ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 511:

  What is an essential element of Know Your Customer (KYC) standards according to the Basel Committee's Customer Due Diligence for Banks paper?

  A. Annual staff training
  B. A customer acceptance policy
  C. The same KYC requirements must be applied in all cases
  D. All completed KYC documents must be reviewed by a senior manager not involved in the account opening process
  B. A customer acceptance policy

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  The correct answer is B, as a customer acceptance policy is an essential element of KYC standards according to the Basel Committee's Customer Due Diligence for Banks paper1. A customer acceptance policy defines the types of customers that the bank is willing to accept, and the conditions and limitations that apply to such relationships. A customer acceptance policy helps the bank to avoid customers who are likely to pose a higher than average risk of money laundering or terrorist financing, or who are not willing to provide sufficient information for identification and verification purposes1. References: 1: Customer due diligence for banks - Bank for International Settlements, page 9. Reference: https://www.bis.org/publ/bcbs77.pdf

• Question 512:

  A customer comes into the bank and appears to be ill-at-ease waiting in the teller line. When the customer gets to the teller, he become exceedingly nervous and asks for a large cashier's check to be cashed and disbursed to him in $100 bills.

  What should the teller do after completing the transaction?

  A. Confer with the bank' s account going forward
  B. File a SAR on the customer
  C. Monitor the customer's account going forward
  D. File a CTR on the customer by the end of the day
  C. Monitor the customer's account going forward

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  A customer who is nervous, uneasy, or in a hurry to cash a large cashier's check may be trying to launder money or evade reporting requirements. The teller should complete the transaction as normal, but also flag the customer's account for further monitoring and review. The teller should look for any unusual or suspicious patterns of activity, such as frequent large cash transactions, transfers to or from high-risk jurisdictions, or transactions that do not match the customer's profile or expected behavior. The teller should also document the transaction and the customer's demeanor, and report any findings or concerns to the appropriate authority within the bank. The teller should not confer with the bank's account going forward, as this may alert the customer to the bank' s suspicion or compromise the investigation. The teller should not file a SAR on the customer, unless there are other grounds to suspect money laundering or terrorist financing, as this may be premature or unnecessary. The teller should not file a CTR on the customer by the end of the day, unless the transaction exceeds the threshold of $10,000, as this is a legal requirement for cash transactions in the US.

• Question 513:

  A professional dealer in precious metals and stones in an EU country plans to implement measures to reduce the risk of being misused for money laundering purposes. Which measures are most relevant for achieving this goal? (Select Two.)

  A. Only accept trades related to precious metal pool accounts maintained by sophisticated precious metal companies.
  B. Stop accepting payments from persons other than the beneficiary.
  C. Limit direct contact between customer and employees.
  D. Limit the acceptance of purchases without adequate customer identification information.
  E. Stop accepting cash payments in currencies other than Euro.
  B. Stop accepting payments from persons other than the beneficiary.
  D. Limit the acceptance of purchases without adequate customer identification information.

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  The two most relevant measures for a professional dealer in precious metals and stones to reduce the risk of being misused for money laundering purposes are: B. Stop accepting payments from persons other than the beneficiary: This measure can help to ensure that the source of funds is legitimate and can be traced back to the customer. D. Limit the acceptance of purchases without adequate customer identification information: Adequate customer identification information is necessary for the purpose of identifying and verifying the customer's identity and determining whether the customer is a politically exposed person (PEP) or has any other risk characteristics that may require enhanced due diligence measures.

• Question 514:

  Which is an extraterritorial function of Office of Foreign Assets Control sanctions?

  A. Interrupting the Ell's economic and financial relations with third countries
  B. Implementing targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions
  C. Prohibiting transactions and requiring the blocking of assets of designated persons and organizations
  D. Requiring all appropriate elements of the financial services industry to report potential money laundering
  C. Prohibiting transactions and requiring the blocking of assets of designated persons and organizations

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  The Office of Foreign Assets Control (OFAC) sanctions are extraterritorial in nature, meaning that they apply beyond the national borders of the United States. OFAC sanctions are intended to restrict transactions and the movement of assets between the U.S. and designated persons and organizations. These sanctions are imposed to disrupt the economic and financial relations between foreign countries and designated persons, organizations, or countries. These sanctions include prohibiting transactions, requiring the blocking of assets, and implementing targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions.

• Question 515:

  According to the USA PATRIOT Act, under which condition would US financial institutions (Fls) maintain correspondent accounts for foreign shell banks?

  A. US Fls cannot maintain correspondent bank accounts for foreign shell banks.
  B. US Fls can open correspondent bank accounts for foreign shell banks but only in certain countries.
  C. US Fls must undertake a rigorous, risk-based approval process to open correspondent bank accounts for foreign shell banks.
  D. US Fls must be certified by the Financial Action Task Force to maintain correspondent accounts for foreign shell banks.
  A. US Fls cannot maintain correspondent bank accounts for foreign shell banks.

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  According to section 313 of the USA PATRIOT Act, a covered financial institution (generally any U.S. bank or broker dealer in securities) is prohibited from establishing, maintaining, administering, or managing a correspondent account in the U.S. for, or on behalf of, a foreign shell bank. A foreign shell bank is defined as a foreign bank that does not have a physical presence in any country. The only exception to this prohibition is if the foreign shell bank is a regulated affiliate of a depository institution, credit union, or foreign bank that maintains a physical presence in the U.S. or a foreign country, respectively. In that case, the U.S. financial institution must obtain a written certification from the foreign bank that it does not provide banking services to any other foreign shell banks.

• Question 516:

  The Board of Directors for a small private bank has asked the management to no longer apply the identity requirements for high net worth individuals to protect their privacy. Which of the following Financial Action Task =once 40 Recommendations should cause an anti-money laundering specialist the most concern?

  A. Financial institutions should not warn their customers when information relating to them is being reported to the competent authorities.
  B. Financial institutions should not keep anonymous accounts.
  C. Financial institutions should maintain all necessary suspicious transaction report records on transactions, both domestic are international, for at least 5 years.
  D. If financial institutions suspect that funds stem from criminal activity, they should be required to close the account.
  C. Financial institutions should maintain all necessary suspicious transaction report records on transactions, both domestic are international, for at least 5 years.

• Question 517:

  An example of an external factor that will affect an organization's AML risk is:

  A. acceptance of new customer types.
  B. political system changes in a specific jurisdiction.
  C. introduction of a new product which will be offered to a wide range of clients.
  D. introduction of mobile banking for all clients.
  B. political system changes in a specific jurisdiction.

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  Political system changes can have an impact on an organization's AML risk as they can affect the legal and regulatory framework in which the organization operates. For example, changes to the laws or regulations related to AML, or changes in the way in which the government enforces AML regulations, can have an impact on the organization's AML risk by increasing or decreasing the likelihood of it being exposed to AML risk. In addition, changes in the political environment or political stability in a specific jurisdiction can also affect the organization's AML risk.

• Question 518:

  While conducting a review of a medium-risk customer, an analyst noted that a newly added authorized signatory is a foreign politically exposed person (PEP). Which is the appropriate next step for the analyst to take?

  A. Review beneficial ownership to finalize the risk category of the customer.
  B. Remove the PEP as the authorized signatory.
  C. Re-categorize the customer as high-risk.
  D. Categorize the authorized PEP signatory as high-risk.
  A. Review beneficial ownership to finalize the risk category of the customer.

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  According to the FATF Guidance on Politically Exposed Persons1, financial institutions should assess the money laundering and terrorist financing risks associated with a business relationship or transaction with a PEP, their family members and close associates, on a case-by-case basis. This includes obtaining information on the source of wealth and source of funds of the customer and the beneficial owner, as well as conducting enhanced ongoing monitoring of the business relationship. Therefore, the appropriate next step for the analyst is to review the beneficial ownership of the customer to determine if the PEP or any other person poses a higher risk, and to apply additional measures accordingly. Removing the PEP as the authorized signatory, re- categorizing the customer as high-risk, or categorizing the authorized PEP signatory as high-risk are not necessarily required or sufficient steps, as they do not take into account the specific circumstances and risk factors of the customer and the PEP.

• Question 519:

  A student contacts a real estate broker to view a home but cancels last minute due to illness. The student wants to quickly buy the 800,000 USD home, which is overvalued, despite the broker's objections to the asking price. Which real estate red flags should the broker identify? (Select Three.)

  A. Anonymity
  B. Structuring
  C. Value
  D. Flow through
  E. Inconsistency
  F. Transaction speed
  C. Value
  E. Inconsistency
  F. Transaction speed

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  The scenario described in the question presents several indicators of potential money laundering through real estate, which the broker should be aware of and report accordingly. The most relevant red flags are: Value: The student wants to buy a home that is overvalued, meaning that the asking price is higher than the market value or the appraisal value of the property. This could indicate that the student is trying to launder a large amount of illicit funds in one transaction, or that the seller is colluding with the student to inflate the price and receive a kickback. Overvaluing or undervaluing properties is a common technique used by money launderers to manipulate the price of real estate and conceal the source or destination of their funds. Inconsistency: The student's behavior and profile are inconsistent with the typical characteristics of a legitimate home buyer. The student cancels the viewing of the home at the last minute due to illness, which could suggest a lack of interest or a pretext to avoid scrutiny. The student also wants to buy an expensive home despite being a student, which could indicate a discrepancy between the student's income and the source of funds. Moreover, the student disregards the broker's objections to the asking price, which could imply that the student is not concerned about the value or quality of the property, but rather the amount of money that can be laundered through it. Transaction speed: The student wants to quickly buy the home, which could indicate a sense of urgency or pressure to move the illicit funds before they are detected or seized by the authorities. Money launderers often use fast transactions to avoid raising suspicion or leaving a paper trail. Transaction speed is especially relevant when combined with other red flags, such as cash payments, anonymous buyers, or overvalued properties.

• Question 520:

  When and how should an institution appraise the AML risk of a newly developed product? Choose 3 answers

  A. The institution should request the Compliance Officer to review and evaluate the AML risk prior to the product going live
  B. The institution should roll the product out on a preliminary basis to determine what risks develop with regard to the product
  C. The institution should review previous administrative actions to determine if the product has created problems for other institutions
  D. The institution should evaluated where, how and to what extent the product is going to be used
  A. The institution should request the Compliance Officer to review and evaluate the AML risk prior to the product going live
  B. The institution should roll the product out on a preliminary basis to determine what risks develop with regard to the product
  D. The institution should evaluated where, how and to what extent the product is going to be used