ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 351:

  Which example describes the vulnerability of the securities sector for money laundering?

  A. A non-U.S. person seeks toopen a brokerage account with a U.S. broker-dealer
  B. A broker-dealer must have a customer identification program in place
  C. Broker-dealers generally have a higher percentage of inexperienced staff
  D. Compensation for broker-dealers is generally based oncommissions
  D. Compensation for broker-dealers is generally based oncommissions

• Question 352:

  FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:

  A. conducting the risk assessment of products and services.
  B. conducting ongoing due diligence on the business relationship and monitoring of transactions.
  C. identifying the products and services and their suitability to customers.
  D. identifying the number of beneficial owners without the verification of their true identity.
  B. conducting ongoing due diligence on the business relationship and monitoring of transactions.

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  According to the FATF Recommendation 10, financial institutions should conduct ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds. This is one of the core measures of customer due diligence (CDD) that aim to prevent and detect money laundering and terrorist financing risks. References: The main reference for this question is the document titled "International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation - The FATF Recommendations" published by the FATF in February 2018. You can access it by clicking here. You can also find more information about the CDD measures and the risk-based approach on the FATF website, the CFATF website, the Central Bank of Ireland website, and the Medium blog.

• Question 353:

  Why would a credit card account likely not be used in the placement stage of money laundering?

  A. Customer identification is required
  B. Cash payments are generally restricted
  C. Credit refunds have a waiting period
  D. Credit cards can access ATMs globally
  B. Cash payments are generally restricted

• Question 354:

  The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are

  remitted to Country A. In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country B. Each cash transaction always totals

  exactly $8,000.

  What should alert the agent to possible money laundering activity by the two customers?

  A. They remit funds to the same person
  B. They have been coming in three times a week
  C. It is unusual for customers to remit to Country B
  D. Each of their transactions is just below the cash reporting threshold
  D. Each of their transactions is just below the cash reporting threshold

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  This involves breaking down large amounts of cash into smaller transactions that are below the reporting threshold of $10,000 in the United States, in order to avoid detection and reporting by the financial institution. Structuring is a red flag for money laundering and should be reported to the authorities as a suspicious activity. The other options are not necessarily indicative of money laundering, as they could have legitimate explanations. For example, the customers may have a family or business connection to the same recipient in Country B, or they may have a regular need to send money three times a week.

• Question 355:

  A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank. Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity?

  A. Ensure the designated entity's confidential information is not shared with other entities.
  B. Obtain additional information about customers permitted to use this account.
  C. Verify that the EU bank serves the designated entity.
  D. Perform enhanced due diligence on the EU bank.
  B. Obtain additional information about customers permitted to use this account.

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  Under USA PATRIOT Act Section 311, the U.S. government can impose special measures against a foreign jurisdiction, institution, or transaction that is of primary money laundering concern1. These measures can range from requiring additional recordkeeping and reporting to prohibiting or restricting the opening or maintaining of correspondent or payable-through accounts for the designated entity2. A payable-through account is a type of correspondent account that allows customers of a foreign bank to access the U.S. financial system by writing checks or making wire transfers from the foreign bank's account at a U.S. bank. In this case, the U.S. government has enacted special measures against a designated entity that has a payable- through account with an EU bank, which in turn has a correspondent banking relationship with a U.S. bank. One of the possible actions that the U.S. bank might be required to take regarding the EU bank's services for the designated entity is to obtain additional information about customers permitted to use this account. This is to ensure that the U.S. bank can identify and monitor the transactions and activities of the designated entity and its customers, and to prevent any money laundering or terrorist financing risks. The other actions listed are not likely to be required by the U.S. government under Section 311. Ensuring the designated entity's confidential information is not shared with other entities is not a special measure, but a general obligation of any financial institution under privacy laws. Verifying that the EU bank serves the designated entity is not a relevant action, since the U.S. government has already designated the entity as a primary money laundering concern. Performing enhanced due diligence on the EU bank is not a specific action related to the payable-through account, but a broader requirement for any correspondent account under Section 312 of the USA PATRIOT Act References: 1: USA PATRIOT Act | FinCEN.gov 2: 311 Actions | U.S. Department of the Treasury 3: Overview of Correspondent Banking and "De Risking" Issues - CRS Reports 4: U.S. TREASURY DEPARTMENT OFFICE OF PUBLIC AFFAIRS 5: Fact Sheet: Overview of Section 311 of the USA PATRIOT Act

• Question 356:

  Which section of the USA PATRIOT Act permits the U.S. government to seize funds deposited in a U.S. correspondent account of a foreign bank , creating extraterritorial impact ?

  A. Section 319(b)
  B. Section 314(b)
  C. Section 314(a)
  D. Section 319(a)
  A. Section 319(b)

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  Section 319(b) of the USA PATRIOT Act expands U.S. jurisdiction over foreign banks' correspondent accounts . Option A (Correct): Allows the U.S. government to seize funds in a foreign bank's U.S. correspondent account if linked to illicit activity . Option B (Incorrect): Section 314(b) is about voluntary information sharing among financial institutions. Option C (Incorrect): Section 314(a) facilitates law enforcement data requests . Option D (Incorrect): Section 319(a) accelerates regulatory access to foreign bank records, not seizure of funds.

• Question 357:

  A bank receives a request for a subpoena (or a client who has been the subject of monitoring for several months. The bank wishes to close the account in order to mitigate any additional risk. However, the government requires that the account remain open. What document must be provided to the bank to keep the account open?

  A. An email agreement between the government and the financial institution to keep the account open
  B. A request in writing under proper letterhead and authority from the government
  C. An order to keep the account open but with the funds frozen
  D. An authorization from the board of directors
  B. A request in writing under proper letterhead and authority from the government

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  If a financial institution wishes to close an account due to concerns about potential money laundering or other financial crimes, it is generally required to file a suspicious activity report (SAR) with the appropriate government agency. However, there may be instances where the government requires the account to remain open for ongoing investigation purposes. In such cases, the government must provide a written request under proper letterhead and authority to keep the account open. This document will serve as legal justification for the financial institution to maintain the account, even though it may pose a higher risk for money laundering or other financial crimes.

• Question 358:

  Which risk factors are considered when assessing risk rating of customers? (Select Three.)

  A. Customer risk
  B. Geographic risk
  C. Product risk
  D. Credit risk
  E. Fraud risk
  F. Employment risk
  A. Customer risk
  B. Geographic risk
  C. Product risk

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  When assessing the risk rating of customers, financial institutions should consider various factors that may indicate the potential for money laundering, terrorist financing, or other illicit activities. According to the ACAMS Study Guide for the CAMS Certification Examination1, some of the key risk factors are: Customer risk: This refers to the characteristics of the customer that may affect their risk profile, such as their identity, occupation, source of funds, business activities, reputation, and political exposure. For example, customers who are politically exposed persons (PEPs), cash-intensive businesses, non-resident customers, or customers with complex ownership structures may pose a higher risk of money laundering or terrorist financing. Geographic risk: This refers to the location of the customer, their business, or their transactions, and the level of risk associated with that location. For example, customers who are based in, operate in, or transact with jurisdictions that have weak anti-money laundering (AML) regulations, high levels of corruption, or are subject to sanctions or embargoes may pose a higher risk of money laundering or terrorist financing. Product risk: This refers to the type of products or services that the customer uses or offers, and the level of risk associated with those products or services. For example, customers who use or offer products or services that are anonymous, complex, or facilitate cross-border transactions may pose a higher risk of money laundering or terrorist financing. Other risk factors that may be considered include transaction risk, delivery channel risk, and industry risk. However, these are not among the options given in the question.

• Question 359:

  Which are characteristics of Mutual Legal Assistance Treaties (MLATs)? (Select Three.)

  A. MLATs are neither public nor binding under international law.
  B. MLATs cannot be used for obtaining banking records from treaty partners.
  C. MLATs do not provide a legal basis for transmitting evidence.
  D. MLATs only involve two countries.
  E. MLATs cooperatively combat crime between countries.
  F. MLATs are useful for gathering evidence and intelligence in a foreign country.
  D. MLATs only involve two countries.
  E. MLATs cooperatively combat crime between countries.
  F. MLATs are useful for gathering evidence and intelligence in a foreign country.

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  Mutual Legal Assistance Treaties (MLATs) are characteristics of D. only involving two countries, E. cooperatively combating crime between countries, and F. being useful for gathering evidence and intelligence in a foreign country. MLATs are public and binding under international law (A), can be used for obtaining banking records from treaty partners (B), and provide a legal basis for transmitting evidence ?

• Question 360:

  An organization uses an automated surveillance system that generates a very large volume of anti-money laundering alerts. The monthly volume of alerts has increased over the last year causing the compliance staff to fall significantly behind

  reviewing the alerts. As a result, the system settings are under review to determine if they are appropriate.

  Which action should be included in the evaluation of system settings?

  A. Compare settings to organizations within its peer group
  B. Flag filters with no history of generating an alert for removal
  C. Review parameter settings based on the latest risk assessment
  D. Calibrate parameters based on staffing capabilities to clear alerts
  C. Review parameter settings based on the latest risk assessment

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  Reviewing parameter settings based on the latest risk assessment should be included in the evaluation of system settings for anti-money laundering alert surveillance. This is because parameter settings determine the thresholds and criteria for generating alerts based on the risk profile of the customers, products, services, channels, and jurisdictions involved in the transactions. A risk assessment is a periodic and comprehensive analysis of the potential money laundering and terrorist financing risks faced by an organization, and it should inform the design and implementation of an effective anti-money laundering program, including the alert surveillance system. By aligning the parameter settings with the risk assessment, an organization can ensure that the system is capturing the most relevant and high-risk transactions, and reducing the number of false positives or irrelevant alerts. References: CAMS Study Guide 6th Edition, page 37-38. Implementing AML Transaction Monitoring Systems: Critical Considerations, page 2-3. 3 techniques to improve AML transaction monitoring strategies, page 2.