ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 531:

  Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire transfer isdeemed suspicious by Bank A.

  A. The transaction in Country A.
  B. Bank B in Country A.
  C. The transaction in Country B.
  D. Bank C in Country C.
  A. The transaction in Country A.

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  According to the BSA/AML Manual1, a financial institution is required to file a SAR for any transaction conducted or attempted by, at, or through the institution that involves or aggregates at least $5,000 in funds or other assets, and the institution knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part): (a) involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity; (b) is designed to evade any requirements of the BSA or its implementing regulations; ?has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or (d) involves use of the institution to facilitate criminal activity. In this case, Bank A is the institution that processes the wire transfer and deems it suspicious, based on its own assessment of the transaction and the customer. Therefore, Bank A is responsible for filing a SAR for the transaction in Country A, where it is located and where the transaction takes place. Bank A does not need to file a SAR for the transaction in Country B or Country C, as it does not have jurisdiction or authority over those countries or the other banks involved. However, Bank A may share information about the suspicious transaction with Bank B or Bank C, subject to certain conditions and limitations, as described in the BSA/AML Manual1. References: BSA/AML Manual1 Suspicious Activity Reporting - Overview2 Suspicious Activity Report (SAR) Basics3 From Microsoft Start Partners Another simpler way of looking at the problem is by seeing this case as a Correspondent Banking relationship: -A is the primary correspondent bank. -B is the respondent bank. -C is the receiving bank (of the wire transfer). Since A is conducting the transaction on behalf of B's customer via the correspondent relationship deemed suspicious, it is the transaction in Country A by the correspondent bank that files the STR. Also, per the regular process, it is on the transaction, not the bank, that the STR is filed against.

• Question 532:

  An anti-money laundering specialist at a large institution is responsible for information senior management about the status of the anti-money laundering program across the organization. Which report is the most useful?

  A. The total credit exposure for non-cooperative countries and territories
  B. Results of related audits and examinations
  C. Details on inquires received from law enforcement
  D. Notification of management changes in the different major divisions
  B. Results of related audits and examinations

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  Results of related audits and examinations are the most useful report for an anti-money laundering specialist to inform senior management about the status of the anti-money laundering program across the organization. This is because audits and examinations provide an independent and objective assessment of the effectiveness, efficiency, and compliance of the anti-money laundering program, as well as identify any gaps, weaknesses, or areas for improvement. Audits and examinations can also help senior management to monitor the performance of the anti-money laundering program, ensure accountability and oversight, and demonstrate commitment to regulatory expectations and best practices. References: Anti-Money Laundering Preparedness Survey Report 2020 - Deloitte US, page 4. CAMS Study Guide 6th Edition, page 39.

• Question 533:

  A bank in the Netherlands has been requested to share information about a series of transactions and related customers with a bank in Italy . Both banks are subject to European Union jurisdiction . Which factor is the most important to consider before the Dutch bank shares the requested information with the Italian bank?

  A. The Dutch bank's legal obligations to protect customer privacy and bank secrecy prohibit it from sharing any such information.
  B. The Dutch bank should require a production order from the Italian bank and receive approval from its legal department before sharing the requested information.
  C. The need to fight financial crime outweighs the EU's data protection and privacy regulations .
  D. The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate , in line with applicable laws and regulations.
  D. The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate , in line with applicable laws and regulations.

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  Banks within the EU must comply with AML laws and data privacy regulations before sharing customer data. Option D (Correct): Information sharing should be limited to what is necessary and proportionate , following GDPR and AMLD regulations. Option A (Incorrect): AML laws allow information-sharing in certain cross-border investigations . Option B (Incorrect): While legal review is necessary , a production order is not always required for AML-related information sharing . Option C (Incorrect): Data protection laws (e.g., GDPR) must still be respected , even in financial crime investigations.

• Question 534:

  A benefit of using bearer shares in corporate formations is that bearer shares are:

  A. widely accepted in the financial world.
  B. entered in the register of owners.
  C. associated with lower costs in setting up a company.
  D. easily transferred so the holder claims ownership.
  D. easily transferred so the holder claims ownership.

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  Bearer shares are unregistered equity securities owned by the possessor of the physical share documents. The issuing company does not record the identity or ownership of the shareholders, nor does it track the transfers of ownership. This means that the holder of the bearer share can claim ownership and exercise the rights associated with the share, such as voting and receiving dividends, by simply presenting the physical certificate. This also makes the transfer of ownership very easy, as it only requires the delivery of the physical document, without any formalities or intermediaries. Bearer shares are therefore attractive for those who seek anonymity, privacy, and flexibility in their corporate structures. References: Investopedia: Bearer Share SuperMoney: Bearer Shares: Definition, Examples, and Implications ACAMS: Bearer Shares

• Question 535:

  Which of the following is a red flag indicating potential money laundering or terrorism financing through dealers of precious metals or high-value items ?

  A. A customer wants to purchase gold bars with a combination of cash and cryptocurrency.
  B. A customer pays an antique dealer with a credit card for a high-value antique item.
  C. A customer wants a handwritten receipt for a cash purchase of a high-end, limited-edition luxury watch.
  D. A customer specifically requests to purchase a Kimberly Process-certified cut diamond .
  C. A customer wants a handwritten receipt for a cash purchase of a high-end, limited-edition luxury watch.

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  Money launderers use high-value goods (e.g., jewelry, art, and precious metals) to disguise illicit funds . Option C (Correct): Requesting a handwritten receipt for a cash purchase suggests an attempt to avoid record-keeping , a known money laundering technique . Option A (Incorrect): Buying gold bars with cash and cryptocurrency is unusual but not inherently illegal unless the amounts are suspicious. Option B (Incorrect): Credit card payments are traceable and do not raise immediate red flags . Option D (Incorrect): Kimberly Process-certified diamonds are legally sourced, and requesting them does not indicate suspicious intent .

• Question 536:

  After several months of research, the Director of Marketing and the Managing Director of Business Development received approval to launch a branded, stored-value card that will be marketed to the diverse, primarily non-resident population that comprises the bank's current customer demographics. The Chief Credit Officer and the Risk Officer have also been involved in the efforts to develop the card. After the card is launched, the anti-money laundering officer is consulted. The anti-money laundering officer should advise the bank that compliance should have been involved

  A. After product development to confer with the legal department.
  B. After product development to perform an assessment of the product.
  C. During product development to develop reports for the Board.
  D. During product development to perform a risk assessment of the product.
  D. During product development to perform a risk assessment of the product.

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  The anti-money laundering officer should advise the bank that compliance should have been involved during product development to perform a risk assessment of the product. This is because stored-value cards are considered high-risk products for money laundering and terrorist financing, as they can be used to store, transfer, or access funds anonymously, across borders, or through third parties. A risk assessment would help the bank identify and mitigate the potential vulnerabilities and threats associated with the product, such as customer due diligence, transaction monitoring, record keeping, reporting, and training. A risk assessment would also help the bank comply with the regulatory requirements and expectations for offering such products, as well as the industry best practices and standards. References: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 5, Section 5.3.2, p. 140-1411 ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 1, Task 1.1, p. 42 FATF Guidance on the Risk-Based Approach for Prepaid Cards, Mobile Payments and Internet-Based Payment Services, June 2013, p. 9-103

• Question 537:

  Which of the following corporate structures present a higher money laundering risk due to reduced transparency ? (Select Three.)

  A. A company with nominee shareholders and directors in a local jurisdiction.
  B. A private company with no activity in a tax haven jurisdiction.
  C. A company with bearer shares incorporated in a tax haven jurisdiction.
  D. A limited liability company (LLC) incorporated in a foreign jurisdiction .
  E. A private investment company incorporated in a tax haven jurisdiction with strict secrecy laws .
  A. A company with nominee shareholders and directors in a local jurisdiction.
  C. A company with bearer shares incorporated in a tax haven jurisdiction.
  E. A private investment company incorporated in a tax haven jurisdiction with strict secrecy laws .

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  Money launderers exploit corporate structures that offer anonymity and reduced transparency . Option A (Correct): Nominee shareholders and directors can be used to hide true beneficial ownership . Option C (Correct): Bearer shares allow ownership to transfer anonymously , a major AML risk . Option E (Correct): Tax haven companies with secrecy laws are frequently used for money laundering . Option B (Incorrect): A private company without activity does not inherently pose an AML risk . Option D (Incorrect): LLCs can be transparent if proper KYC and reporting measures are in place.

• Question 538:

  Which factors should lead to a reassessment of the current AML program? (Select Two.)

  A. Expansion of business to new territories
  B. Appointment of a new Chief Financial Officer
  C. Change of company name
  D. Change of internal audit team members
  E. New product offering
  A. Expansion of business to new territories
  E. New product offering

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  According to the ACAMS CAMS Study Guide, 6th Edition, Chapter 2, Section 2.1, the AML program should be reassessed periodically or when there are significant changes in the business environment, such as: Expansion of business to new territories: This could expose the business to new risks, regulations, and customers that require different AML policies, procedures, and controls. The AML program should be updated to reflect the new jurisdictions and their AML requirements, as well as to conduct appropriate risk assessments and due diligence on the new markets and customers. New product offering: This could introduce new vulnerabilities, opportunities, and challenges for the AML program. The AML program should be revised to incorporate the new product features, benefits, and risks, as well as to ensure compliance with any applicable AML rules and standards for the new product. The other options are not factors that would necessarily lead to a reassessment of the current AML program, unless they have a material impact on the AML risks, objectives, or performance of the business: Appointment of a new Chief Financial Officer: This could affect the AML program if the new CFO has a different vision, strategy, or approach to AML than the previous one, or if the new CFO has a significant role or responsibility in the AML program. However, the appointment of a new CFO alone does not trigger a reassessment of the AML program, unless there are other changes or issues that warrant a review. Change of company name: This could affect the AML program if the change of name reflects a change of ownership, structure, or nature of the business that could alter the AML risks, obligations, or expectations. However, the change of name alone does not necessitate a reassessment of the AML program, unless there are other implications or consequences that affect the AML program. Change of internal audit team members: This could affect the AML program if the new internal audit team members have different qualifications, skills, or experiences than the previous ones, or if the new internal audit team members have a different scope, methodology, or frequency of auditing the AML program. However, the change of internal audit team members alone does not require a reassessment of the AML program, unless there are other factors or findings that indicate a need for a review.

• Question 539:

  Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers

  A. Persons residing in a having funds from countries with inadequate AML standards
  B. Persons engaged in business activities known to be susceptible to money laundering
  C. Persons who receive funds from a correspondent banking relationship
  D. Persons determined to be Politically Exposed Persons (PEPs)
  A. Persons residing in a having funds from countries with inadequate AML standards
  B. Persons engaged in business activities known to be susceptible to money laundering
  D. Persons determined to be Politically Exposed Persons (PEPs)

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  According to the Wolfsberg Principles on Private Banking, the bank should apply additional diligence to customers who present a higher risk of money laundering or other financial crimes. Some of the indicators for defining such customers are: Persons residing in or having funds from countries with inadequate AML standards, sanctions, embargoes, or other measures that indicate a higher risk of money laundering or terrorist financing12. Persons engaged in business activities known to be susceptible to money laundering, such as cash- intensive businesses, gambling, arms trade, precious metals and stones, art and antiquities, etc13. Persons determined to be Politically Exposed Persons (PEPs), who are individuals who hold or have held positions of public trust or influence, or their family members or close associates, and who may pose a higher risk of corruption, bribery, or abuse of power14. Persons who receive funds from a correspondent banking relationship are not necessarily required additional diligence, unless they fall under any of the above categories or other risk factors. Correspondent banking is a service provided by one bank to another bank to facilitate cross-border transactions, and it is subject to its own set of AML standards and due diligence measures5. References: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012) 1 FATF High-Risk and Other Monitored Jurisdictions FATF Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals FATF Guidance on Politically Exposed Persons (Recommendations 12 and 22) FATF Guidance on Correspondent Banking Services

• Question 540:

  Which payment method for purchasing luxury items is a red flag for potential money laundering?

  A. Personal loan
  B. Cash
  C. Wire transfer
  D. Credit card
  B. Cash

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  According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1]. Reference: [1] Financial Action Task Force. (2013). Money Laundering and Terrorist Financing Through the Real Estate Sector. https://www.fatf-gafi.org/media/fatf/documents/reports/ML-TF-through-real-estate.pdf