ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 261:

  Which of the following is the most likely reason for the Financial Action Task Force to remove a jurisdiction from the Non-Cooperative Countries and Territories list?

  A. Conducting successful annual self-assessments.
  B. Entering into a mutual legal assistance treaty.
  C. Joining the Wolfsberg Group.
  D. Receiving a favorable mutual evaluation.
  D. Receiving a favorable mutual evaluation.

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  The Financial Action Task Force (FATF) is an inter-governmental body that sets standards and monitors compliance with anti-money laundering and counter-terrorist financing (AML/CFT) measures. The FATF conducts periodic mutual evaluations of its members and other jurisdictions to assess their level of implementation of the FATF Recommendations, which are the international AML/CFT standards. The FATF also identifies jurisdictions with strategic deficiencies in their AML/CFT regimes that pose a risk to the international financial system, and places them on two public lists: the High-Risk Jurisdictions subject to a Call for Action (also known as the black list) and the Jurisdictions under Increased Monitoring (also known as the grey list). The FATF works with these jurisdictions to address their deficiencies and monitors their progress through regular follow-up reports and on-site visits. The FATF may remove a jurisdiction from the list if it has made sufficient and sustainable progress in implementing the required reforms and has effectively addressed the identified strategic deficiencies. Therefore, receiving a favorable mutual evaluation is the most likely reason for the FATF to remove a jurisdiction from the list, as it indicates that the jurisdiction has met the FATF standards and has a robust AML/CFT system in place. Conducting successful annual self-assessments, entering into a mutual legal assistance treaty, or joining the Wolfsberg Group are not sufficient reasons for the FATF to remove a jurisdiction from the list, as they do not necessarily reflect the overall compliance with the FATF Recommendations or the resolution of the strategic deficiencies. Moreover, the Wolfsberg Group is a private association of global banks that develops guidance and best practices for the financial sector on AML/CFT issues, and is not affiliated with the FATF. References: ACAMS Study Guide for the CAMS Certification Examination - 6th Edition, Chapter 1: Risks and Methods of Money Laundering and Terrorism Financing, page 11. ACAMS CAMS Certification Video Training Course, Module 1: Risks and Methods of Money Laundering and Terrorism Financing, Lesson 1.4: FATF and the 40 Recommendations. About the Non-Cooperative Countries and Territories NCCT Initiative, FATF website.

• Question 262:

  Law enforcement submitted a request to a bank for information regarding one of its customers. How should the bank respond according to Financial Action Task Force Guidance?

  A. Provide all information requested to support the investigation
  B. Ensure that the request will not violate any local privacy regulations or legislation
  C. Ensure the information is necessary to the investigation before responding to the request
  D. Contact the customer informing the person of the investigation to ensure the bank provides correct information
  B. Ensure that the request will not violate any local privacy regulations or legislation

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  According to the ACAMS Study Guide 6th Edition, Chapter 2, page 37, one of the red flags of money laundering or terrorist financing is the use of nominees, trusts, or third parties to hide the identity, ownership, or control of the funds or assets involved in the transaction. Nominees are individuals or entities that act on behalf of the actual or beneficial owners of a company, trust, or account, and may be used to conceal the source, destination, or purpose of the funds or assets. Nominees may also be used to evade taxes, sanctions, or regulatory requirements. In this case, the compliance officer is unable to verify the identity of the beneficial owners of the company, and only information on the nominee owners was provided. This raises the suspicion that the company may be involved in money laundering or terrorist financing activities, and that the nominee owners may be acting as fronts or intermediaries for the actual or beneficial owners. The compliance officer should conduct further due diligence on the company, the nominee owners, and the beneficial owners, and report any suspicious or unusual activity to the relevant authorities. References: ACAMS Study Guide 6th Edition, Chapter 2, page 37 Beneficial Ownership Meaning and Regulation - Investopedia What is a nominee shareholder? | LawBite

• Question 263:

  What is a key objective of the Egmont Group?

  A. Validate Financial Action Task Force implementations in countries and territories through a system of evaluations
  B. Provide enforcement recommendations to national law enforcement agencies pursuant to a memorandum of understanding
  C. Exchange international law interpretations among regulators through plenary sessions
  D. Foster better and secure communications across financial intelligence units through the application of technology
  B. Provide enforcement recommendations to national law enforcement agencies pursuant to a memorandum of understanding

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  The Egmont Group is a united body of 174 Financial Intelligence Units (FIUs) that uniquely support national and international efforts to counter terrorist financing and share financial information per global anti-money laundering and counter-financing of terrorism (AML/CFT) standards. Its primary objective is to enhance international cooperation in the investigation and prosecution of money laundering and financing of terrorism. The Egmont Group facilitates the exchange of expertise and financial intelligence among FIUs to combat money laundering, terrorist financing, and associated predicate offenses. While it does not conduct financial investigations itself, it plays a crucial role in improving stakeholders' understanding of ML/TF risks and informing policy considerations related to AML/CFT implementation and reforms.

• Question 264:

  According to the Basel Committee on Banking Supervision standards, which statements best describe sound practices in relation to customer due diligence (CDD) policies and procedures? (Choose three.)

  A. Banks should identify its customers based on a general-rules based assessment without considering the expected size and use of the account.
  B. Banks should never allow for verification to be completed after the establishment of the business relationship since it would not be essential for the normal conduct of business.
  C. Banks should take into consideration the occasional banking transaction or the size/level of assets to build an understanding of the customer's profile and behavior.
  D. Banks should develop and implement clear acceptance policies and procedures to identify the types of customer that are likely to pose a higher risk of financing terrorism or money laundering.
  E. Banks should implement enhanced due diligence measures for entering business relationships with high- risk customers, such as approval by senior management.
  F. Banks should use CDD procedures based in another bank's standards when subject to the same criteria for handling funds of a shared customer.
  C. Banks should take into consideration the occasional banking transaction or the size/level of assets to build an understanding of the customer's profile and behavior.
  D. Banks should develop and implement clear acceptance policies and procedures to identify the types of customer that are likely to pose a higher risk of financing terrorism or money laundering.
  E. Banks should implement enhanced due diligence measures for entering business relationships with high- risk customers, such as approval by senior management.

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  According to the Basel Committee on Banking Supervision standards, the following statements best describe sound practices in relation to customer due diligence (CDD) policies and procedures: Banks should take into consideration the occasional banking transaction or the size/level of assets to build an understanding of the customer's profile and behavior. This is because the nature and frequency of transactions and the size of the account balance may indicate the level of risk associated with the customer and the need for ongoing monitoring1 Banks should develop and implement clear acceptance policies and procedures to identify the types of customer that are likely to pose a higher risk of financing terrorism or money laundering. This is because banks should not enter into or maintain relationships with customers who pose unacceptable risks to the bank or the financial system. Banks should also apply a risk-based approach to CDD and apply more stringent measures to higher-risk customers12 Banks should implement enhanced due diligence measures for entering business relationships with high- risk customers, such as approval by senior management. This is because banks should ensure that they have adequate information and controls to manage the risks posed by such customers and to comply with the relevant laws and regulations. Senior management should be involved in the decision-making process and be accountable for the outcomes12 References: 1: Basel Committee on Banking Supervision, Consolidated KYC Risk Management, October 2004, page 6-7. 2: Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, page 8-9.

• Question 265:

  A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer's accounts, you notice that credit card receipts have increased with no. The account officer discovers that the restaurant has

  installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.

  Which red flag should trigger additional investigation?

  A. Privately-owned ATM
  B. Lower cash deposits
  C. Increased credit card receipts
  D. Construction of the new patio dining area
  A. Privately-owned ATM

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  According to the ACAMS study guide, one of the red flags for money laundering in cash-intensive businesses is "the presence of privately-owned ATMs on the premises" (p. 222). This could indicate that the business is using the ATM to deposit or withdraw large amounts of cash from illicit sources, or to facilitate the movement of funds across borders. The other options are not necessarily indicative of money laundering risk, as they could be explained by legitimate factors such as the change in customer preferences, the economic situation, or the expansion of the business. References: ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS. CFI. (2023)Money Laundering - Overview, How It Works, Example 1. Retrieved from https://corporatefinanceinstitute.com CALERT. (2016)How Do Criminals Launder Money Through a Restaurant? 2. Retrieved from https://calert.info

• Question 266:

  Which of the following are key metrics that provide valuable data to senior management about the effectiveness of an FI's AML controls ?

  A. The number of money laundering alerts generated by the watchlist screening system.
  B. The number of clients exited for commercial reasons.
  C. The number of high-risk customers onboarded each month.
  D. The ratio of true positives to false positives generated by the automated monitoring system.
  D. The ratio of true positives to false positives generated by the automated monitoring system.

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  AML controls should be measured for effectiveness using quantifiable metrics . Option D (Correct): The true positive/false positive ratio assesses the efficiency of AML detection. Option A (Incorrect): The number of alerts alone does not measure effectiveness , as many could be false positives . Option B (Incorrect): Client exits do not indicate whether an AML program is working properly . Option C (Incorrect): High-risk customer onboarding must be monitored , but it does not indicate AML effectiveness.

• Question 267:

  Sanctions screening requirements include that a financial institution should:

  A. report an individual whose name appears on a sanctions list to the police.
  B. immediately freeze the bank account of an individual that appears on a sanctions list.
  C. compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies.
  D. immediately close the bank account of an entity who appears on a sanctions list.
  C. compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies.

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  Compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies. This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: "Sanctions screening requirements include that a financial institution should compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies."

• Question 268:

  What was the topic the Wolfsberg Group's first guidance addressed?

  A. Enhanced due diligence for high risk customers
  B. Private banking
  C. AML training for financial institution staff
  D. Merchant acquiring activities
  B. Private banking

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  The Wolfsberg Group is an association of 13 global banks that aims to develop frameworks and guidance for the management of financial crime risks. The group started as a meeting of banks in 1999 to address anti- money laundering (AML) in private banking, which carries an increased degree of risk from a money laundering perspective. In the course of discussions, they articulated principles that reflected uniformly high standards for this client segment. These principles became the first guidance published by the group under the name Wolfsberg Principles. References: The Wolfsberg Group - Institute on Governance Wolfsberg Group - Wikipedia The Group first came together in 2000 at the Wolfsberg castle in Switzerland, accompanied by representatives of Transparency International, to draft anti-money laundering guidelines for private banking

• Question 269:

  Customers of a telecommunications firm received an email explaining an issue with their last order. The customers were directed to the company website via a link in the email to provide personal information. Both the email and website were fake. What type of cybercrime has been committed?

  A. Malware
  B. Cryptojacking
  C. Spear phishing
  D. Tumbling
  C. Spear phishing

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  Spear phishing is a targeted form of phishing scam in which cybercriminals send highly convincing emails to specific individuals within an organization. The emails often contain personal information or details that make them seem legitimate and trustworthy. The goal of spear phishing is to trick the recipients into clicking a malicious link or downloading an infected attachment, or to reveal confidential information or money to the attackers. In this case, the customers of the telecommunications firm received an email that pretended to be from the company, but was actually a fake. The email directed them to a spoofed website that asked for their personal information, which could be used for identity theft or fraud. This is a clear example of a spear phishing attack.

• Question 270:

  An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. Because it is an o line bank the most important recommendation for the expert to make is that the bank.

  A. limit the amount which can be processed per transaction.
  B. ensure that prospective new customers can be properly identified.
  C. set up automated programs to analyze transaction for money laundering activity.
  D. ensure that a firewall is set up to protect the transactions.
  B. ensure that prospective new customers can be properly identified.

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  One of the main challenges and risks for online banks is the verification of customer identity and the prevention of identity fraud. Online banks are more vulnerable to money laundering and terrorist financing because they do not have facetoface contact with their customers and may rely on third-party sources or digital methods to verify customer information. Therefore, the most important recommendation for the anti- money laundering expert to make is that the online bank ensures that prospective new customers can be properly identified and that their identity documents and information are verified using reliable and independent sources. This is also in line with the international standards and best practices for anti-money laundering and counter-terrorist financing, such as the FATF Recommendations, the Basel Committee on Banking Supervision principles, and the EU's Fifth Anti-Money Laundering Directive The other options are less important or less effective than ensuring customer identification. Limiting the amount that can be processed per transaction may reduce the exposure to large-scale money laundering, but it does not prevent the use of multiple transactions or accounts to launder smaller amounts. Setting up automated programs to analyze transactions for money laundering activity may enhance the detection and reporting of suspicious transactions, but it does not address the root cause of money laundering, which is the concealment of the source and ownership of illicit funds. Ensuring that a firewall is set up to protect the transactions may improve the security and confidentiality of the online banking system, but it does not prevent the misuse of the system by money launderers who have legitimate access to the system References: 1: Anti-Money Laundering Guide for Digital Banks by sanctions.io, 2022 2: The fight against money laundering: Machine learning is a game changer by McKinsey, 2021 3: FATF Guidance on Digital Identity, 2020