ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 251:

  Which transaction should result in a suspicious activity report filing?

  A. A small business owner deposits checks totaling 9,950 USD on a daily basis without providing a legitimate purpose.
  B. A small business owner deposits 25.000 USD in cash proceeds with a business equipment bill of sale.
  C. A national food-chain restaurant makes multiple, anticipated cash transactions that are above the daily reporting threshold.
  D. A national food-chain restaurant with multiple cash transactions at various branch locations.
  A. A small business owner deposits checks totaling 9,950 USD on a daily basis without providing a legitimate purpose.

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  According to the Certified Anti-Money Laundering Specialist (the 6th edition), Section 2.2.5 Suspicious Activity Reporting (SAR) Requirements, a Suspicious Activity Report (SAR) filing is required when a financial institution is aware of, or suspects, a possible violation of law or regulation, or any other suspicious activity related to money laundering, terrorist financing, or other unlawful activity. In this case, Answer A would require a Suspicious Activity Report filing as the deposits are made on a daily basis without providing a legitimate purpose. According to the Financial Crimes Enforcement Network's (FinCEN) guidance, one example of a suspicious transaction is "frequent deposits of cash or monetary instruments in amounts under $10,000 to the same account, or a pattern of such deposits, unless the financial institution has a reasonable explanation for the pattern." (CAMS Manual, 6th Edition, Page 209)

• Question 252:

  A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at ?0 million, in the outskirts of London as an investment property. The clients are not willing to have their names provided to the bank. The clients want to purchase to be made in the names of three private companies for privacy reasons. The plan is to wire the funds into an account held in the name of another private company at a bank in London. Which red flag should stop the agent from discussing this potential purchase further?

  A. The clients are foreign
  B. The clients have the funds necessary to fund a ?0 million purchase
  C. The clients are not willing to have their names provided to the bank
  D. The clients want to purchase to be made in the names of the private companies
  C. The clients are not willing to have their names provided to the bank

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  The clients are not willing to have their names provided to the bank is a red flag that should stop the agent from discussing this potential purchase further, as this could indicate that the clients are trying to evade customer due diligence (CDD) or know your customer (KYC) requirements, or hide their beneficial ownership or source of funds. According to the U.K. Money Laundering Regulations 2017, real estate agents must conduct CDD on their customers and any beneficial owners, and verify their identity and address1. The U.K. also has a register of people with significant control (PSC) over companies, which requires companies to disclose their beneficial owners2. The use of private companies and wire transfers could also be a sign of layering, a money laundering technique that involves moving funds through multiple accounts or entities to obscure their origin3. References: 1: U.K. Government, Money Laundering Regulations 2017, Part 2: Customer Due Diligence, Section 5-6 2: U. K. Government, People with significant control (PSC) register, Overview 3: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 1: Risks and Methods of Money Laundering and Terrorist Financing, Page

• Question 253:

  A foreign bank operating under an offshore license wants to open a correspondent account with a United States (U.S.) bank. The foreign bank plans to provide payable through account services to some of its customers. What must the foreign bank provide to the U.S. bank under the USA PATRIOT Act?

  A. A list of politically exposed persons who are owners of the correspondent bank
  B. A list of account holders at the financial institution who will use the payable through account
  C. The person in the United States who can receive service of legal process for the correspondent bank
  D. A list of anti-money laundering training records for the financial institution employees monitoring payable through account transactions
  C. The person in the United States who can receive service of legal process for the correspondent bank

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  Under the USA PATRIOT Act, a U.S. bank that maintains a correspondent account for a foreign bank operating under an offshore license must obtain from the foreign bank the name and address of a person residing in the United States who is authorized to accept service of legal process for records related to the correspondent account1. This requirement is intended to facilitate the U.S. authorities' access to information and records regarding the correspondent account and its underlying transactions, especially in cases where the foreign bank is located in a jurisdiction that does not cooperate with U.S. law enforcement or regulatory requests2. References: USA PATRIOT Act, Section 319(b)(2)(A)1 ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 5, pp. 151-152 Reference: https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/CBDDQ-Capacity-Building/ Wolfsberg% 27s_CBDDQ_Capacity_Building_Guidance_Final%20V1.1.pdf

• Question 254:

  In accordance with Financial Action Task Force (FATF) standards, when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl:

  A. should always apply additional measures on their branches and majority-owned subsidiaries in host countries to manage the money laundering and terrorist financing risk overseas.
  B. is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit.
  C. is required to impose more strict requirements on host country branches, disregarding if host country laws and regulation permit such action.
  D. should close down its operations in the host countries where minimum AML requirements are less strict than those of the home country.
  B. is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit.

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  In accordance with Financial Action Task Force (FATF) standards [1][2], when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit. This means that the Fl should not impose more strict requirements on host country branches, disregarding if host country laws and regulation permit such action, and should not close down its operations in the host countries where minimum AML requirements are less strict than those of the home country. However, the Fl should always apply additional measures on their branches and majority-owned subsidiaries in host countries to manage the money laundering and terrorist financing risk overseas.

• Question 255:

  Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?

  A. Asset freeze
  B. Financial prohibitions
  C. Export and import restrictions
  D. Arms and related materials embargo
  C. Export and import restrictions

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  Export and import restrictions are sanctions imposed by countries to limit or prevent the import or export of certain goods and services. Export and import restrictions are typically used in order to protect a country's economic or political interests, or to prevent the proliferation of weapons or other dangerous materials. Export and import restrictions are often the first type of sanctions used in order to avoid escalating violent conflicts and/or proliferation of weapons. Examples of export and import restrictions include embargoes, quotas, or tariffs.

• Question 256:

  Which constitute red flags in connection with a company involved in illegal logging? (Select Three.)

  A. Business registry activities state promotion of environmental protection
  B. High number of transactions through company's connected bank accounts
  C. Paper packaging demand production
  D. Expeditious shipment of wood to far away jurisdictions
  E. Use of heavy machinery in non-protected areas
  F. Executive's association with politically exposed persons
  D. Expeditious shipment of wood to far away jurisdictions
  E. Use of heavy machinery in non-protected areas
  F. Executive's association with politically exposed persons

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  Red flags in connection with a company involved in illegal logging include: D. Expeditious shipment of wood to far away jurisdictions, E. Use of heavy machinery in non-protected areas, and F. Executive's association with politically exposed persons. These red flags could be indicative of attempts to conceal the origin of illegally harvested wood and to avoid detection by government authorities.

• Question 257:

  Which are essential elements of a KYC program identified by the Basel Committee on Banking Supervision? (Select Two.)

  A. Internal control
  B. Customer acceptance policy
  C. Code of conduct
  D. Risk management
  E. Risk appetite
  B. Customer acceptance policy
  D. Risk management

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  According to the Basel Committee on Banking Supervision (BCBS), a sound KYC program should consist of four essential elements: (i) customer acceptance policy; (ii) customer identification; (iii) on-going monitoring of higher risk accounts; and (iv) risk management. Therefore, B and D are the correct choices among the given options. A customer acceptance policy defines the types of customers that the bank is willing to accept and the conditions for doing so. A risk management system ensures that the bank has adequate policies, procedures, and controls to identify, measure, monitor, and mitigate the risks arising from its KYC program.

• Question 258:

  Private investment companies are potentially vulnerable to money laundering because:

  A. It can be difficult to identify the people who are the ultimate beneficial owners.
  B. they transact shares that are not traded on a stock exchange.
  C. they exist in offshore jurisdictions with tight secrecy laws to protect the privacy of their owner(s).
  D. they are shell companies formed to maintain a client's confidentiality.
  A. It can be difficult to identify the people who are the ultimate beneficial owners.

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  Private investment companies (PICs) are potentially vulnerable to money laundering due to the difficulty in identifying the ultimate beneficial owners. PICs are often used to hold and manage private wealth, making them attractive targets for money launderers. Since these entities are privately held and not publicly traded, it can be challenging to identify the individuals who ultimately control or benefit from them. This makes it easier for money launderers to use them to disguise the origins of illicit funds.

• Question 259:

  What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

  A. Gatekeepers
  B. Correspondent banking
  C. Payable through accounts
  D. Legal persons and arrangements
  D. Legal persons and arrangements

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  The Financial Action Task Force (FATF) 40 Recommendations address the transparency and beneficial ownership of legal persons (such as companies, foundations, associations, etc.) and legal arrangements (such as trusts, fiducies, anstalts, etc.) in Recommendations 24 and 25. These recommendations aim to prevent the misuse of legal persons and arrangements for money laundering, terrorist financing and other illicit purposes, by requiring countries to ensure that accurate and up-to-date information on the natural persons who ultimately own or control them (the beneficial owners) is available to the competent authorities in a timely manner. References: CAMS Study Guide - 6th Edition, Chapter 4, page 112 CAMS Certification Exam Outline, Domain 1, Task 1.2, Skill 1.2.2 Guidance on Transparency and Beneficial Ownership, FATF, October 2014 Recommendation 24: Transparency and beneficial ownership of legal persons, FATF [Recommendation 25: Transparency and beneficial ownership of legal arrangements], FATF Reference: https://www.fatf-gafi.org/documents/news/transparency-and-beneficial-ownership.html

• Question 260:

  Which product type is subject to US extra jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act?

  A. Correspondent banking
  B. Commercial lending
  C. Trade finance
  D. Private banking
  A. Correspondent banking

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  The product type that is subject to US extra jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act is Correspondent Banking. According to the Certified Anti-Money Laundering Specialist (the 6th edition) Study Guide, "The USA PATRIOT Act extends the reach of the Bank Secrecy Act and other anti-money laundering statutes to non-U.S. banks and non-U.S. persons. This extra jurisdictional reach includes, but is not limited to, correspondent banking."