ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 581:

  Which trading pattern may be indicative of money laundering in capital markets?

  A. Free of payment asset transfer
  B. Remittance of a round dollar amount
  C. Trading on an account
  D. Transacting with multiple counterparties
  A. Free of payment asset transfer

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  free of payment asset transfer is a trading pattern that may be indicative of money laundering in capital markets. Free of payment asset transfer is a method of transferring securities without any corresponding payment, which can be used to avoid detection of the origin or destination of the funds. This can facilitate the layering or integration stages of money laundering, as the launderer can move the assets across different accounts, jurisdictions, or institutions without leaving a clear audit trail. Free of payment asset transfer can also be used to evade taxes, sanctions, or other regulatory requirements.

• Question 582:

  In which situation can money laundering adversely affect a country's currencies and interest rates due to launderers investing dirty funds?

  A. They invest in high risk ventures with high rates of return
  B. They invest in legitimate companies as a way of making their funds appear to be legitimate
  C. They invest in shell companies in secrecy havens that intentionally manipulate rates
  D. They invest in a way to hide funds rather than get a high rate of return
  D. They invest in a way to hide funds rather than get a high rate of return

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  Money laundering can have negative effects on a country's currencies and interest rates, as it distorts the allocation of resources and the demand and supply of money. According to the IMF1, money laundering can also adversely affect currencies and interest rates as launderers reinvest funds where their schemes are less likely to be detected, rather than where rates of return are higher. This can create artificial fluctuations and imbalances in the exchange and interest rates, and undermine the effectiveness of monetary policy. For example, if launderers invest in low-yield assets such as government bonds or real estate, they may drive up the prices and lower the yields of these assets, while reducing the availability of funds for more productive investments. This can also affect the inflation and growth prospects of the country. References: 1: Macroeconomic Implications of Money Laundering by Peter J. Quirk, IMF Working Paper, 1996 2: Understanding Money Laundering: How It Impacts the Global Economy by Tookitaki, 2019 3: Money Laundering by U.S. Department of the Treasury, 2021 4:The Consequences of Money Laundering and Financial Crime by John McDowell and Gary Novis, U.S.Department of State, 2001

• Question 583:

  An AML analyst at a financial institution is examining an alert generated by the automated transaction monitoring system to determine whether the alert should be escalated to the AML unit for further investigation or archived as a false

  positive .

  Which action might be reasonable for the AML analyst to take ?

  A. Perform below-the-line testing to ensure the automated monitoring system is operating effectively.
  B. Send a request for information to the counterparty bank involved in the transaction that caused the alert.
  C. Request information from the relationship manager assigned to the account that caused the alert.
  D. Restrict the client's access to the account.
  C. Request information from the relationship manager assigned to the account that caused the alert.

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  Transaction monitoring alerts require further analysis to determine whether they indicate genuine suspicious activity or a false positive . Option C (Correct): Requesting information from the relationship manager helps gather customer background details, past transaction patterns, and business rationale. Option A (Incorrect): Below-the-line testing assesses system effectiveness but does not resolve an immediate AML alert. Option B (Incorrect): Directly contacting a counterparty bank may violate privacy regulations and should only be done if escalation is required. Option D (Incorrect): Restricting access without due diligence may lead to regulatory and reputational risks. Best Practices for Investigating AML Alerts: Review transaction history and customer risk profile. Engage the relationship manager for business context. Escalate to AML compliance teams if red flags persist.

• Question 584:

  Which method most likely indicates the placement stage of laundering dirty money in a land based casino?

  A. Transferring substantial amounts of money from a client's credit card to a client's casino's VIPaccount
  B. Buying casino chips against a bank draft
  C. Redeeming smaller denomination casino chips for largest denomination chips
  D. Using cash to buy casino winnings from legitimate winners at a premium
  D. Using cash to buy casino winnings from legitimate winners at a premium

• Question 585:

  The marketing department presents to an anti-money laundering specialist a business plan targeting individuals holding important public positions. In addition to obtaining the proper identification and basic information from these customers, what else should the anti-money laundering specialist recommend a financial institution do to check the background and conduct enhanced due diligence based on public information?

  1.

  Determine if a client appears on the Basel Committee on Banking Supervision's list of public officials.

  2.

  Investigate the source of funds.

  3.

  Identify people and companies that are clearly related.

  4.

  Identify a person fully, including their political history.

  A. 1, 2, and 3 only
  B. 1, 2, and 4 only
  C. 1, 3, and 4 only
  D. 2, 3, and 4 only
  D. 2, 3, and 4 only

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  The anti-money laundering specialist should recommend a financial institution to investigate the source of funds, identify people and companies that are clearly related, and identify a person fully, including their political history, when dealing with individuals holding important public positions. These are essential steps to conduct enhanced due diligence based on public information, as they can help to assess the risk profile, the legitimacy, and the transparency of the customer relationship. The Basel Committee on Banking Supervision' s list of public officials is not a reliable source of public information, as it is not comprehensive, updated, or verified. Therefore, it is not a sufficient criterion to check the background of potential customers. References: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4, page 971 ACAMS CAMS Certification Video Training Course, Module 4, Lesson 32 ACAMS CAMS Certification Exam Outline, Domain 4, Task 23

• Question 586:

  A compliance officer is looking to update an institutions private bank procedures. What should be included as recommended by the Wolfsberg AML Principles on Private Banking?

  A. Approval of Politically Exposed Persons (PEPs) by at least one person other than the relationship manager
  B. Dedicated automated AML monitoring of client activity
  C. Review of client files annually if there are unusual transactions
  D. The institution's senior management has primary responsibility for the relationship
  A. Approval of Politically Exposed Persons (PEPs) by at least one person other than the relationship manager

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  https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/wolfsbergstandards/10.%20Wolfsberg- Private-Banking-Prinicples-May-2012.pdf 2.4 Senior Management Approval The bank's internal policies should indicate whether, for any one or more among these categories, Senior Management must approve entering into new relationships. Relationships with Politically Exposed Persons may only be entered into with the approval of Senior Management.

• Question 587:

  A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?

  A. If the activity is materially different from related businesses
  B. If the account has multiple transfers to the same, related businesses
  C. If there is negative media associated with counterparties
  D. If the account is mostly dormant or has little activity
  C. If there is negative media associated with counterparties

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  According to the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, page 105, the correct answer is C. It can be difficult to determine if there is negative media associated with counterparties solely from the customer's account activity and KYC file. The study guide explains that negative media can include news articles, government sanctions lists, and other sources of public information that may indicate that a counterparty is involved in illicit activities. However, this information may not be readily available in a customer's account activity or KYC file, and may require additional research or investigation.

• Question 588:

  Which transaction should result in a SAR/STR filing?

  A. A small business owner deposits checks totaling $9,950 USD on a daily basis without providing a legitimate purpose.
  B. A small business owner deposits $25,000 USD in cash proceeds with a business equipment bill of sale.
  C. A national food-chain restaurant with multiple cash transactions at various branch locations.
  D. A national food-chain restaurant makes multiple, anticipated cash transactions that are above the daily reporting threshold.
  A. A small business owner deposits checks totaling $9,950 USD on a daily basis without providing a legitimate purpose.

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  Ref This transaction should result in a SAR/STR filing because it indicates possible structuring, which is a form of money laundering that involves breaking down large amounts of cash into smaller deposits to avoid detection or reporting requirements. Structuring is often done to conceal the source or destination of illicit funds, or to evade taxes, regulations, or sanctions. A small business owner who deposits checks just below the $10,000 USD threshold on a daily basis without providing a legitimate purpose raises a red flag for suspicious activity and should be reported to the relevant Financial Intelligence Unit. References: Suspicious Transaction Report (STR) / Suspicious Activity Report (SAR) What Is a Suspicious Activity Report (SAR)? Triggers and Filing How to decide if SAR filing is needed erence: https://aml-cft.net/library/suspicious-transaction-report-str-suspicious-activity-report-sar/

• Question 589:

  With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

  A. Internal auditor
  B. Local Financial Intelligence Unit
  C. Human resources
  D. Institution's regulator
  C. Human resources

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  An anti-money laundering officer should coordinate with human resources when implementing a new hire screening program, because human resources is responsible for managing the recruitment, hiring, and training of employees, as well as ensuring compliance with labor laws and regulations. A new hire screening program is a key component of an effective anti-money laundering (AML) program, as it helps to prevent the hiring of individuals who may pose a risk of facilitating money laundering, terrorist financing, or other financial crimes, or who may have a criminal or disciplinary history that could compromise the integrity of the institution. A new hire screening program should include background checks, verification of credentials and references, and assessment of skills and competencies relevant to the AML function. An anti-money laundering officer should work closely with human resources to establish the criteria, procedures, and documentation for the screening program, as well as to monitor its implementation and effectiveness. References: ACAMS CAMS Certification Video Training Course1, Module 4: Developing an AML Program, Lesson 4.2: Developing an AML Program ACAMS CAMS Study Guide, 6th Edition2, Chapter 4: Developing an AML Program, Section 4.2: Developing an AML Program, pp. 81-82 ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 4: Developing an AML Program, Section 4.2: Developing an AML Program, Slide 20

• Question 590:

  A bank provides trade financing for a company whose primary export is steel. Which action by the company indicates possible money laundering?

  A. The company often deals with foreign currency exchanges.
  B. The company regularly understates the value of goods exported.
  C. The company frequently sells above or below its competitors' price.
  D. The company frequently transfers funds to other bank accounts located in other jurisdictions.
  B. The company regularly understates the value of goods exported.

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  The company regularly understating the value of goods exported is an indicator of possible money laundering because it may suggest that the company is involved in trade-based money laundering (TBML), which is the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimise their illicit origins or finance their activities. One of the common TBML techniques is over-invoicing or under-invoicing, which involves manipulating the price, quantity or quality of goods or services in order to transfer value between the importer and exporter. By understating the value of goods exported, the company may be transferring funds to a foreign counterpart who is either a co-conspirator or a third-party money launderer, who will then pay the company the difference in cash or through other means. This way, the company can avoid currency reporting requirements, evade taxes, conceal the source and destination of funds, and integrate the illicit proceeds into the formal economy. References: ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 2: Money Laundering Risks and Methods, page 381 Trade-Based Money Laundering: Trends and Developments, FATF-Egmont Group, December 2020, page 282 Trade-Based Money Laundering and Terrorist Financing, Global Investigations Review, September 20233