ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 561:

  A bank received a subpoena regarding one of its clients. The financial intelligence unit of the bank should review the subpoena and:

  A. adjust the client's risk score and close the case.
  B. file a suspicious activity report (SAR), including the receipt of the subpoena in the SAR narrative.
  C. close the client's account by informing the client of the subpoena.
  D. perform a transaction review and respond fully to the subpoena.
  D. perform a transaction review and respond fully to the subpoena.

  ---

  A subpoena is a legal order that requires a person or an entity to produce documents, information, or testimony related to a legal matter. A financial intelligence unit (FIU) is a specialized unit within a financial institution that is responsible for detecting, analyzing, and reporting suspicious activities and transactions. When a bank receives a subpoena regarding one of its clients, the FIU should review the subpoena and perform a transaction review to determine if there is any evidence of money laundering, terrorist financing, fraud, or other criminal activity involving the client. The FIU should also respond fully to the subpoena by providing the requested information and documents, unless there is a valid reason to object or seek a protective order. The FIU should not adjust the client's risk score, file a SAR, or close the client's account based solely on the receipt of the subpoena, as these actions may be premature, inappropriate, or illegal. Adjusting the client's risk score may require further investigation and due diligence. Filing a SAR may be unnecessary or misleading if the subpoena does not indicate any suspicious activity. Closing the client's account may violate the bank's contractual obligations, customer service standards, or anti-discrimination laws. Moreover, these actions may alert the client or the subject of the investigation to the existence of the subpoena, which may interfere with the legal process or jeopardize the safety of the bank or its employees.

• Question 562:

  An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country. The service allows customers to transfer funds through a

  mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is

  conducted at branch locations with identity verification.

  Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.)

  A. Customer onboarding
  B. Cross-border functionality
  C. Real time transfer of funds
  D. Servicing the under-banked population
  E. Limited access to counterparty information
  B. Cross-border functionality
  C. Real time transfer of funds
  E. Limited access to counterparty information

  ---

  The correct answer is B, C, and E, as these three present the highest anti-money laundering or sanctions risk and will require controls prior to launch. According to the FATF Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers1, P2P transactions pose significant challenges for AML/CFT compliance, as they may involve anonymous or pseudonymous parties, cross-border transfers, real-time settlement, and limited information on the beneficiaries. These factors increase the risk of money laundering, terrorist financing, and sanctions evasion, as well as the difficulty of detecting and reporting suspicious activity. Therefore, the institution should implement appropriate controls to mitigate these risks, such as: Conducting enhanced due diligence on customers who use the P2P service, especially if they are located in high-risk jurisdictions or are involved in high-risk activities1. Implementing transaction monitoring systems that can identify and flag unusual or suspicious patterns of behavior, such as large or frequent transfers, transfers to or from sanctioned entities or countries, or transfers that do not match the customer's profile or expected activity12. Applying the travel rule, which requires the originator and beneficiary VASPs (or financial institutions) to exchange and retain information on the parties involved in the transfer, such as their names, account numbers, addresses, and national identification numbers13. Establishing information-sharing and cooperation mechanisms with other VASPs, financial institutions, and regulators, to facilitate the exchange of relevant data and intelligence on P2P transactions and customers14. References: 1: Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers - FATF, page 13-16, 28-29, 32-33, 40-412: AML and Compliance Solution for The P2P Industry - Sanction Scanner3: P2P Money Laundering: How to Comply - ComplyAdvantage4: 2024 National Money Laundering Risk Assessment - U.S. Department of the Treasury, page 17.

• Question 563:

  According to the Financial Action Task Force (FATF) report on terrorism financing, charities and nonprofit organizations are often vulnerable to terrorist financing because they: (Select Two.)

  A. Have a global presence that provides a framework for national and international operations and financial transactions that are often in or near areas most exposed to terrorist activity.
  B. Are usually legitimate establishments and will not use the funds collected through donations for the profit of individuals or entities.
  C. Collect donations from various sources, and their primary objective is philanthropy and social well- being.
  D. Enjoy the public trust and have access to considerable sources of funds, and their activities are often cash-intensive.
  A. Have a global presence that provides a framework for national and international operations and financial transactions that are often in or near areas most exposed to terrorist activity.
  D. Enjoy the public trust and have access to considerable sources of funds, and their activities are often cash-intensive.

  ---

  Nonprofit organizations (NPOs) and charities are at risk of being exploited for terrorist financing due to their access to large sums of money and their operational reach into high-risk areas. FATF's Recommendation 8 specifically recognizes that terrorist organizations may misuse NPOs to raise and move funds, provide logistical support, or conceal the diversion of funds for illicit purposes. Option A (Correct): Many charities operate internationally, especially in areas with humanitarian crises. These regions often overlap with locations where terrorist organizations are active, making them vulnerable to abuse. Option D (Correct): Charities handle large volumes of cash and enjoy public trust, which makes it easier for illicit actors to integrate illicit funds without raising immediate suspicion. Option B (Incorrect): While charities are generally legitimate, the concern is that they can be exploited, not that they necessarily intend to misuse funds. Option C (Incorrect): Although collecting donations is a legitimate practice, it does not directly contribute to their vulnerability to terrorist financing.

• Question 564:

  A UK national has accounts with a bank in Belgium, who maintains a branch in New York. The UK national has been recently added and screened against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List. Which action should the Belgian bank take?

  A. Allow all transactions up to the limit imposed by OFAC and report the transactions to the local financial intelligence unit.
  B. Freeze the assets of the customer and report to OFAC.
  C. Close the account and ask the customer to send the funds to a bank account in the US.
  D. Continue performing transactions as the bank's headquarters is in Belgium.
  B. Freeze the assets of the customer and report to OFAC.

  ---

  The Belgian bank should freeze the assets of the customer and report to OFAC, as this is the required action for any US person or entity, or any person or entity within the US, that holds or controls property or interests in property of a person or entity on the OFAC Specially Designated Nationals and Blocked Persons List (SDN List). The SDN List is a list of individuals and entities that are subject to US sanctions and whose assets are blocked by OFAC. The Belgian bank, by maintaining a branch in New York, is subject to the jurisdiction and authority of OFAC, and must comply with its regulations and directives. Allowing transactions, closing the account, or continuing business as usual would violate the sanctions and expose the bank to civil and criminal penalties.

• Question 565:

  According to the Financial Crimes Enforcement Network, after an initial suspicious activity report has been filed for a customer, a financial institution must perform a continuing review of the account for a period of how many days?

  A. 30 days
  B. 60 days
  C. 90 days
  D. 120 days
  C. 90 days

  ---

  a financial institution must perform a continuing review of the account for a period of 90 days. The continuing review must include an analysis of any transactions that occur in the account, as well as any changes in the customer's risk profile. The review should be updated as needed to ensure that the customer is not engaging in any suspicious activities.

• Question 566:

  A typical red flag regarding potential money laundering in connection with an art purchase occurs when a customer:

  A. buys a painting as an anonymous bidder and provides the source of wealth.
  B. asks to pay in installments and pays from two differently named accounts.
  C. asks to pay a large amount in cash without a comprehensible reason.
  D. pays more at an auction for a painting than the estimated maximum price.
  C. asks to pay a large amount in cash without a comprehensible reason.

  ---

  Paying a large amount in cash for an art purchase is a typical red flag of potential money laundering, as it may indicate an attempt to avoid traceability and reporting requirements. Cash transactions are often used by criminals to launder illicit funds, as they are difficult to track and verify. According to the FATF guidance on money laundering and terrorist financing risks in the art trade, cash payments above a certain threshold should be subject to enhanced due diligence and reporting obligations by art market participants (AMPs). AMPs should also be wary of customers who provide insufficient or inconsistent information about the source of funds, the purpose of the transaction, or the identity of the beneficial owner.

• Question 567:

  How does the Egmont Group assist financial intelligence unit members to accomplish their goals? (Select Three.)

  A. Provides support to expand and systematize cooperation related to the reciprocal exchange of information
  B. Fosters better and secure communication through the application of technology
  C. Develops official lists of suspected terrorists on a globally coordinated basis by relevant authorities
  D. Encourages operational autonomy of financial intelligence units
  E. Maintains uniform global formats for funds transfers that assist in the detection of money laundering
  F. Supplies information on the common money laundering tactics used by terrorists and financial supporters of terrorism
  A. Provides support to expand and systematize cooperation related to the reciprocal exchange of information
  B. Fosters better and secure communication through the application of technology
  D. Encourages operational autonomy of financial intelligence units

  ---

  The Egmont Group assists financial intelligence unit members to accomplish their goals by providing support to expand and systematize cooperation related to the reciprocal exchange of information, fostering better and secure communication through the application of technology, and encouraging operational autonomy of financial intelligence units. Additionally, the Egmont Group also maintains uniform global formats for funds transfers that assist in the detection of money laundering and supplies information on the common money laundering tactics used by terrorists and financial supporters of terrorism.

• Question 568:

  Which practices should financial institutions (FIs) adopt when determining the timeline for completing an internal AML investigation and filing a Suspicious Activity Report (SAR) to the Financial Intelligence Unit (FIU)?

  A. Follow local regulatory requirements for reporting periods.
  B. Report the SAR within 30 days.
  C. Use a matrix based on the complexity of an investigation.
  D. Act on the professional judgment of a senior manager.
  A. Follow local regulatory requirements for reporting periods.

  ---

  The timely filing of SARs is legally mandated , and financial institutions must follow jurisdiction-specific reporting deadlines . Option A (Correct): Regulatory requirements dictate SAR filing deadlines (e.g., in the U.S., SARs must be filed within 30 calendar days of detecting suspicious activity). Option B (Incorrect): 30 days is the U.S. standard , but different jurisdictions may have different SAR deadlines (e.g., EU AMLD mandates prompt reporting ). Option C (Incorrect): Complexity-based reporting delays are not permitted if they exceed regulatory timelines . Option D (Incorrect): Relying solely on professional judgment rather than regulatory rules can lead to non-compliance . SAR Filing Deadlines in Different Jurisdictions: Jurisdiction SAR Filing Deadline United States (FinCEN) 30 calendar days (60 days if no suspect is identified) United Kingdom (FCA/NCA) As soon as practicable European Union (6AMLD) "Promptly" (no fixed number of days) Australia (AUSTRAC) 3 business days for terrorism financing, 14 business days for other cases Why Timely SAR Filing Matters: Delays in reporting can result in regulatory penalties. Early SAR filing enables FIUs to take swift action against financial crime. Non-compliance can lead to fines, criminal charges, and reputational damage.

• Question 569:

  Outgoing foreign transactions of similar amounts trigger a monitoring alert for a customer's accounts. During the evaluation of the accounts, the bank discovers the wire transfers were very small amounts and occurred within the last 3 months following a long period of inactivity. The wire transfers appear to originate from legal sources. To assess the potential of terrorist financing, the institution must ensure the

  A. account holder presents proof the funds are legal.
  B. beneficiaries of transfers are not on a terrorist watch list.
  C. beneficiaries of transfers are not included on the Transparency International List.
  D. account holder does not reside in a country included on the U.S. State Department State Sponsors of Terrorism List.
  B. beneficiaries of transfers are not on a terrorist watch list.

  ---

  This is the correct answer because the institution must ensure that the beneficiaries of the transfers are not on a terrorist watch list, such as the United Nations Security Council Consolidated List, the U.S. Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List, or the European Union Terrorism List. These lists contain the names of individuals, entities, and groups that are subject to sanctions or other measures due to their involvement or association with terrorism or terrorist financing. The institution must screen the beneficiaries of the transfers against these lists and report any matches or hits to the relevant authorities. Failing to do so may expose the institution to legal, regulatory, or reputational risks, as well as facilitate the financing of terrorism. References: ACAMS CAMS Certification Video Training Course1, Module 3: International AML/CTF Standards, Lesson 3.2: International AML/CTF Standards ACAMS CAMS Study Guide, 6th Edition2, Chapter 3: International AML/CTF Standards, Section 3.2: International AML/CTF Standards, pp. 57-58 ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 3: International AML/CTF Standards, Section 3.2: International AML/CTF Standards, Slide 12

• Question 570:

  Which suspicious activity may be the strongest indicator of money laundering through a casino ?

  A. A privately held company originates fund transfers through the casino into the betting accounts of multiple patrons .
  B. A patron routinely places multiple bets on the same sporting events .
  C. A patron purchases a large amount of chips at a blackjack table using cash .
  D. A patron requests the casino to transfer their winnings to another gambling operator .
  A. A privately held company originates fund transfers through the casino into the betting accounts of multiple patrons .

  ---

  Casinos and gambling institutions are highly vulnerable to money laundering because they allow the conversion of cash into chips, checks, or electronic credits, which can later be redeemed as "clean" funds. Option A (Correct): A privately held company funding multiple patrons' betting accounts is highly suspicious and may indicate: Structuring/smurfing, where multiple individuals are used to move illicit funds. Third-party money laundering, where the real source of funds is obscured. Trade-based money laundering, if linked to non-gaming businesses. Why Other Options Are Incorrect: Option B (Incorrect): Placing multiple bets on the same event is not inherently suspicious unless linked to fraudulent betting patterns . Option C (Incorrect): Large chip purchases in cash may require reporting , but they do not necessarily indicate money laundering . Option D (Incorrect): Transferring winnings to another operator may be unusual , but not automatically suspicious unless the amount is large and unjustified. Common Money Laundering Techniques in Casinos: Chip Walking ?Buying chips with illicit funds and cashing them out later as";clea"; funds. Casino Account Transfers ?Using multiple accounts or third-party accounts to move funds. High-Value Gambling with No Loss Intent ?Betting on both sides of an event to ensure clean withdrawal of funds. Best Practices for Casino AML Compliance: Monitor suspicious large transactions and third-party funding activities. Perform enhanced due diligence (EDD) on high-risk patrons. File Suspicious Transaction Reports (STRs) for unusual gambling activity. Reference: FATF Report on Money Laundering in Casinos 6th EU AML Directive (6AMLD) on Gaming and Gambling AML Risks FinCEN Guidance on Casino AML Compliance