ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 401:

  A non-US bank is implementing a sanctions compliance program. Which extraterritorial reach of Office of Foreign Assets Control (OFAC) regulations would matter the most to the foreign bank?

  A. OFAC administers sanctions based on criminal investigations against targeted foreign individuals.
  B. OFAC sanctions programs prohibit transactions and require the blocking of assets of foreign individuals that appear in negative media sources.
  C. OFAC acts only under presidential wartime emergency powers, against countries and foreign individuals considered enemies of the US.
  D. OFAC has the power to impose significant penalties on foreign individuals who are found to be in violation of the blocking orders.
  D. OFAC has the power to impose significant penalties on foreign individuals who are found to be in violation of the blocking orders.

  ---

  This includes civil monetary penalties, criminal prosecution, and other enforcement actions. These penalties can be enforced against foreign individuals, regardless of whether the individual is located within the US or abroad. Additionally, OFAC has the authority to impose sanctions on foreign countries and foreign individuals, including individuals and entities located outside of the US.

• Question 402:

  Which measures should financial institutions (FIs) take when complying with sanctions requirements ?

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

  ---

  FIs must have effective sanctions screening processes to prevent transactions involving designated persons or entities . Option A (Correct): Automated screening systems help financial institutions identify sanctioned individuals, entities, and countries in real time . Option B (Incorrect): If a customer is listed on a sanctions list , the FI must freeze the account , not simply mark it "high-risk" and continue transactions. Option C (Incorrect): Prohibited entities should not undergo EDD --transactions with them must be blocked or reported . Option D (Incorrect): Freezing sanctioned assets does not require board approval ; it must be done immediately as per regulations. Sanctions Compliance Requirements: Sanctioning Body Examples of Sanctions Lists U.S. (OFAC) Specially Designated Nationals (SDN) List United Nations (UN) UN Security Council Sanctions List European Union (EU) EU Consolidated Sanctions List UK (OFSI) UK Sanctions List Why Sanctions Screening is Important: Failing to comply can result in billions in fines (e.g., BNP Paribas paid $8.9 billion in OFAC fines). Transactions involving sanctioned entities can be blocked, leading to regulatory scrutiny. Automated screening tools (e.g., SWIFT, World-Check, LexisNexis) improve compliance efficiency.

• Question 403:

  A Financial Intelligence Unit (FIU) in a country receives a SAR involving potential money laundering. The FIU wants to share this information with a foreign FIU . Which mechanism allows secure information sharing between FIUs?

  A. Mutual Legal Assistance Treaty (MLAT)
  B. Egmont Secure Web
  C. INTERPOL Database
  D. UN Sanctions List
  B. Egmont Secure Web

  ---

  FIUs exchange information through secure platforms to investigate financial crime cases. Option B (Correct): The Egmont Secure Web is the primary communication platform for FIUs globally . Option A (Incorrect): MLATs allow for formal legal cooperation but are not an FIU-to-FIU communication tool . Option C (Incorrect): INTERPOL databases track criminal records , not financial intelligence data. Option D (Incorrect): The UN Sanctions List provides entity restrictions , not an FIU data-sharing mechanism.

• Question 404:

  Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?

  A. Financial prohibitions
  B. Export and import restrictions
  C. Arms and related materials embargo
  D. Asset freeze
  C. Arms and related materials embargo

  ---

  Arms and related materials embargo is a type of sanction that prohibits the supply, sale, transfer, or export of arms and related materials to a targeted country, entity, or individual. This type of sanction is most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons, as it aims to reduce the availability and access of weapons and ammunition that could fuel violence and instability. Arms and related materials embargo can also prevent the transfer of weapons of mass destruction and their delivery systems to non-state actors or rogue states. According to the UN, arms and related materials embargo is one of the most common and effective forms of sanctions that the Security Council imposes to address threats to international peace and security12. References: 1: Different types of sanctions - Consilium1 2: UN Sanctions and the Prevention of Conflict - United Nations University2 https://collections.unu.edu/eserv/UNU:6431/UNSanctionsandPreventionConflict-Aug-2017.pdf (3)

• Question 405:

  Which activities could be considered a potential spear phishing scam? (Choose three.)

  A. Members of a religious organization receive a donation request by email claiming to be from their leader.
  B. Payroll receives an external email from an employee looking to update their bank account information.
  C. A courier delivers a business a duplicate invoice that contains updated payment details of an existing supplier.
  D. An employee receives an email that asks to download an attachment, but the attachment is a malware.
  E. An employee receives a phone call requesting that money be sent to assist someone in trouble.
  F. A business sends its employees an email warning that email passwords must be changed to prevent cyber-fraud.
  A. Members of a religious organization receive a donation request by email claiming to be from their leader.
  B. Payroll receives an external email from an employee looking to update their bank account information.
  C. A courier delivers a business a duplicate invoice that contains updated payment details of an existing supplier.

• Question 406:

  A US casino customer has won 55,518 USD. The customer goes to the casino cashier cage to execute some transactions. Which ^transactions are an indicator of money laundering? (Select Two.)

  A. The customer transfers 100.000 USD to another personal bank account located outside the customer's resident country,
  B. The customer requests the cashing out of the winnings in checks under 10.000 USD.
  C. The customer transfers all the winnings to another personal bank account located outside the customer's resident country.
  D. The customer requests the cashing out of the winnings in a single check.
  E. The customer transfers 50.000 USD to another personal bank account located in the customer's resident country.
  A. The customer transfers 100.000 USD to another personal bank account located outside the customer's resident country,
  B. The customer requests the cashing out of the winnings in checks under 10.000 USD.

  ---

  These options involve transferring funds to another country, which could indicate cross-border movement of illicit funds, and cashing out winnings in checks under 10,000 USD, which could indicate structuring to avoid reporting thresholds. The other options do not seem as suspicious or relevant to money laundering.

• Question 407:

  a personal banking customer who simultaneously opens several accounts will most likely cause further inquiry in which of the following scenarios?

  A. A personal account and a corporate account.
  B. An individual account and a joint spousal account.
  C. Accounts with almost identical names.
  D. A checking and a savings account.
  C. Accounts with almost identical names.

  ---

  A personal banking customer who simultaneously opens several accounts with almost identical names will most likely cause further inquiry, as this could indicate an attempt to evade transaction monitoring, reporting, or identification requirements. For example, a customer could open accounts with slight variations of their name, such as John Smith, Jon Smith, J. Smith, or John Smyth, to avoid detection or aggregation of their transactions. This could also be a sign of identity theft, fraud, or money muling. Therefore, the bank should verify the customer's identity and the purpose of the accounts, and monitor the activity for any suspicious patterns or behaviors. References: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4, Section 4.2.2, p. 1051 ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 2, Task 2.1, p. 52 FATF Guidance on the Risk-Based Approach for the Banking Sector, October 2014, p. 353

• Question 408:

  Which is a key reason why a financial institution (FI) conducts an enterprise-wide AML risk assessment?

  A. The need to assess money laundering and terrorist financing risks and ensure there are adequate controls to mitigate those risks.
  B. The identification of specific risk categories (i.e., export, inactivity, layman, and false locations) unique to the bank.
  C. The need to understand its overall budget needs for each department and for internal audit.
  D. The board of directors and senior management are required to have an AML risk assessment for the bank.
  A. The need to assess money laundering and terrorist financing risks and ensure there are adequate controls to mitigate those risks.

  ---

  A key reason why a FI conducts an enterprise-wide AML risk assessment is to assess money laundering and terrorist financing risks and ensure there are adequate controls to mitigate those risks. An enterprise-wide AML risk assessment allows the FI to identify and appropriately manage the ML/TF and other illicit financial activity risks within its banking operations. It also helps the FI to establish global AML control standards and determine the effectiveness of its AML risk management program, including internal preventive and detective controls. By understanding its risk profile, the FI can better apply appropriate risk management processes to the BSA/AML compliance program to mitigate and manage risk and comply with BSA regulatory requirements. The BSA/AML risk assessment should provide a comprehensive analysis of the FI's ML/TF and other illicit financial activity risks, and should be documented in writing and communicated to all relevant stakeholders. References: 1: Enterprise Wide AML, CTF, Sanctions Risk Assessment (EWRA ... - Eloquens2 3: BSA/AML Risk Assessment - FFIEC BSA/AML3 2: ACAMS Study Guide for the CAMS Certification Examination2

• Question 409:

  Which of the following measures is one that the FATF recommends that Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) take to mitigate risks arising from business relationships with foreign politically exposed persons (PEPs) ?

  A. Subscribe to commercial databases to assist in the detection of PEPs.
  B. Raise transaction monitoring thresholds for PEP accounts in automated systems to account for higher transaction values and complex legal vehicles .
  C. Require approval from the prudential regulator for entering into or continuing the business relationship.
  D. Establish processes to understand the PEP's source of wealth and source of funds , and to refresh that understanding regularly.
  D. Establish processes to understand the PEP's source of wealth and source of funds , and to refresh that understanding regularly.

  ---

  PEPs pose higher risks for corruption and money laundering , requiring enhanced due diligence (EDD) . Option D (Correct): Understanding a PEP's source of wealth and funds ensures legitimacy of transactions . Option A (Incorrect): Commercial databases help identify PEPs but do not mitigate risk alone . Option B (Incorrect): Lowering monitoring thresholds, not raising them , helps detect suspicious activity. Option C (Incorrect): Regulatory approval is not required , but internal risk assessments are.

• Question 410:

  In May 2002, the Wolfsberg Principles on Private Banking were revised and included a section that prohibits the use of internal non-client accounts in a manner that would prevent officials from appropriate monitoring movements of funds or

  keep clients from being linked to the movement of funds on their behalf.

  What is another name for these internal, non-client accounts?

  A. Trust accounts
  B. Correspondent accounts
  C. Concentration accounts
  D. Pay through accounts
  C. Concentration accounts

  ---

  Concentration accounts are internal accounts used by financial institutions to aggregate funds from or for various clients or other accounts. They are also known as omnibus accounts or suspense accounts. The use of concentration accounts may obscure the audit trail and the identity of the clients involved in the transactions. Therefore, the Wolfsberg Principles on Private Banking, which are a set of voluntary guidelines for preventing money laundering and terrorist financing in the private banking sector, prohibit the use of concentration accounts in a way that would prevent appropriate monitoring or identification of the clients or their funds12. References: 1: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012), Section 4.3 2: The Wolfsberg Principles - an analysis, Journal of Money Laundering Control, Vol. 7 No. 3, 2004, pp. 237-240 Reference: http://www.wolfsbergprinciples.com/privat-banking.html (1.2.2, 5th bullet)