ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 271:

  A startup virtual currency exchange has registered as a money services business and will commence operations in six months. The company will provide digital wallets to customers to hold their virtual currency after purchase. Customers will

  have the option to conduct purchases of the virtual currency and transfer the currency to and from the digital wallet. The startup must develop an anti-money laundering compliance program prior to launch.

  Which two anti-money laundering responsibilities should be considered before business launch? (Choose two.)

  A. A customer onboarding process
  B. Transaction limits consistent with risk appetite
  C. Employees to handle complaints in a timely fashion
  D. Mechanisms to monitor and protect customers' digital wallets from cyber-attacks
  A. A customer onboarding process
  B. Transaction limits consistent with risk appetite

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  A startup virtual currency exchange that operates as a money services business (MSB) must comply with the anti-money laundering (AML) regulations and standards applicable to MSBs, such as the Bank Secrecy Act (BSA) in the United States. One of the key requirements for MSBs is to develop and implement an effective AML compliance program that covers the following four pillars: internal controls, independent testing, designated compliance officer, and training12. Before launching its operations, the startup should consider the following two AML responsibilities that are essential for its compliance program: A customer onboarding process: The startup should establish a customer identification program (CIP) that verifies the identity of its customers and collects relevant information, such as name, address, date of birth, and identification number12. The startup should also perform customer due diligence (CDD) and enhanced due diligence (EDD) for higher-risk customers, such as those who engage in large or frequent transactions, use anonymous or pseudonymous digital wallets, or originate from high-risk jurisdictions34. The startup should also screen its customers against sanctions lists and other watchlists to prevent dealing with prohibited or suspicious entities12. Transaction limits consistent with risk appetite: The startup should set appropriate transaction limits for its customers based on its risk assessment and risk appetite. Transaction limits can help mitigate the exposure to money laundering and terrorist financing risks, as well as comply with the reporting and recordkeeping obligations under the BSA. For example, the startup should report any cash transactions over $10,000 or any suspicious transactions over $2,000 to the Financial Crimes Enforcement Network (FinCEN)12. The startup should also monitor its customers' transactions for any unusual or inconsistent patterns or behaviors that may indicate money laundering or other illicit activities34. References: 1: ACAMS CAMS Certification Package - 6th Edition, Chapter 6: AML Compliance Program, pp. 139 2: ACAMS CAMS Certification Video Training Course, Module 6: AML Compliance Program, Lesson 6.1: The Four Pillars of an AML Compliance Program3 3: ACAMS CAMS Certification Package - 6th Edition, Chapter 4: Customer Due Diligence, pp. 87 4: ACAMS CAMS Certification Video Training Course, Module 4: Customer Due Diligence, Lesson 4.1: Customer Identification Program and Lesson 4.3: Enhanced Due Diligence3

• Question 272:

  Which insurance product is particularly vulnerable to money laundering?

  A. Annuity
  B. Casualty
  C. Collateral
  D. Regulated pension
  A. Annuity

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  According to the ACAMS study guide, one of the insurance products that is particularly vulnerable to money laundering is annuity, which is "a contract that provides a series of payments over a specified period of time, usually for the life of the annuitant" (p. 223). Annuities can be used by money launderers to deposit large sums of illicit funds in a single transaction, or to receive regular payments from a legitimate source after paying the premiums with dirty money. Annuities can also be surrendered or transferred to third parties, making it difficult to trace the origin and destination of funds. References: ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS. ComplyAdvantage. (2023)AML in Insurance: How to Detect and Combat Money Laundering 1. Retrieved from https://complyadvantage.com Financial Crime Academy. (2023)Anti Money Laundering (AML) In Insurance Industry In 2021 2. Retrieved from https://financialcrimeacademy.org

• Question 273:

  The regulators of a US financial institution find that the institution has failed to establish and maintain a reasonably designed AML program. Which regulatory actions should be taken? (Select Two.)

  A. Criminal penalties
  B. Deferred prosecution agreement
  C. Obtain additional license
  D. Cease and desist order
  E. Matter requiring attention
  B. Deferred prosecution agreement
  D. Cease and desist order

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  A deferred prosecution agreement (DPA) is a type of enforcement action that allows a financial institution to avoid criminal prosecution if it admits to wrongdoing, pays a fine, and agrees to remediate its AML program deficiencies within a specified period of time. A cease and desist order (CandD) is another type of enforcement action that requires a financial institution to stop engaging in unsafe or unsound practices or violations of law, and to take corrective actions to address its AML program weaknesses. Both of these actions are commonly used by regulators to address serious or systemic AML program failures by financial institutions, as evidenced by recent cases.

• Question 274:

  A high volume of incoming wire transfers generates an alert about a client. The funds are immediately debited by cash withdrawals and outgoing wire transfers. Which information should be reviewed first to investigate this alert/case?

  A. Customer profile
  B. Adverse media search
  C. Account activity
  D. Open source information
  C. Account activity

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  When a high volume of incoming wire transfers generates an alert about a client and the funds are immediately debited by cash withdrawals and outgoing wire transfers, the first information that should be reviewed to investigate this alert/case is the customer's account activity. This is because the account activity can reveal the origin, destination, purpose, frequency, and amount of the wire transfers, as well as any unusual or inconsistent patterns that may indicate money laundering or fraud. The account activity can also help to compare the wire transfers with the customer's profile, risk rating, expected behavior, and source of funds. Reviewing the account activity can help to determine if the alert is a false positive or a true positive, and if further investigation or reporting is required.

• Question 275:

  Based on studies executed by the Organization for Economic Cooperation and Development (OECD), which occupations are particularly vulnerable to the use of false identities and identity theft?

  A. Government officers
  B. Sea port officers
  C. Lawyers
  D. Laborers
  A. Government officers

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  According to a report by the OECD, government officers are among the occupations that are particularly vulnerable to the use of false identities and identity theft. This is because government officers have access to sensitive and confidential information, such as personal data, tax records, social security benefits, passports, visas, and licenses. Identity fraudsters may target government officers to obtain or alter such information, or to impersonate them to access restricted areas or systems. Identity fraud involving government officers may facilitate tax evasion, money laundering, corruption, terrorism, and other crimes1. Some examples of identity fraud schemes involving government officers are: Rogue agents in the immigration services sector who issue fake or fraudulent documents, such as passports, visas, or residence permits, to facilitate the entry or stay of illegal immigrants, criminals, or terrorists12. Corrupt tax officials who use false identities to create fictitious taxpayers or employers, or to modify tax records, to evade taxes or to claim fraudulent refunds or credits13. Impostors who pose as government officers, such as police, customs, or revenue agents, to extort money or information from unsuspecting victims, or to access secure facilities or databases1 . References: REPORT ON IDENTITY FRAUD: TAX EVASION AND MONEY LAUNDERING VULNERABILITIES Identity Fraud and Immigration Services Identity Theft and Tax Fraud [Identity Theft and Government Impersonation Scams]

• Question 276:

  Which online gambling scheme involves placing bets with deposited funds and colluding with other players to obscure the money's origin?

  A. Concealment
  B. Coordinated betting
  C. Player-to-player transfers
  D. Chip dumping
  D. Chip dumping

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  Chip dumping is a common money laundering technique in online gambling. Option D (Correct): Chip dumping occurs when players collude to transfer funds via staged betting, making illicit funds appear as gambling winnings. Option A (Incorrect): Concealment is a broad term, not a specific technique. Option B (Incorrect): Coordinated betting refers to match-fixing , not money laundering. Option C (Incorrect): Player-to-player transfers are used in money laundering but are not specific to online gambling .

• Question 277:

  What should law enforcement provide when asking an institution to keep an account open?

  A. An explanation of the underlying conduct that is being investigated
  B. A written request with an explanation of the scope of the investigation
  C. An in-person visit by an investigating official to explain the reasons why the account must remain open
  D. A written request on government agency letterhead with the appropriate signature
  D. A written request on government agency letterhead with the appropriate signature

• Question 278:

  A law enforcement agent calls a bank anti-money laundering investigator for supporting information about a suspicious transaction report that was filed the previous month. How should the investigator respond?

  A. Refer the agent to the bank's compliance officer
  B. Send the information to an address provided by the agent
  C. Share the requested information during the telephone call
  D. Require a search warrant before releasing the information
  A. Refer the agent to the bank's compliance officer

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  A U.S. bank must block or reject an international funds transfer when there is an OFAC designated party to the transaction, regardless of the beneficiary or the correspondent bank. This is because the U.S. bank is prohibited from dealing with any person or entity that is on the Specially Designated Nationals and Blocked Persons List (SDN List) or subject to any other OFAC sanctions program1. The SDN List includes individuals, groups, and entities, such as terrorists and narcotics traffickers, that are designated under programs that are not country-specific2. The U.S. bank must also report any blocked or rejected transactions to OFAC within 10 business days3. References: 1: FFIEC BSA/AML Office of Foreign Assets Control - Office of Foreign ... 2: Specially Designated Nationals And Blocked Persons List (SDN) Human ... 3: [Reporting Blocked Transactions | Office of Foreign Assets Control]

• Question 279:

  According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

  A. Commodities traders
  B. Money services businesses
  C. Hawala operators
  D. Real estate agents
  A. Commodities traders

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  Bank A should file a suspicious transaction report (STR) on the transaction in Country A, as it is the financial institution that observes and processes the suspicious activity in its jurisdiction. According to the FATF Recommendations, financial institutions should report any transaction that they have reason to suspect is related to money laundering, terrorist financing, or other criminal activities, regardless of the amount involved1. The STR should include information about the originator, the beneficiary, and the purpose of the transaction, as well as the reasons for suspicion2. Bank A should also comply with any legal or regulatory requirements in Country A regarding the reporting of cross-border wire transfers3. References: 1: FATF Recommendation 20 - Reporting of suspicious transactions 2: FATF Interpretive Note to Recommendation 20 3: FATF Recommendation 16 - Wire transfers Reference: http://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF% 20Recommendations%20(approved%20February%202012)%20reprint%20May%202012%20web%20version.pdf (page 19, DNFBPs: customer due diligence, bulleted point (b))

• Question 280:

  An audit completed the previous week revealed that a private banking customer submitted incomplete documents when establishing an account earlier in the year. The customer received weekly electronic fund transfers from a narcotic-

  producing jurisdiction.

  While the Relationship Manager who opened the account is on leave for 5 weeks, the customer requests that the institution remit a substantial sum to a country that represents a high risk of money laundering. The Relationship Manager is a

  friend of the anti-money laundering specialist. Which of the following should the anti-money laundering officer do first?

  A. File a suspicious transaction report with the competent authority.
  B. Investigate the transfer of funds.
  C. Suspend the transfer until the relationship manager returns.
  D. Postpone the follow-up on the audit finding.
  D. Postpone the follow-up on the audit finding.