ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 571:

  What is the relationship between the EU Anti-Money Laundering Directives (AMLDs) and local AML regulations in European Union (EU) member states? (Select Two.)

  A. Local AML laws and regulations override the requirements of the EU AMLD.
  B. Local AML regulations may impose additional or more stringent requirements than the EU AMLD.
  C. The EU AMLD provides a framework that member countries must implement through local AML regulations.
  D. The EU AMLD and local AML regulations are separate and unrelated legal frameworks .
  E. The EU AMLD and local AML regulations must have identical requirements .
  B. Local AML regulations may impose additional or more stringent requirements than the EU AMLD.
  C. The EU AMLD provides a framework that member countries must implement through local AML regulations.

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  The EU AMLD provides the legal framework , but member states have discretion in implementation. Option B (Correct): Countries can impose stricter AML laws than the minimum EU requirements . Option C (Correct): AMLDs set the foundation , and member states implement local laws . Option A (Incorrect): EU law takes precedence , and national laws must align with it. Option D (Incorrect): AMLDs and local AML regulations are interlinked . Option E (Incorrect): National AML rules do not have to be identical across all EU members.

• Question 572:

  How does the Asian/Pacific Financial Action Task Force -Style Regional Body help its members implement recommendations from the FATF? (Select Two.)

  A. Promotes laws that allow judicial challenges to seizure orders by an administrative body
  B. Endorses regulations that define money laundering based on the model laws issued by the respective member states
  C. Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions
  D. Encourages cooperative AML efforts in the region
  E. Requires members to maintain lists of regional money laundering and terrorists financing issues relevant to their region
  C. Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions
  D. Encourages cooperative AML efforts in the region

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  The Asian/Pacific Financial Action Task Force-Style Regional Body (APG) helps its members implement recommendations from the FATF by facilitating the adoption and implementation of internationally accepted AML measures by member jurisdictions (CAMS Manual, 6th Edition, Page 22). The APG also encourages cooperative AML efforts in the region, which can include information-sharing and mutual evaluations to assess member compliance with FATF recommendations (CAMS Manual, 6th Edition, Page 25). Therefore, options C and D are the correct answers.

• Question 573:

  According to the 5th EU Money Laundering Directive, member states require entities to apply enhanced customer due diligence measures with respect to business relationships or transactions involving high-risk third country nationals. Which are included in these requirements? (Choose three.)

  A. Obtaining the approval of senior management for establishing or continuing the business relationship
  B. Obtaining copies of passports for all authorized persons
  C. Establishing and verifying the address of the client
  D. Obtaining information on the reasons for intended or performed transactions
  E. Obtaining tax reference details for the client
  F. Obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner(s)
  A. Obtaining the approval of senior management for establishing or continuing the business relationship
  D. Obtaining information on the reasons for intended or performed transactions
  F. Obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner(s)

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  these are the enhanced customer due diligence measures that the 5th EU Money Laundering Directive requires for high-risk third country nationals. According to the directive, entities must obtain the approval of senior management for establishing or continuing the business relationship, obtain information on the reasons for intended or performed transactions, and obtain information on the source of funds and source of wealth of the customer and of the beneficial owner(s). These measures are intended to increase the transparency and scrutiny of the customers and their transactions, and to prevent the misuse of the financial system for money laundering or terrorist financing purposes. References: ACAMS Study Guide 6th Edition, Chapter 2, Section 2.3, page 56: "The EU's Fifth Anti-Money Laundering Directive".

• Question 574:

  A credit institution has been served with a preliminary findings report highlighting major deviations from AML obligations in its country and stating that it faces the possibility of withdrawal of its banking license. Which authorities could have issued the report?

  A. A banking sector self-regulatory body
  B. Law enforcement authority
  C. Financial Action Task Force (FATF)
  D. AML supervisory authority
  D. AML supervisory authority

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  The AML supervisory authority is responsible for overseeing financial institutions' compliance with AML /CFT regulations. Option D (Correct): AML supervisory authorities, such as the Financial Conduct Authority (FCA) in the UK FinCEN in the US , , or European Central Bank (ECB) for EU institutions , conduct inspections, issue reports, and enforce penalties when AML deficiencies are found. Option A (Incorrect): Self-regulatory bodies provide guidelines but do not have legal authority to withdraw banking licenses. Option B (Incorrect): Law enforcement may investigate criminal conduct, but regulatory compliance issues fall under AML supervisory authorities. Option C (Incorrect): FATF provides guidance and assessments but does not directly enforce compliance at individual financial institutions.

• Question 575:

  Which is a key aspect in the FATF Recommendations that best describes the essential foundation for allocating resources in AML/CFT regimes for countries and financial institutions (FIs)?

  A. Implementing targeted financial sanctions
  B. Performing country peer-to-peer evaluations
  C. Enforcing mutual legal assistance
  D. Applying a risk-based approach
  D. Applying a risk-based approach

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  The risk-based approach (RBA) is an essential foundation of the FATF Recommendations, as it allows countries, competent authorities and financial institutions to adopt a more flexible set of measures to target their resources more effectively and apply preventive measures that are commensurate to the nature of risks, in order to focus their efforts in the most effective way. The RBA is not optional, but a prerequisite for the effective implementation of the FATF Standards. The RBA requires the identification, assessment and understanding of the ML/TF risks to which the countries and FIs are exposed, and the implementation of AML /CFT measures that are proportionate and tailored to those risks. The RBA is not a "zero failure" approach, but a way to mitigate the risks in the most efficient and effective manner. References: FATF Recommendations, Introduction, page 11 FATF Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing -High Level Principles and Procedures, page 3 Risk-based Approach (RBA), What is the Risk-based Approach (RBA)?

• Question 576:

  A financial institution accepts new on-line customers. After customers have provided acceptable identification, the institution should next

  A. Confirm the validity of the customer information.
  B. Obtain an electronic picture of each customer.
  C. Closely monitor the account for 30 days.
  D. Establish the account based on the information provided.
  A. Confirm the validity of the customer information.

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  According to the CAMS Certification Package - 6th Edition1, one of the essential components of customer due diligence is verifying the identity of the customer using reliable and independent sources. This verification process should be done before or during the establishment of the business relationship, and should not be delayed unless there is a low risk of money laundering or terrorist financing, and the delay is necessary to avoid interrupting the normal course of business. Therefore, after customers have provided acceptable identification, the financial institution should next confirm the validity of the customer information, as option A suggests. Option B is not necessary, as an electronic picture of each customer is not a mandatory requirement for customer verification, and may not be feasible or effective in some cases. Option C is not the next step, as closely monitoring the account for 30 days is part of the ongoing due diligence process, which should be performed after the customer verification is completed and the account is established. Option D is not advisable, as establishing the account based on the information provided without verifying its validity may expose the financial institution to money laundering and terrorist financing risks, and may violate the KYC and AML regulations. References: 1: CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pages 69-70.

• Question 577:

  What is the intentional evasion of a reporting or recordkeeping requirement?

  A. Money laundering
  B. Layering
  C. Placement
  D. Structuring
  D. Structuring

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  Structuring is the intentional evasion of a reporting or recordkeeping requirement by breaking down a large transaction into smaller ones, or by using multiple accounts, institutions, or persons to avoid triggering the threshold for reporting or recordkeeping. Structuring is also known as smurfing, and it is a common technique used by money launderers to conceal the source, ownership, or control of illicit funds.

• Question 578:

  Which action does the Financial Action Task Force call on member countries to take in the most serious cases when countries have significant strategic AML deficiencies?

  A. Contribute to mutual evaluations
  B. Apply countermeasures
  C. Eliminate all financial dealings
  D. Report high-risk transactions
  B. Apply countermeasures

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  According to the FATF Recommendations (2012), page 111, the FATF calls on its members and urges all jurisdictions to apply enhanced due diligence and, in the most serious cases, countermeasures to protect the international financial system from the money laundering, terrorist financing, and proliferation financing risks emanating from countries with significant strategic AML/CFT deficiencies. Countermeasures are proportionate and effective actions that can be applied by countries individually or collectively to protect their financial systems from these risks. Examples of countermeasures include restricting or prohibiting financial transactions with the high-risk country, requiring financial institutions to review and terminate correspondent relationships with the high-risk country, or applying enhanced reporting mechanisms or systematic reporting of financial transactions with the high-risk country.

• Question 579:

  What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?

  A. 3,000 Euros
  B. 5,000 Euros
  C. 10,000 Euros
  D. 15,000 Euros
  C. 10,000 Euros

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  The European Union Fourth Anti-Money Laundering Directive (4th AMLD) is a legal framework that aims to prevent the use of the Union's financial system for the purposes of money laundering and terrorist financing. One of the provisions of the 4th AMLD is to lower the currency threshold for cash payments from 15,000 to 10,000. This means that any person who makes or receives cash payments of 10,000 or more, whether in a single transaction or in several linked transactions, is subject to customer due diligence and record-keeping obligations. The 4th AMLD also extends its applicability to providers of gambling services, which are now listed as `obliged entities'. References: Directive - 2015/849 - EN - Fourth Anti-Money Laundering Directive - EUR-Lex, Article 11 and Recital 23. EUR-Lex - 02015L0849-20210630 - EN - EUR-Lex, Article 11 and Recital 23. Key elements of the 4th EU Anti-Money Laundering Directive, Section: Cash payments. Anti-money laundering and countering the financing of terrorism legislative package, Section: New EU AML/CFT Regulation. Reference: https://www.acams.org/aml-resources/eu-fourth-aml-directive/

• Question 580:

  Who meets the standard to perform the AML audit? (Select Two.)

  A. An internal auditor with a family member employed in the AML department
  B. An internal auditor with the requisite knowledge and expertise of AML
  C. A consultant previously employed in the AML department within the past 2 years
  D. Qualified bank staff if not involved in the AML function being tested
  E. A consultant with limited knowledge and experience in AML but many years of internal audit experience
  B. An internal auditor with the requisite knowledge and expertise of AML
  D. Qualified bank staff if not involved in the AML function being tested

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  B. An internal auditor with the requisite knowledge and expertise of AML: An internal auditor with sufficient knowledge and expertise in AML regulations and compliance requirements can perform the AML audit. D. Qualified bank staff if not involved in the AML function being tested: Qualified bank staff who are not involved in the AML function being audited can perform the AML audit.