ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 521:

  On who does the ultimate responsibility for an institution's anti-money laundering program rest?

  A. The designated AML Compliance Officer
  B. The institution's Board of Directors
  C. All employees with customer contact
  D. The government regulator examining the AML program
  B. The institution's Board of Directors

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  According to the CAMS Certification Package - 6th Edition1, the ultimate responsibility for an institution's anti-money laundering program rests with the institution's board of directors. The board of directors is responsible for creating a culture of compliance, approving the AML policies and procedures, appointing the AML compliance officer, overseeing the implementation and effectiveness of the AML program, and ensuring adequate resources and training are provided to the staff. The board of directors is also accountable for any deficiencies or violations of the AML program and must take corrective actions when necessary. References: CAMS Certification Package - 6th Edition | ACAMS

• Question 522:

  What is a key objective of the Egmont Group?

  A. To find ways to promote the development of Financial Intelligence Units and the sharing of expertise.
  B. To safeguard the financial system from illicit use and combat money laundering and promote national security.
  C. To issue binding standards that establish consistently operated Financial Intelligence Units in member jurisdictions.
  D. To provide best practices for financial institutions on how to report suspicious activity to best share the information with law enforcement.
  A. To find ways to promote the development of Financial Intelligence Units and the sharing of expertise.

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  https://egmontgroup.org/en/content/about "The Egmont Group is a united body of 165 Financial Intelligence Units (FIUs). The Egmont Group provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and terrorist financing (ML/ TF). This is especially relevant as FIUs are uniquely positioned to cooperate and support national and international efforts to counter terrorist financing and are the trusted gateway for sharing financial information domestically and internationally in accordance with global Anti Money Laundering and Counter Financing of Terrorism (AML/CFT) standards.

• Question 523:

  What is the purpose of a Risk Appetite Statement (RAS) and its linkages while implementing organizational controls ? (Select Two.)

  A. An RAS formalizes a risk appetite statement from management and informs the Board of Directors on the risk assessment performed.
  B. An RAS establishes a desired level of risk exposure in qualitative terms, covering all areas of compliance.
  C. An RAS sets limits for risk-taking by means of quantitative and qualitative metrics so that the business does not take up risk in excess of the organization's risk tolerance.
  D. An RAS establishes a management-approved policy that identifies the organization's risk tolerances with strategic objectives, risk profile, and risk management capabilities.
  E. An RAS sets limits in terms of residual risk and thus is strongly intertwined with the efficacy of the system of internal controls.
  C. An RAS sets limits for risk-taking by means of quantitative and qualitative metrics so that the business does not take up risk in excess of the organization's risk tolerance.
  D. An RAS establishes a management-approved policy that identifies the organization's risk tolerances with strategic objectives, risk profile, and risk management capabilities.

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  A Risk Appetite Statement (RAS) defines an institution's acceptable level of risk-taking and aligns AML and financial crime controls with organizational strategy . Option C (Correct): An RAS sets clear limits for acceptable risk-taking , balancing risk and business opportunities . Option D (Correct): The RAS is a management-approved document that integrates risk tolerance, compliance strategy, and business goals . Why Other Options Are Incorrect: Option A (Incorrect): An RAS is not just a reporting document ; it actively shapes risk management decisions . Option B (Incorrect): An RAS includes both qualitative and quantitative factors , but not just qualitative elements . Option E (Incorrect): An RAS does not only define residual risk --it guides overall risk limits and policies. How an RAS Strengthens AML Compliance: Defines acceptable AML risk levels across business units. Guides compliance teams on risk tolerance for high-risk customers. Ensures alignment with FATF, regulatory expectations, and internal controls.

• Question 524:

  What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

  A. Allow for freezing assets of non-profit organizations
  B. Require all non-profit organizations to register with the country's financial intelligence unit
  C. Ensure non-profit organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations
  D. Create laws that forbid non-profit organizations from completing cross-border transactions without first running them through known terrorist data bases
  C. Ensure non-profit organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations

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  According to the Financial Action Task Force (FATF) 40 Recommendations, countries should implement measures to prevent the abuse of non-profit organizations (NPOs) for the financing of terrorism. One of these measures is to ensure that NPOs cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations. This means that countries should have effective mechanisms to monitor and supervise NPOs, especially those that are at risk of terrorist financing abuse, and to take appropriate actions against NPOs that are involved in such activities. Countries should also ensure that NPOs maintain adequate records of their activities and transactions, and that these records are accessible to competent authorities. Furthermore, countries should promote transparency and accountability in the NPO sector, and encourage NPOs to conduct due diligence on their donors, beneficiaries, and associates. References: FATF 40 Recommendations, Recommendation 8 and Interpretive Note to Recommendation 8 Best Practices on Combating the Abuse of Non-Profit Organisations, FATF, June 2015 COMBATING THE ABUSE OF NON-PROFIT ORGANISATIONS (RECOMMENDATION 8), FATF, June 2015 Reference: http://www.fatf-gafi.org/media/fatf/documents/reports/BPP-combating-abuse-non- profitorganisations.pdf(p.9)

• Question 525:

  An offshore company is owned by four equal partners that reside in separate jurisdictions. One partner presents an authenticated power of attorney apparently executed by the remaining three partners in his favor and requests that a bank account be opened on behalf of all partners. He needs this done quickly because there is a large deposit pending. The account-opening officer contacts the bank's anti-money laundering officer for advice. Which of the following should the anti-money laundering officer advise as an initial step?

  A. Verify the identity of all the partners.
  B. Verify the source of the deposit.
  C. File a suspicious transaction report with the appropriate Financial Intelligence Unit.
  D. File a suspicious transaction report with the Egmont Group.
  A. Verify the identity of all the partners.

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  The anti-money laundering officer should advise the account-opening officer to verify the identity of all the partners as an initial step. This is because opening a bank account for an offshore company with multiple owners from different jurisdictions poses a high risk of money laundering and terrorist financing. Therefore, the bank should apply enhanced due diligence measures to ensure that the offshore company and its owners are legitimate and not involved in any criminal activities. One of the key measures is to verify the identity of all the partners, not just the one who presents the power of attorney. This will help the bank to establish the beneficial ownership and control structure of the offshore company, as well as to detect any possible fraud, forgery, or coercion in the power of attorney document. The bank should also verify the authenticity and validity of the power of attorney, and the scope and purpose of the authority granted to the partner who requests the account opening. The other options are less important or irrelevant as initial steps. Verifying the source of the deposit is also a part of the enhanced due diligence process, but it should be done after verifying the identity of the partners and the offshore company. Filing a suspicious transaction report with the appropriate Financial Intelligence Unit or the Egmont Group is a possible action that the bank may take if it detects any indicators of money laundering or terrorist financing in the account opening process, but it is not an initial step. The Egmont Group is an international network of Financial Intelligence Units that facilitates information exchange and cooperation, but it is not a reporting authority. References: ACAMS Study Guide, Chapter 3: Customer Identification and Verification, 1 ACAMS Study Guide, Chapter 4: Customer Risk Assessment, 2 ACAMS Study Guide, Chapter 5: Ongoing Monitoring, 3 Powers of attorney: opening a bank account, 4

• Question 526:

  The anti-money laundering specialist of a small bank has identified suspicious activity at a branch located in an area of town where drug dealers are known to operate. An investigation of this activity discloses that the suspicious transactions occurred within the last 3 months and were processed by the same teller (cashier). The teller (cashier) did not file an internal report of unusual activity on these transactions. When checking personnel files, the specialist finds that the teller (cashier) has been a trusted employee for over 15 years, has an impeccable work record, and has participated in several anti-money laundering training sessions. The specialist recently became aware that the employee's daughter has

  contracted a rare disease and is undergoing a very expensive treatment program. Regarding the teller's (cashier's) failure to report the unusual activity to the institution, the specialist should recommend

  A. Continuing to monitor the accounts.
  B. Refreshing anti-money laundering training for the teller (cashier).
  C. Directing the teller (cashier) to file a suspicious transaction report.
  D. Suspending the teller's (cashier's) employment.
  C. Directing the teller (cashier) to file a suspicious transaction report.

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  The specialist should recommend directing the teller (cashier) to file a suspicious transaction report (STR). This is because the teller (cashier) has failed to comply with the bank's internal policies and procedures for reporting unusual or suspicious activity, which is a key component of an effective anti-money laundering (AML) program1. The teller (cashier) should have filed an internal report of unusual activity as soon as he or she noticed the suspicious transactions, regardless of the personal circumstances or the length of service of the customer involved2. Failing to do so could expose the bank to regulatory sanctions, reputational damage, or legal liability3. The other options are not appropriate recommendations for the specialist to make in this situation. Continuing to monitor the accounts is not sufficient, as it does not address the past non-compliance or the potential money laundering risk posed by the suspicious transactions. Refreshing anti-money laundering training for the teller (cashier) is not enough, as it does not ensure that the teller (cashier) will report the suspicious transactions or prevent future violations. Suspending the teller's (cashier's) employment is too harsh, as it does not take into account the teller's (cashier's) long and exemplary work record, the personal hardship faced by the teller's (cashier's) family, or the possibility of remedial actions or corrective measures4. References: 1: Internal Controls | FinCEN.gov1 2: Reporting Suspicious Transactions - ACAMS2 3: The Consequences of Non-Compliance with AML Regulations - Blog | Unit213 4: Employee Discipline in the Workplace: A Guide for Managers4

• Question 527:

  Which red flag is most relevant to money laundering through capital markets ?

  A. A low-priced security sees a sudden spike in investor demand with a rising price.
  B. A security sees a transactional pattern of a steady decrease in both trading volume and prices.
  C. A firm sees an unexpected increase in demand for electronically traded funds.
  D. A trading customer maintains a portfolio of securities concentrated in one specific emerging market.
  A. A low-priced security sees a sudden spike in investor demand with a rising price.

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  Money laundering through capital markets often involves pump-and-dump schemes, wash trading, and layering funds through rapid trading activity . Option A (Correct): A sudden spike in demand for a low-priced security is a red flag for pump- and-dump schemes , where criminals manipulate the market to inflate stock prices artificially before selling off shares for a profit . Option B (Incorrect): A gradual decline in trading volume and price does not indicate suspicious activity related to money laundering. Option C (Incorrect): An increase in demand for ETFs is common and not necessarily linked to money laundering. Option D (Incorrect): Holding securities in one specific emerging market may indicate a geographic investment strategy, not necessarily money laundering. Common Money Laundering Typologies in Capital Markets: Pump-and-Dump Schemes ?Fraudulently inflating stock prices to cash out illicit funds. Wash Trading ?Conducting self-trades to create an illusion of high market activity. Layering Funds Through Rapid Trading ?Engaging in frequent buy-and-sell orders to obfuscate the origin of funds. Best Practices for AML in Capital Markets: Monitor unusual trading volume and price fluctuations. Use AI-driven surveillance systems to detect manipulative behavior. Investigate transactions involving offshore brokers or shell entities.

• Question 528:

  Which statement regarding data privacy in AML investigations is the most accurate?

  A. Financial Intelligence Units (FIUs) should document purposes for which personal data included on Suspicious Activity Reports (SARs) may be shared with other agencies.
  B. Any customer that is the subject of a suspicious report filing has the right to request redaction of their personal data.
  C. Data privacy laws prohibit information sharing between financial institutions for the purposes of AML investigations in all jurisdictions.
  D. Organizations are required to demonstrate that customers have opted into information sharing before submitting SARs to relevant Financial Intelligence Units (FIUs).
  A. Financial Intelligence Units (FIUs) should document purposes for which personal data included on Suspicious Activity Reports (SARs) may be shared with other agencies.

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  AML compliance must be balanced with data privacy laws , including GDPR (EU), CCPA (U.S.), and banking secrecy regulations . Option A (Correct): FIUs must document why and how personal data in SARs is shared with law enforcement or regulators. Option B (Incorrect): SAR subjects cannot request redaction --SARs are confidential to avoid "tipping off" the suspect. Option C (Incorrect): Many jurisdictions allow AML-related information sharing , particularly under FATF guidance . Option D (Incorrect): SARs do not require customer consent --they are filed based on legal obligations. Key Data Privacy Considerations in AML Investigations: GDPR Article 6 permits data processing for AML compliance. Banking secrecy laws have exemptions for AML disclosures. FIUs must document SAR handling procedures for legal compliance. Best Practices for Managing Data Privacy in AML: Limit data collection to what is necessary for AML compliance. Ensure SAR information is only shared with authorized agencies. Comply with local and international data privacy laws.

• Question 529:

  In general, what is an element that a financial institution or business does not have to specifically address in an anti-money laundering program?

  A. A system of internal policies, procedures and controls
  B. A designated compliance officer with day-to-day oversight over the AML program
  C. An ongoing employee training program
  D. A description of its OFAC program to address government watch list screening
  D. A description of its OFAC program to address government watch list screening

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  According to the Bank Secrecy Act (BSA), a financial institution or business must establish an anti-money laundering (AML) program that includes at least four elements: (a) a system of internal policies, procedures and controls to prevent, detect and report money laundering and other illicit activities; (b) a designated compliance officer who is responsible for overseeing the implementation and effectiveness of the AML program;?an ongoing employee training program that covers the legal and regulatory obligations, the risks and red flags of money laundering, and the roles and responsibilities of the staff in the AML program; and (d) an independent audit function that tests and evaluates the adequacy and compliance of the AML program. While the Office of Foreign Assets Control (OFAC) is a key agency that enforces economic and trade sanctions against targeted foreign countries, entities and individuals, it is not part of the BSA or the AML program requirements. However, financial institutions and businesses are expected to comply with OFAC regulations and screen their customers and transactions against the OFAC lists of sanctioned parties. Failure to do so may result in civil or criminal penalties. Therefore, it is advisable for financial institutions and businesses to have an OFAC program that is integrated with their AML program, but it is not a mandatory element that they have to specifically address in their AML program. References: 1: Financial Crimes Enforcement Network (2020). Anti-Money Laundering Programs 2: ACAMS (2020). CAMS Certification Package (6th Edition) 3: Office of Foreign Assets Control (2023). Sanctions Programs and Country Information 4: Moses and Singer LLP (2023). Anti-Money Laundering, Bank Secrecy and OFAC Regulations

• Question 530:

  A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

  A. US sanctions
  B. Loss of tax revenue
  C. Increased organized crime and corruption
  D. Reputation risk for the port
  C. Increased organized crime and corruption

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  Predicate offenses are the criminal activities that generate the proceeds that are later laundered through money laundering schemes. A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer from increased organized crime and corruption, as criminals would have more opportunities and incentives to engage in illicit activities and evade detection and punishment. Organized crime and corruption can have serious social and economic consequences for a country, such as undermining the rule of law, eroding public trust, threatening national security, harming human rights, reducing economic growth, and distorting market competition.