authorities. This would involve conducting a review of the client's account activity and transactions to determine if there are any indicators of money laundering or terrorist financing. D. Inform local LEA and regulator of the request for awareness. The Fl should inform the local law enforcement agency and regulator of the request from the foreign jurisdiction to raise awareness of the situation and determine if any further actions need to be taken.