ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 241:

  How should a financial institution respond to a verbal request from a law enforcement agency to keep an account open to assist in an investigation?

  A. Agree to keep the account open
  B. Request a subpoena to maintain the account
  C. Request a letter on the agency's letterhead
  D. Request a search warrant from the local court
  C. Request a letter on the agency's letterhead

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  According to the ACAMS study guide, one of the best practices for dealing with law enforcement inquiries is to verify the identity and authority of the law enforcement officer before providing any information (p. 224). This is to ensure that the inquiry is legitimate and not a phishing attempt or a breach of confidentiality. The compliance officer should also document the inquiry and the information provided, and consult with legal counsel if necessary. The other options are not appropriate, as they may either violate the law, compromise the investigation, or create unnecessary work. References: ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS. What Is An AML Officer1 Bank Secrecy Act/Anti-Money Laundering: Requests by Law Enforcement for Financial Institutions to Maintain Accounts 2 Reference: http://files.acams.org/pdfs/English_Study_Guide/Chapter_5.pdf (12)

• Question 242:

  An AML compliance officer receives an independent audit report with a number of findings . An appropriate response to the report would include:

  A. Reperforming the testing for the controls mentioned in the findings to confirm the results of the audit.
  B. Assigning responsibility for reviewing the action plan to the board of directors.
  C. Drafting detailed action plans for the audit team to execute to close the findings.
  D. Defining remedial actions based on the findings' root cause analysis.
  D. Defining remedial actions based on the findings' root cause analysis.

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  AML audit findings must be analyzed and addressed through remedial actions based on root cause analysis . Option D (Correct): Root cause analysis helps develop effective corrective measures to prevent recurring AML deficiencies. Option A (Incorrect): Retesting controls may be useful, but addressing deficiencies is more critical. Option B (Incorrect): While the board oversees compliance, the responsibility for implementing fixes lies with AML teams. Option C (Incorrect): Audit teams provide findings but do not execute corrective actions. Best Practices for Addressing AML Audit Findings: Identify the root cause of AML control failures. Develop risk-based remediation plans. Implement and monitor corrective actions.

• Question 243:

  What are some red flags pertaining to potentially suspicious transactions by a customer? Choose 3 answers

  A. Having multiple addresses and/or moving frequently
  B. Having a commercialaccount with cash deposits
  C. Have a common address with several other bank clients
  D. Having multiple individuals use the ATM card connected with the account m different cities
  A. Having multiple addresses and/or moving frequently
  C. Have a common address with several other bank clients
  D. Having multiple individuals use the ATM card connected with the account m different cities

• Question 244:

  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 FinCEN CDD Final Rule
  B. The 6th EU AML Directive
  C. Regulations of the OFAC, US Department of Treasury
  D. The USA PATRIOT Act
  D. The USA PATRIOT Act

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  The USA PATRIOT Act is a comprehensive legislation that was enacted in 2001 to enhance the powers and tools of the US authorities to combat money laundering, terrorist financing, and other threats to the national security and the integrity of the financial system. The USA PATRIOT Act contains several provisions that affect the relationship between US banks and foreign banks that maintain correspondent accounts in the US. One of these provisions is Section 319, which allows the US authorities to seize the funds of a foreign bank held with a US bank, if the foreign bank refuses to comply with a subpoena or a request for records related to the correspondent account. This provision is intended to prevent foreign banks from using their correspondent accounts in the US to facilitate transactions involving tainted funds, such as proceeds of crime, funds intended to support terrorism, or funds subject to sanctions or asset freezing orders. Section 319 also requires US banks to maintain records of the owners and agents of foreign banks that have correspondent accounts with them, and to terminate such accounts if requested by the US authorities. Therefore, if a foreign bank maintains a correspondent account in the US, and the US authorities find out that the account has been used to facilitate a transaction involving tainted funds, the US authorities can seize the funds of the foreign bank held with the US bank, under the authority of the USA PATRIOT Act. References: CAMS Study Guide - 6th Edition, Chapter 1, Section 1.2, page 10 USA PATRIOT Act, Section 319, page 55-57 The USA PATRIOT Act: A Legal Analysis, Section III, page 9-10 [The USA PATRI Reference: https://www.fincen.gov/fact-sheet-section-312-usa-patriot-act-final-regulation-and-notice- proposed-rulemaking

• Question 245:

  A bank maintains a relationship with a customer who owns a small bakery business. Which customer action indicates potential money laundering?

  A. The customer continually makes regular cash deposits
  B. The customer has multiple bank accounts at several locations
  C. The customer purchased property insurance that is twice the value of the business
  D. The customer recently wired a large amount to a foreign jurisdiction where family is located
  C. The customer purchased property insurance that is twice the value of the business

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  The customer purchased property insurance that is twice the value of the business indicates potential money laundering. This could be a sign of insurance fraud, which is one of the predicate offenses for money laundering. Insurance fraud involves making false or exaggerated claims to obtain illegitimate financial benefits from an insurance company. The customer may have purchased an excessive amount of insurance to cover the value of the property and then intentionally damage or destroy it to claim the insurance payout. The customer may then use the insurance money to launder the proceeds of other criminal activities.

• Question 246:

  A new accounts representative recently opened an account for individual whose stated employment is tutoring students. Which customer action indicates possible money laundering?

  A. Continually making weekly small cash deposits
  B. Periodically initiating wire transfers to another account owned by a relative
  C. Transferring all funds to another bank on the same day of large cash deposits
  D. Opening a savings account and makes frequent transfers from the checking account
  C. Transferring all funds to another bank on the same day of large cash deposits

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  This customer action indicates possible money laundering because it could be a sign of layering, which is the second stage of the money laundering process. Layering involves moving the illicit funds around to create distance and confusion between the source and the destination of the money. Transferring all funds to another bank on the same day of large cash deposits could be an attempt to avoid detection by the bank's transaction monitoring system or by the authorities. It could also be a way to break the audit trail and obscure the origin of the funds. The other customer actions are not necessarily indicative of money laundering, although they could raise some red flags depending on the context and the customer profile. Continually making weekly small cash deposits could be a sign of structuring, which is a technique to avoid reporting requirements by depositing amounts below the threshold. However, this could also be a legitimate behavior for a tutor who receives cash payments from students. Periodically initiating wire transfers to another account owned by a relative could be a sign of funneling, which is a technique to move funds between accounts that are not related to the business or personal activities of the customer. However, this could also be a legitimate behavior for a tutor who supports their family members financially. Opening a savings account and making frequent transfers from the checking account could be a sign of commingling, which is a technique to mix illicit funds with legitimate funds from a legal source. However, this could also be a legitimate behavior for a tutor who wants to save money for future expenses.

• Question 247:

  What action should a bank CEO's assistant take when the bank CEO expenses large sums of money to a charitable organization run by the bank CEO's direct family member?

  A. Report the actions to the Executive Board of the bank.
  B. Meet with the bank CEO to learn why the donations are being made.
  C. Investigate the charitable organization's relationship with the bank CEO.
  D. Submit the concern anonymously to the bank's internal Compliance Hotline.
  D. Submit the concern anonymously to the bank's internal Compliance Hotline.

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  Submitting the concern anonymously to the bank's internal Compliance Hotline is the most appropriate action that a bank CEO's assistant should take when the bank CEO expenses large sums of money to a charitable organization run by the bank CEO's direct family member. This is because this action would allow the assistant to report a potential case of fraud, conflict of interest, or misuse of funds without fear of retaliation or reprisal from the bank CEO. The Compliance Hotline is a confidential and secure channel for employees to raise any concerns or suspicions about unethical or illegal activities within the bank. The Compliance Hotline would then forward the concern to the relevant authorities or departments for further investigation and action. References: The main references for this question are the following sources: The document titled "Anti-Fraud Policy" published by the World Bank Group. You can access it by clicking here. This document states that "The World Bank Group has established a Compliance Hotline to receive reports of suspected fraud or corruption in World Bank Group-financed projects or activities, or in the World Bank Group's corporate procurement or administrative activities. The Compliance Hotline is available to all staff and external parties, such as contractors, consultants, beneficiaries of World Bank Group-financed projects, and the general public.

• Question 248:

  What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?

  A. Verify the officer's identification and ask for the law enforcement request to be served when the Chief Executive Officer is available to sign for it.
  B. Designate a person responsible for the internal investigation in preparation of documents for the request. Ask for an extension to review the Fl's privacy policy and confidentiality policy before providing any
  C. information under the law enforcement request.
  D. Keep senior management informed at all times to strategically organize a defense to terminate the law enforcement request.
  B. Designate a person responsible for the internal investigation in preparation of documents for the request. Ask for an extension to review the Fl's privacy policy and confidentiality policy before providing any

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  According to the CAMS Study Guide (the 6th edition), page 184, when an FI receives a formal law enforcement request to produce documents, such as a subpoena, a search warrant, or a court order, it should designate a person responsible for the internal investigation in preparation of documents for the request. This person should be familiar with the FI's policies and procedures, the applicable laws and regulations, and the nature and scope of the request. The designated person should also coordinate with the FI's legal counsel, compliance officer, and senior management, and ensure that the FI preserves the confidentiality and integrity of the documents and the investigation. References: CAMS Study Guide (the 6th edition), page 1841 CAMS Certification Video Training Course, Module 4, Lesson 22

• Question 249:

  The goal of the Egmont Group of Financial Intelligence Units (FIUs) is to provide a forum for FIUs to: (Select Three.)

  A. Improve global cooperation between FIUs.
  B. Sign memoranda of cooperation that recognize and allow room for case-by-case solutions to specific problems.
  C. Securely share sensitive information in the fight against money laundering and the financing of terrorism.
  D. Propose legislation to combat financial crime, including money laundering and the financing of terrorism.
  E. Establish an environment to foster trust among countries.
  A. Improve global cooperation between FIUs.
  C. Securely share sensitive information in the fight against money laundering and the financing of terrorism.
  E. Establish an environment to foster trust among countries.

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  The Egmont Group is an international network of Financial Intelligence Units (FIUs) that enhances cooperation and information sharing to combat financial crime . Option A (Correct): The Egmont Group improves global cooperation by enabling FIUs to exchange financial intelligence securely . Option C (Correct): The group facilitates secure communication channels for sharing money laundering and terrorist financing intelligence . Option E (Correct): The Egmont Group fosters trust between FIUs , allowing them to work collaboratively on cross-border investigations . Why Other Options Are Incorrect: Option B (Incorrect): The Egmont Group does not negotiate case-by-case memoranda of understanding (MoUs) for individual cases. Option D (Incorrect): The Egmont Group does not draft AML legislation ; it provides guidance but does not have regulatory authority . Key Functions of the Egmont Group: Facilitating cross-border cooperation among FIUs. Providing a secure network (Egmont Secure Web) for intelligence sharing. Developing best practices for AML/CFT investigations.

• Question 250:

  Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a

  known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto

  repair shop is popular in the community and is a wellknown philanthropist.

  To whom should the investigator escalate these concerns?

  A. Audit committee
  B. Chairman of the Board
  C. The owner of the auto repair shop
  D. The bank anti-money laundering officer
  D. The bank anti-money laundering officer

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  The investigator should escalate these concerns to the bank anti-money laundering officer, who is responsible for overseeing the implementation and effectiveness of the bank's AML/CFT policies and procedures, as well as ensuring compliance with relevant laws and regulations. The bank anti-money laundering officer can then decide on the appropriate course of action, such as conducting further investigation, reporting to the regulators, or terminating the relationship with the customer. The other options are not suitable for escalating these concerns, as they may not have the authority, expertise, or responsibility to handle such matters. References: ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 4, pp. 113-114 FATF Guidance: The Role of Hawala and Other Similar Service Providers in Money Laundering and Terrorist Financing, October 20131, p. 19 Basel Committee on Banking Supervision, Sound management of risks related to money laundering and financing of terrorism, June 20172, p. 10