ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 311:

  Which elements can trigger a review of the existing relationship during the opening of a new account? (Select Two.)

  A. Regular checks on the flow of funds
  B. Recent adverse media on the client
  C. A false positive result for name screening
  D. Incoming transfers from high-risk jurisdictions
  E. Estimated total income decrease
  B. Recent adverse media on the client
  D. Incoming transfers from high-risk jurisdictions

  ---

  According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, elements that can trigger a review of the existing relationship during the opening of a new account include recent adverse media on the client (page 60) and incoming transfers from high-risk jurisdictions (page 61). The other elements listed, such as regular checks on the flow of funds, a false positive result for name screening, and an estimated total income decrease, are not triggers for a review.

• Question 312:

  On-line financial technologies are susceptible to money laundering risk because

  A. Viruses significantly damage communications and commerce.
  B. The risk of identity theft is greatly increased.
  C. The identity of the people who conduct transactions may be unknown.
  D. Baring staff are familiar with how this technology can be abused.
  C. The identity of the people who conduct transactions may be unknown.

  ---

  According to the Anti-Money Laundering Specialist (the 6th edition) resources, one of the challenges of online financial technologies is the difficulty of verifying the identity and legitimacy of the customers and counterparties. This creates opportunities for money launderers and other criminals to exploit the anonymity and speed of online transactions to move and conceal illicit funds. The other options are not directly related to the money laundering risk posed by online financial technologies.

• Question 313:

  According to experts, what is the most effective way to prevent money laundering through financial institutions?

  A. Ensuring that transaction monitoring systems can identify terrorist financing
  B. Collecting information on beneficial owners and foreign customers
  C. Instituting a policy prohibiting the acceptance of funds intended for terrorist financing
  D. Implementing a sound customer due diligence program
  D. Implementing a sound customer due diligence program

  ---

  Implementing a sound customer due diligence (CDD) program is the most effective way to prevent money laundering through financial institutions, according to experts. CDD is the process of identifying and verifying the identity of customers and assessing their risk profile, source of funds, and expected activity. CDD helps financial institutions to detect and prevent money laundering by enabling them to know their customers, monitor their transactions, and report any suspicious or unusual behavior. CDD is also a key requirement of the international standards and best practices for anti-money laundering and combating the financing of terrorism (AML/CFT), such as the Financial Action Task Force (FATF) Recommendations and the Basel Committee on Banking Supervision (BCBS) Guidelines. The other options are not as effective as CDD, as they are either too narrow or too broad in scope. Ensuring that transaction monitoring systems can identify terrorist financing is important, but it does not address the broader issue of money laundering, which may involve other types of criminal proceeds or activities. Collecting information on beneficial owners and foreign customers is a part of CDD, but it is not sufficient by itself, as it does not cover the risk assessment and ongoing monitoring aspects of CDD. Instituting a policy prohibiting the acceptance of funds intended for terrorist financing is a good practice, but it is not a preventive measure, as it relies on the assumption that the funds are already identified as such, which may not be the case. References: Customer Due Diligence - FATF-GAFI.ORG Sound management of risks related to money laundering and financing of terrorism - Bank for International Settlements CAMS Study Guide 6th Edition, page 36-37.

• Question 314:

  An individual opens an e-account in an off-shore gambling website using non-documentary verification and creates an e-wallet on a mobile device. In order to add funds to the account, the individual uses a credit card, wire transfers, cryptocurrency, and a money service business. Which source of money represents more risk of money laundering?

  A. Wire transfer
  B. Cryptocurrency
  C. Money service business
  D. Credit card
  B. Cryptocurrency

  ---

  Cryptocurrency is a digital or virtual currency that uses cryptography to secure and verify transactions. Cryptocurrencies are decentralized and operate outside the control of any central authority, such as a government or a bank. This makes them attractive for money launderers, who can use them to transfer funds anonymously, quickly, and globally, without leaving a trace or being subject to regulation. Cryptocurrencies pose more risk of money laundering than other sources of money, such as wire transfers, credit cards, or money service businesses, which are subject to more oversight, verification, and reporting requirements. References: CAMS Study Guide, 6th Edition, Chapter 1, Section 1.9, page 37 CAMS eLearning Course, Module 1, Lesson 9 ACAMS Crypto Hub Reference: https://complyadvantage.com/knowledgebase/money-laundering-crypto-exchanges/

• Question 315:

  Typical events to identify and investigate potential AML activities include: (Select Three.)

  A. blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List.
  B. internal tips from employees of the bank about potential suspicious activity.
  C. alerts triggered by the automated AML monitoring system.
  D. subpoenas requesting information for civil cases.
  E. requests from law enforcement agencies.
  F. accounts going to dormant status.
  A. blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List.
  B. internal tips from employees of the bank about potential suspicious activity.
  C. alerts triggered by the automated AML monitoring system.

  ---

  Typical events to identify and investigate potential AML activities include: A) blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List; B) internal tips from employees of the bank about potential suspicious activity; and C) alerts triggered by the automated AML monitoring system [1]. Blocked transactions are those which involve individuals included on the Specially Designated Nationals and Blocked Persons List ?this is a list maintained by the Office of Foreign Assets Control of individuals who are subject to economic or trade sanctions [1], or who may be involved in money laundering or terrorist activities [2]. Internal tips are those which are provided by employees of the bank who may have observed suspicious activity, or have reason to believe that certain transactions or activities may be related to potential money laundering. Alerts triggered by the automated AML monitoring system are those which are generated by the banks systems and processes which are designed to detect potential money laundering.

• Question 316:

  Which step should financial institutions take when complying with sanctions requirements?

  A. Adopt automatic screening systems to detect designated persons and entities.
  B. Conduct enhanced due diligence for prohibited entities on the sanctions list.
  C. Change the risk profile to "high-risk" if an existing customer becomes a sanctioned entity and continue monitoring further transactions.
  D. Freeze the funds or assets of designated persons and entities once this decision is approved by the Board.
  D. Freeze the funds or assets of designated persons and entities once this decision is approved by the Board.

  ---

  The financial institution should freeze the funds or assets of designated persons and entities once this decision is approved by the Board. This is to comply with the obligation to implement targeted financial sanctions imposed by the United Nations Security Council (UNSC) or other relevant authorities. Freezing means preventing any access, use, transfer, or disposal of the funds or assets by the designated persons and entities or by any other person on their behalf. The financial institution should also report the freezing action to the competent authority and the relevant sanctions committee Option A is not a sufficient step to comply with sanctions requirements, but rather a tool to facilitate compliance. Adopting automatic screening systems to detect designated persons and entities can help the financial institution to identify potential matches and flag them for further investigation. However, screening systems are not infallible and may generate false positives or false negatives. Therefore, the financial institution should also conduct manual checks and verification of the screening results Option B is not a relevant step to comply with sanctions requirements, but rather a measure to mitigate money laundering and terrorist financing risks. Conducting enhanced due diligence for prohibited entities on the sanctions list may be useful to obtain more information about the nature and purpose of the business relationship, the source and destination of the funds, and the beneficial ownership and control structure of the entity. However, enhanced due diligence does not replace the obligation to freeze the funds or assets of the designated persons and entities Option C is not an appropriate step to comply with sanctions requirements, but rather a violation of the obligation to freeze the funds or assets of the designated persons and entities. Changing the risk profile to "high-risk" if an existing customer becomes a sanctioned entity and continuing to monitor further transactions may expose the financial institution to legal and reputational risks, as well as potential sanctions evasion or circumvention. The financial institution should terminate the business relationship with the designated person or entity and freeze their funds or assets without delay

• Question 317:

  What are some of the shortcomings in using letters regulatory? Choose 3 answers

  A. They can be time-consuming
  B. They are based on a pre-existing mutual treaty between the countries
  C. They are usually restricted to obtainingevidence that can be used for prosecution and other judicial proceedings
  D. They must be approved in advance by the countries judicial authorities
  A. They can be time-consuming
  B. They are based on a pre-existing mutual treaty between the countries
  D. They must be approved in advance by the countries judicial authorities

• Question 318:

  To ensure the independence of an audit for an AML program those involved in the audit would best be described as being:

  A. not Involved in the organizations AML compliance program and having a reporting line to the board of directors or committee thereof
  B. not involved in the organizations AML compliance program and having a reporting line to the organization's Chief Executive Officer
  C. not involved in the organization's suspicious activity report filing process and having a reporting line to the board of directors or committee thereof.
  D. not involved in the organization's suspicious activity report filing process and having a reporting line to the organization's Chief Executive Officer
  A. not Involved in the organizations AML compliance program and having a reporting line to the board of directors or committee thereof

• Question 319:

  A government has instituted a new anti-money laundering laws which require all financial institutions to obtain certain information from its customers. Which step should an institution located in this jurisdiction take to ensure compliance?

  A. Change procedures to require that the necessary information is obtained
  B. Change procedures and systems as necessary and provide employee training
  C. Send a notice to customers asking them to provide the necessary information
  D. Change systems to ensure the required information is automatically obtained from all customers
  B. Change procedures and systems as necessary and provide employee training

  ---

  According to the CDD Rule, covered financial institutions must establish and maintain written procedures that are reasonably designed to identify and verify beneficial owners of legal entity customers and to include such procedures in their anti-money laundering compliance program. These procedures should also be updated as necessary to reflect changes in the law or the institution's risk profile2. Moreover, the institution should provide adequate training to its employees on the new requirements and monitor their compliance. References: 1: FinCEN Guidance, FIN-2020-G002, August 3, 2020, p. 1 2: Your responsibilities under money laundering supervision - GOV.UK, Section: Customer due diligence requirements 3: Customer identification: Know your customer (KYC) | AUSTRAC, Section: Training and awareness

• Question 320:

  An AML specialist at a financial institution is presented with a search warrant. Which actions should be taken to comply with the search? (Select Two.)

  A. Remember what items the agents have seized and taken from the premise.
  B. Record the names and affiliations of the agents who conduct the search.
  C. Proactively ask the agents as many questions as time allows.
  D. Leave the premises to allow the agents to conduct the search.
  E. Obtain a copy of the warrant or photocopy the original warrant.
  B. Record the names and affiliations of the agents who conduct the search.
  E. Obtain a copy of the warrant or photocopy the original warrant.

  ---

  When presented with a search warrant, the AML specialist should record the names and affiliations of the agents who conduct the search. This will help in identifying who conducted the search in case there are any issues that need to be addressed later. Additionally, the AML specialist should obtain a copy of the warrant or photocopy the original warrant. This is important to ensure that the warrant is valid and that the agents are authorized to conduct the search. It is not appropriate to ask the agents questions or remember what items they have seized, as this could interfere with the search and potentially lead to legal issues. Finally, leaving the premises to allow the agents to conduct the search is not necessary, as the AML specialist has the right to be present during the search.