ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 281:

  What indicates potential money laundering activity by a lawyer?

  A. A lawyer's trust account regularly receives wire transfers from unknown remitters in a high risk country and immediately redirects the same funds to the same remitters account in a low risk country
  B. A lawyer's trust account receives a large value wire transfer from a publicly listed life insurance company and then immediately transfers the same funds out to an unknown individual in a low risk country
  C. A lawyer's account in a low risk country receives a bank draft from another lawyer firm in a high risk country
  D. A lawyer's account in a high risk country receives a cash deposit of an amount that is considerable below the reporting threshold
  A. A lawyer's trust account regularly receives wire transfers from unknown remitters in a high risk country and immediately redirects the same funds to the same remitters account in a low risk country

  ---

  Option A indicates potential money laundering activity by a lawyer, as it involves the use of a trust account to receive and transfer funds from unknown sources in high risk jurisdictions, without any apparent legitimate purpose or explanation. This could be a sign of layering, where the money launderer attempts to conceal the origin and ownership of the illicit funds by moving them through multiple accounts and jurisdictions. Option B does not necessarily indicate money laundering, as the source of the funds is a reputable entity and the transfer could be explained by a legitimate transaction or service. Option C does not necessarily indicate money laundering, as the bank draft could be a payment for a legal service or a settlement between parties. Option D does not necessarily indicate money laundering, as the cash deposit could be a fee for a legal service or a donation, and the amount could be below the reporting threshold to avoid unnecessary paperwork or scrutiny. References: CAMS Certification Package - 6th Edition | ACAMS1 CAMS Certifications: How to Get CAMS Certified | ACAMS2 ACAMS CAMS Certification Video Training Course

• Question 282:

  A Financial Intelligence Unit (FIU) in a country has received a SAR involving significant suspicious fund transfers , not only within its jurisdiction but also in a foreign country . Further information is required from the foreign country to determine

  whether the matter needs to be referred for prosecution locally.

  Which of the following statements is true in this scenario?

  A. Sovereignty of nations means that information cannot be accessed from foreign countries.
  B. It is against international laws on data protection to access information from foreign countries.
  C. Any information related to money laundering can be received from any organization at any time regardless of jurisdiction.
  D. Countries that are members of the Egmont Group can request assistance for information from each other.
  D. Countries that are members of the Egmont Group can request assistance for information from each other.

  ---

  International cooperation is essential in AML investigations , and the Egmont Group facilitates FIU-to-FIU information sharing . Option D (Correct): Egmont Group members can request and share intelligence for AML investigations under established protocols. Option A (Incorrect): Sovereignty does not prevent cooperation if proper legal frameworks exist. Option B (Incorrect): AML regulations permit international data sharing , especially under agreements like Mutual Legal Assistance Treaties (MLATs) . Option C (Incorrect): Data sharing is restricted to authorized entities , not all organizations . Why This Matters: Failure to share AML intelligence across borders can enable: Cross-border money laundering. Terrorist financing networks to operate undetected. Regulatory penalties for non-compliance.

• Question 283:

  Financial Action Task Force (FATF)-style regional bodies are created and obliged to understand the inherent money laundering and terrorist financing risks in the region of the world they serve. What is one of the methods they use to understand these risks?

  A. They require member countries to develop statistical metrics over money laundering and terrorist financing crimes
  B. They require participating financial institutions of their members to file suspicious transaction reports to the regional body
  C. They conduct global research on money laundering and terrorist financing trends and report their findings in their own typologies report
  D. They conduct regional-level research and analysis of the money laundering and terrorist financing methods and trends using standards and templates used for FATF typologies reports
  D. They conduct regional-level research and analysis of the money laundering and terrorist financing methods and trends using standards and templates used for FATF typologies reports

  ---

  One of the methods that FATF-style regional bodies (FSRBs) use to understand the inherent money laundering and terrorist financing risks in their regions is to conduct regional-level research and analysis of the methods and trends used by criminals and terrorists to exploit the vulnerabilities of the financial system. This research and analysis is done using the standards and templates developed by the FATF for its typologies reports, which are documents that describe the common features, techniques, and patterns of money laundering and terrorist financing activities. By producing their own typologies reports, FSRBs can identify the specific risks and challenges faced by their member countries and jurisdictions, and provide guidance and recommendations on how to mitigate them. References: What are the 9 FATF-Style Regional Bodies (FSRBs)? - Sygna, What are FATF and FSRB typologies? FATF-Style Regional Bodies (FSRBs) - Asia/Pacific Group on Money Laundering, What are the main duties of FSRBs? Financial Action Task Force - Wikipedia, Typologies. https://www.fatf-gafi.org/media/fatf/documents/recommendations/Private-Sector-InformationSharing.pdf (18)

• Question 284:

  The compliance officer at a crowd funding website is in charge of monitoring new crowd funding projects.

  Recently, the number of crowd funding projects has significantly increased. Which red flag indicates the highest anti-money laundering risk?

  A. Those with the largest number of donors
  B. Projects that get funding within days of their start
  C. Projects with the highest monetary success threshold
  D. Projects that start and close and are fully funded within a very short period
  D. Projects that start and close and are fully funded within a very short period

  ---

  According to the ACAMS study guide, one of the red flags for money laundering in crowdfunding platforms is "projects that are fully funded within a very short period of time, especially if the funding comes from a small number of donors or from a single donor" (p. 222). This could indicate that the project is a front for laundering illicit funds or financing terrorism. The other options are not necessarily indicative of money laundering risk, as they could be explained by legitimate factors such as the popularity, urgency, or ambition of the project.

• Question 285:

  The Egmont Group is a world wide organization of A. banking regulators.

  B. financial intelligence units.

  C. law enforcement authorities.

  D. central banks.

  Correct Answer. B
  B

  ---

  The Egmont Group is a global network of 170 financial intelligence units (FIUs) that facilitate the exchange of information and cooperation among member FIUs to combat money laundering, terrorist financing, and associated predicate offences12. FIUs are national agencies that collect, analyze, and disseminate financial intelligence to relevant authorities3. The Egmont Group supports the implementation of international standards and best practices for FIUs, provides training and technical assistance, and promotes the development of secure and effective communication channels.

• Question 286:

  What are two requirements with respect to supporting documentation that is used to identify potentially suspicious activity, according to Financial Action Task Force? (Choose two.)

  A. It must be retained for at least five years
  B. It must be retained for at least seven years
  C. It must be kept in a manner so that it can be provided promptly
  D. It must only be released to the government through a subpoena process
  A. It must be retained for at least five years
  C. It must be kept in a manner so that it can be provided promptly

  ---

  https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF% 20Recommendations%202012.pdf

• Question 287:

  The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account. Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

  A. The name and address of all shell banks the bank maintains accounts for
  B. The name and address of all beneficial owners who own 25% or more of the bank
  C. Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account
  D. The name and address of a U.S. person who is authorized to receive service of legal process for the bank
  A. The name and address of all shell banks the bank maintains accounts for
  D. The name and address of a U.S. person who is authorized to receive service of legal process for the bank

  ---

  According to Section 313 of the USA PATRIOT Act, U.S. financial institutions are prohibited from maintaining correspondent accounts for foreign shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. Therefore, a non-U.S. bank must provide the name and address of all shell banks that it maintains accounts for, if any, to its U.S. correspondent. This is to ensure that the U.S. financial institution does not indirectly provide services to shell banks, which pose a high risk of money laundering and terrorist financing. According to Section 319 (b) of the USA PATRIOT Act, U.S. financial institutions that provide a correspondent account to a foreign bank must maintain records of the owners of the foreign bank and the name and address of a U.S. person who is authorized to receive service of legal process for records regarding the correspondent account. This is to facilitate the access of U.S. law enforcement authorities to information related to the correspondent account in case of an investigation or a subpoena. The other two options, B and C, are not required by the USA PATRIOT Act, although they may be part of the due diligence or enhanced due diligence procedures that U.S. financial institutions apply to their foreign correspondent accounts, as per Section 312 of the USA PATRIOT Act. References: USA PATRIOT Act FACT SHEET for Section 312 of the USA PATRIOT Act Final Regulation and Notice of Proposed Rulemaking US PATRIOT ACT CAMS Exam: USA PATRIOT Act Requirements for Opening a Correspondent Account Reference: https://www.sec.gov/about/offices/ocie/amlsourcetool.htm

• Question 288:

  In its paper. Customer Due Diligence for Banks, the Basel Committee on Banking Supervision identified which risks on banking institutions as a result of an inadequate KYC program?

  A. Outsourcing, legal, concentration, reputational
  B. Security, information, local, operational
  C. Legal, reputational, operational, concentration
  D. Credit, operational, market, concentration
  C. Legal, reputational, operational, concentration

  ---

  The Basel Committee on Banking Supervision identified four risks to banking institutions as a result of an inadequate KYC program: legal, reputational, operational, and concentration. Legal risks include the potential for fines or sanctions for non-compliance with applicable laws and regulations. Reputational risks include the loss of customer confidence due to the institution's involvement in illicit activities. Operational risks include the potential for fraudulent or suspicious activity to go undetected. Finally, concentration risks involve the potential for a single customer or group of related customers to dominate the institution's operations.

• Question 289:

  A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $ 1,250,000 from a dealer in Benin in West AfricA. All wires originated from Benin and were in increments of $50,000. Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account activity identify the vehicles but cannot easily be tied to the wires receives. What is the suspicious behavior?

  A. The dock shipping receipts match the vehicles
  B. Vehicles are regularly shipped internationally
  C. Wires received are in large, even dollar amounts
  D. Account debits are payable to transport companies
  C. Wires received are in large, even dollar amounts

  ---

  The correct answer is C. Wires received in large, even dollar amounts are a suspicious behavior, as they may indicate an attempt to avoid reporting thresholds or to conceal the source of funds. Large and round numbers are often used by money launderers to simplify calculations or to avoid arousing suspicion12. The other options are not necessarily suspicious, as they may reflect the normal business operations of a wholesale auto business that ships vehicles internationally. The dock shipping receipts match the vehicles (A), vehicles are regularly shipped internationally (B), and account debits are payable to transport companies (D) are all plausible and legitimate activities for such a business. References: ACAMS CAMS Certification Video Training Course3, Module 3: Risks and Methods of Money Laundering and Terrorism Financing, Lesson 2: Methods of Money Laundering ACAMS CAMS Certification Study Guide1, Chapter 3: Risks and Methods of Money Laundering and Terrorism Financing, Section 3.2: Methods of Money Laundering, pp. 79-80

• Question 290:

  In the FATF 40 recommendations, the focus of AML efforts has been expanded beyond Financial Institutions. Which three businesses and/or professions are covered? Choose 3 answers

  A. casinos, when customers engage in financial transactions equal to or above a designated Threshold
  B. Real estate agents when they are involved in transactions for clients concerning buying and selling properties
  C. Dealers in art, when they engage in any cash transaction with a customer at or above a designated threshold
  D. Trust and company service providers
  A. casinos, when customers engage in financial transactions equal to or above a designated Threshold
  B. Real estate agents when they are involved in transactions for clients concerning buying and selling properties
  D. Trust and company service providers

  ---

  According to the FATF 40 recommendations, the focus of AML efforts has been expanded beyond financial institutions to include other businesses and professions that are vulnerable to money laundering and terrorist financing risks. These include: Casinos, when customers engage in financial transactions equal to or above a designated threshold. Casinos are required to identify and verify the identity of their customers, keep records of transactions, report suspicious transactions, and implement internal controls and compliance programs to prevent money laundering and terrorist financing. The designated threshold is USD/EUR 3,000 or more1. Real estate agents, when they are involved in transactions for clients concerning buying and selling properties. Real estate agents are required to identify and verify the identity of their customers and beneficial owners, keep records of transactions, report suspicious transactions, and implement internal controls and compliance programs to prevent money laundering and terrorist financing. Real estate transactions can involve large amounts of money and complex legal arrangements that can be used to conceal the source or destination of illicit funds2. Trust and company service providers, when they prepare for or carry out transactions for a client concerning the creation, operation or management of legal persons or arrangements. Trust and company service providers are required to identify and verify the identity of their customers and beneficial owners, keep records of transactions, report suspicious transactions, and implement internal controls and compliance programs to prevent money laundering and terrorist financing. Trust and company service providers can facilitate the misuse of legal persons or arrangements, such as shell companies or trusts, to hide the true ownership and control of assets or funds3. The other option, dealers in art, when they engage in any cash transaction with a customer at or above a designated threshold, is not covered by the FATF 40 recommendations. However, dealers in precious metals and stones are covered when they engage in any cash transaction with a customer at or above a designated threshold of USD/EUR 15,000 or more. Dealers in art may be subject to national or regional regulations that impose AML obligations on them, depending on the jurisdiction. References: FATF Recommendation 22: Designated Non-Financial Businesses and Professions: Customer Due Diligence FATF Recommendation 23: Designated Non-Financial Businesses and Professions: Other Measures FATF Recommendation 24: Transparency and Beneficial Ownership of Legal Persons [FATF Recommendation 25: Transparency and Beneficial Ownership of Legal Arrangements]