ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 591:

  Which of the following are money laundering red flags when reviewing business operations of a money services business (MSB) ? (Select Two.)

  A. A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under the reporting threshold.
  B. Cash-intensive businesses, such as convenience stores or restaurants , making large cash deposits.
  C. A customer completing frequent small-dollar international money transfers to their native country.
  D. A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.
  E. A customer using multiple accounts under different names to conduct transactions.
  D. A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.
  E. A customer using multiple accounts under different names to conduct transactions.

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  MSBs are vulnerable to financial crime due to their cash-intensive nature and remittance services . Option D (Correct): Hesitation to provide beneficiary details suggests anonymity concerns , a common money laundering tactic. Option E (Correct): Using multiple accounts under different names is a known structuring technique to evade detection . Option A (Incorrect): Exchanging foreign currency is normal , though higher-risk transactions require monitoring. Option B (Incorrect): Cash deposits are expected in MSBs but need additional risk factors to be considered suspicious. Option C (Incorrect): Frequent small transfers may be normal for remittance businesses .

• Question 592:

  When the Financial Action Task Force (FATF) places a jurisdiction on the list of "jurisdictions under increased monitoring" , also known as the "grey list" , the jurisdiction:

  A. Has committed to swiftly resolving the deficiencies identified in a FATF mutual evaluation.
  B. Poses a high money laundering, terrorist financing, and proliferation financing risk and must be restricted from accessing the international financial system.
  C. Accepts to participate in an off-cycle FATF mutual evaluation to be held within the next 12 months.
  D. Must pay a fine to be removed from the list before the next FATF plenary.
  A. Has committed to swiftly resolving the deficiencies identified in a FATF mutual evaluation.

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  The FATF Grey List consists of jurisdictions under increased monitoring due to strategic deficiencies in their AML/CFT frameworks . Option A (Correct): Countries placed on the grey list have identified weaknesses but commit to addressing them within set timeframes . Option B (Incorrect): High-risk jurisdictions that fail to cooperate are placed on the blacklist , not the grey list. Option C (Incorrect): While additional reviews may occur, grey-listed countries follow an agreed- upon action plan , not an automatic re-evaluation. Option D (Incorrect): FATF does not impose financial penalties ; instead, it monitors progress and issues public reports .

• Question 593:

  A retail bank has just acquired a credit card business. The bank's anti-money laundering policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis. Is the bank's existing anti-money laundering training adequate to be delivered to employee of the newly acquired credit card business?

  A. Yes, the existing training covers the bank's policies, procedures, and processes.
  B. No, anti-money laundering training needs to be delivered face-to-face for credit card businesses.
  C. No, anti-money laundering training needs to be tailored and focused on the risks specific to the business.
  D. Yes, the existing training covers the anti-money laundering regulations that the bank is required to follow.
  C. No, anti-money laundering training needs to be tailored and focused on the risks specific to the business.

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  The bank's existing anti-money laundering training is not adequate to be delivered to the employees of the newly acquired credit card business, because anti-money laundering training needs to be tailored and focused on the risks specific to the business. Credit card businesses face different types of money laundering risks than retail banks, such as card-not-present fraud, identity theft, card skimming, and prepaid card abuse. Therefore, the anti-money laundering training for credit card businesses should cover the specific red flags, indicators, typologies, and mitigation measures related to these risks, as well as the relevant laws and regulations that apply to credit card businesses. References: CAMS Study Guide, 6th Edition, Chapter 4, Section 4.31 CAMS Study Guide, 6th Edition, Chapter 5, Section 5.21 Certification Candidate Handbook, Section 3.22

• Question 594:

  In the summer, an institution identifies anti-money laundering concerns regarding a customer's account activity. The customer, an ice cream, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks. Which two transaction types warrant investigation? (Choose two.)

  A. Regular cash deposits
  B. The wires to foreign countries
  C. Repeated checks to the same payees
  D. Checks drawn on banks in foreign countries
  B. The wires to foreign countries
  D. Checks drawn on banks in foreign countries

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  According to the ACAMS Study Guide 6th Edition, Chapter 2, page 36, one of the methods that financial institutions can use to identify suspicious or unusual activity is to monitor transactions for red flags or indicators of money laundering or terrorist financing. Some of the common red flags are: Transactions that are inconsistent with the customer's profile, business, or source of funds Transactions that involve high-risk countries or jurisdictions, especially those with weak or inadequate anti-money laundering regulations, or those known to be sources or destinations of illicit funds Transactions that involve the use of complex or unusual financial instruments or structures, such as multiple accounts, intermediaries, or offshore entities, that have no apparent economic or lawful purpose Transactions that involve the use of large amounts of cash, checks, or monetary instruments, especially if they are structured or aggregated to avoid reporting or recordkeeping requirements Transactions that involve the use of third parties or nominees, such as relatives, associates, or shell companies, to conceal the identity, ownership, or control of the funds or assets Option B is a transaction type that warrants investigation, as it involves sending large number of high dollar international wires to different countries, which could indicate that the customer is involved in layering or integration stages of money laundering, where the illicit funds are moved across borders and disguised as legitimate transfers. This transaction type also raises the risk of exposure to sanctions, terrorist financing, or other illicit activities, depending on the destination and purpose of the wires. Option D is also a transaction type that warrants investigation, as it involves depositing a lot of checks drawn on banks in foreign countries, which could indicate that the customer is involved in placement or layering stages of money laundering, where the illicit funds are introduced into the financial system or converted into other forms of value. This transaction type also raises the risk of exposure to fraud, counterfeit, or forgery, depending on the origin and authenticity of the checks. Option A is not a transaction type that warrants investigation, as it involves making regular cash deposits of a few hundred dollars every few days, which could be consistent with the customer's profile, business, or source of funds, especially if the customer is an ice cream vendor who operates in cash. This transaction type does not raise any red flags of money laundering or terrorist financing, unless there is evidence that the cash deposits are structured or aggregated to avoid reporting or recordkeeping requirements. Option C is also not a transaction type that warrants investigation, as it involves writing multiple checks for a few hundred dollars to the same dozen payees every two weeks, which could be consistent with the customer' s profile, business, or source of funds, especially if the payees are suppliers, employees, or contractors of the customer. This transaction type does not raise any red flags of money laundering or terrorist financing, unless there is evidence that the checks are used to facilitate illicit activities, such as bribery, kickbacks, or tax evasion. References: ACAMS Study Guide 6th Edition, Chapter 2, page 36 Red Flags And Atypical Customer Behavior: Anti-Money Laundering Awareness 4 Red Flags of Money Laundering or Terrorist Financing

• Question 595:

  A suspicious transaction report has been filed on an account owned by the wife of the bank's ChiefExecutive Officer. Which of the following is the most important consideration when deciding whether to recommend closing the account?

  A. The institution's anti-money laundering policy
  B. Requests from the competent authority
  C. Customer relations
  D. Chief Executive's reputational risk
  A. The institution's anti-money laundering policy

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  The most important consideration when deciding whether to recommend closing the account is the institution' s anti-money laundering policy. This is because the policy should provide clear and consistent criteria for account closure decisions, based on the risk assessment, the nature and severity of the suspicious activity, the customer due diligence information, and the legal and regulatory obligations of the institution. The policy should also ensure that the account closure process is independent, objective, and transparent, and that it does not compromise the confidentiality of the suspicious transaction report or the investigation.

• Question 596:

  An individual opened an account with a minimal cash deposit at a financial institution. He presented a foreign passport and stated he would be working locally for a few months. He also requested information about making electronic fund transfers. The institution was subsequently unable to verify the employment or residence information provided by the individual. Soon after this, a large transfer was sent to the customer's account. Which of the following is the course of action recommended by the Basel Committee on Banking Supervision's Customer Due Diligence for Banks?

  A. Post the deposit to the account and notify the customer that the deposit has been made.
  B. Implement enhanced due diligence procedures to monitor the account for suspicious activity.
  C. Close the account and return the funds to the source from which they were received.
  D. End the relationship by sending a check (cheque) to the customer for the full amount in the account.
  B. Implement enhanced due diligence procedures to monitor the account for suspicious activity.

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  According to the Basel Committee on Banking Supervision's Customer Due Diligence for Banks1, banks should have policies and procedures to identify and manage high-risk customers, such as those who provide false or incomplete information, have complex or opaque beneficial ownership structures, or are involved in large or unusual transactions. In such cases, banks should apply enhanced due diligence measures, such as obtaining additional information or documentation, verifying the source and purpose of funds, conducting more frequent and intensive monitoring of account activity, and reporting any suspicious transactions to the relevant authorities. Therefore, the best course of action for the bank in this scenario is to implement enhanced due diligence procedures to monitor the account for suspicious activity, as option B suggests. Option A is not recommended, as it would imply that the bank accepts the customer without verifying his identity and background, which would expose the bank to money laundering and terrorist financing risks. Option C is not advisable, as it would terminate the relationship without investigating the origin and destination of the funds, which could hinder the efforts of law enforcement agencies to trace and recover illicit assets. Option D is also not appropriate, as it would involve sending a check to a customer whose address and identity are not confirmed, which could facilitate money laundering and fraud.

• Question 597:

  The Chief Compliance Officer (CCO) of a financial institution has been asked by a manufacturing customer reliant upon imported raw materials if there will be repercussions to his business following the weak assessment of the recent publicly issued Financial Action Task Force (FATF) Mutual Evaluation Report (MER). How should the CCO respond?

  A. Delayed processing of cross-border transfer of funds between countries may occur due to increased scrutiny to determine the legitimacy of each transfer.
  B. Citing inaccurate content of the MER. the president of the country has called upon the FATF to publicly withdraw the MER and commission an independent review of findings.
  C. Mandate termination of all cross-border trading until evidence can be provided to show an improved position of compliance for the weaknesses stated in the MER.
  D. Negative consequences will not occur because the manufacturing customer has been trading with reputable countries and suppliers for many years without incident.
  A. Delayed processing of cross-border transfer of funds between countries may occur due to increased scrutiny to determine the legitimacy of each transfer.

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  According to the Certified Anti-Money Laundering Specialist (the 6th edition) Study guide, the CCO should advise the manufacturing customer that increased scrutiny of cross-border transfers may lead to delays and caution them to ensure that all necessary documentation is provided in order to facilitate a timely transfer. Additionally, the CCO should recommend that the customer contact the FATF to discuss the possibility of an independent review of the findings, as well as other options to mitigate the potential negative consequences.

• Question 598:

  Which section of the USA PATRIOT Act relates to forfeiture of funds and allows for extraterritorial reach ?

  A. Section 319(a)
  B. Section 314(a)
  C. Section 319(b)
  D. Section 314(b)
  C. Section 319(b)

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  USA PATRIOT Act Section 319(b) gives the U.S. government the power to seize funds from a U.S. correspondent bank account held for a foreign bank , if the funds are linked to illicit activity. Option C (Correct): Section 319(b) explicitly allows asset forfeiture from foreign correspondent bank accounts in the U.S. Option A (Incorrect): Section 319(a) grants U.S. regulators faster access to bank records (within 120 hours ). Option B (Incorrect): Section 314(a) deals with information sharing between banks and law enforcement . Option D (Incorrect): Section 314(b) allows banks to voluntarily share AML information among themselves .

• Question 599:

  What should an employee do after witnessing suspicious activity from a coworker?

  A. Request that the coworker provide justification for their actions.
  B. Escalate to the company's conflict line or compliance department.
  C. Request help from colleagues in determining that the best course of action.
  D. Discuss the suspicious activity with your supervisor.
  B. Escalate to the company's conflict line or compliance department.

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  An employee who witnesses suspicious activity from a coworker should not confront the coworker or discuss the activity with their supervisor. Instead, they should report the activity to their employer's conflict line or compliance department, who can investigate the matter and take the appropriate action. It is important to remember that employees are legally obligated to report any suspicious activity they witness.

• Question 600:

  Which are red-flag indicators of possible money laundering through online gambling? (Choose two.)

  A. The player is identified as a Politically Exposed Person (PEP).
  B. The player opens several accounts under the same name using different IP addresses.
  C. The customer uses their credit card to fund an online gambling account.
  D. The player deposits small amounts of funds into their online gambling account.
  E. The customer logs on to the account from multiple countries.
  B. The player opens several accounts under the same name using different IP addresses.
  E. The customer logs on to the account from multiple countries.

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  According to the research report by the Council of Europe1, one of the typologies of money laundering through online gambling is the use of multiple accounts and identities to conceal the source and destination of funds. This can be done by opening several accounts under the same name using different IP addresses, or by using false or stolen identification documents to create multiple accounts. Another typology is the use of online gambling platforms that are not regulated or authorized by the jurisdiction where the customer is located, or that do not require know-your-client information from users. This can allow money launderers to access the online gambling services from multiple countries, without being subject to any verification or monitoring by the authorities.