ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 631:

  The EU's 6th Anti-Money Laundering Directive (6AMLD) :

  A. Extended AML oversight to crowdfunding platforms and professional football clubs.
  B. Eliminated the requirement for the European Commission to conduct a risk assessment.
  C. Created a central EU watchdog to combat money laundering.
  D. Strengthened provisions relating to the accuracy of data submitted to central beneficial ownership registries.
  D. Strengthened provisions relating to the accuracy of data submitted to central beneficial ownership registries.

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  The 6th AML Directive (6AMLD) introduced tighter rules to combat financial crime, particularly around beneficial ownership transparency . Option D (Correct): 6AMLD enhances transparency by requiring accurate and verified data in central beneficial ownership registries, making it harder to hide illicit funds behind shell companies. Option A (Incorrect): While some entities face increased scrutiny, crowdfunding platforms and football clubs were not the primary focus of 6AMLD. Option B (Incorrect): 6AMLD does not remove the EU's obligation to conduct risk assessments; risk- based approaches remain central to AML efforts. Option C (Incorrect): The EU AML Authority (AMLA) , planned for 2024 , will centralize enforcement, but 6AMLD did not create this entity.

• Question 632:

  When deficiencies are identified in the Financial Action Task Force (FATF) mutual evaluation report, the assessed country needs to:

  A. address the shortcomings identified in the report and agree to post-assessment monitoring by FATF.
  B. request exception from the relevant FATF-style regional body by submitting a report with the reasons.
  C. pay a penalty for the delay in adopting the FATF 40 recommendations accurately and timely.
  D. prepare a report to defend its position against the FATF secretariat, which is comprised of the assessors.
  A. address the shortcomings identified in the report and agree to post-assessment monitoring by FATF.

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  According to the Anti-Money Laundering Specialist (the 6th edition) resources, the FATF mutual evaluation process is a peer review mechanism that assesses the level of compliance of a country with the FATF 40 recommendations and the effectiveness of its anti-money laundering and counter-terrorist financing system. The mutual evaluation report identifies the strengths and weaknesses of the assessed country and provides recommendations for improvement. The assessed country needs to address the shortcomings identified in the report and agree to post-assessment monitoring by FATF, which involves regular follow-up reports and actions to remedy the deficiencies. The other options are not correct, as they do not reflect the FATF mutual evaluation process or the obligations of the assessed country.

• Question 633:

  A bank employee reviews wire transactions looking for indications of wire stripping.

  Which two actions should the employee take to complete appropriate bank procedures? (Choose two.)

  A. Compare the wire transaction as it enters and after it leaves the bank
  B. Check for suspicious phrases usually used to conceal originator or beneficiary identity
  C. Identify large incoming wire transactions received on behalf of a foreign client with no explicit reason
  D. Identify wire transaction activity to or from a financial institution located in a higher risk jurisdiction
  A. Compare the wire transaction as it enters and after it leaves the bank
  B. Check for suspicious phrases usually used to conceal originator or beneficiary identity

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  Wire stripping is a technique used by money launderers to remove or alter information that identifies the originator or beneficiary of a wire transfer, in order to avoid detection or tracing. To detect wire stripping, a bank employee should compare the wire transaction as it enters and after it leaves the bank, and look for any discrepancies or missing information in the fields related to the originator or beneficiary. The employee should also check for suspicious phrases usually used to conceal originator or beneficiary identity, such as "for further credit", "in favor of", "on behalf of", or "as instructed". References: CAMS Study Guide, 6th Edition, Chapter 3, Section 3.21 CAMS Study Guide, 6th Edition, Chapter 5, Section 5.31 ACAMS Chapter 3 FATF Guidance on Transparency and Beneficial Ownership, Section 3.23 Reference: https://www.lexology.com/library/detail.aspx?g=79732c5e-b4bf-456a-9604-712f44f5a930

• Question 634:

  When using virtual assets such as Bitcoin to finance terrorism, which tactic may be used to ensure that the virtual assets are not easily seized by law enforcement?

  A. Using self-hosted wallets to create many different donation addresses that are updated continuously
  B. Posting donation addresses that are linked to accounts at centralized virtual asset service providers
  C. Using the same donation address across multiple donation campaigns and media types
  D. Forming relationships with virtual asset service providers that have strong KYC processes in place to avoid suspicion
  A. Using self-hosted wallets to create many different donation addresses that are updated continuously

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  Using self-hosted wallets, or wallets that are stored on the user's computer, is one of the tactics that may be used to finance terrorism with virtual assets such as Bitcoin. By creating many different donation addresses that are updated continuously, law enforcement will have a harder time tracing transactions. It is also important to note that using the same donation address across multiple donation campaigns and media types, as well as forming relationships with virtual asset service providers that have strong KYC processes in place, can draw attention from law enforcement and should be avoided.

• Question 635:

  What are some red flags financial institutions should be aware of when trying to verify the identity of a customer? Choose 3 answers

  A. Customer having unusual documents from a foreign country
  B. Customer being new to the community
  C. Customer having no permanent address
  D. Customer not having a connected phone
  A. Customer having unusual documents from a foreign country
  C. Customer having no permanent address
  D. Customer not having a connected phone

• Question 636:

  How should a compliance program respond to an AML audit finding?

  A. By using the findings to identify and assess their money laundering risk
  B. By closing the accounts that were subject to findings
  C. By giving recommendations for each finding as part of an audit report
  D. By nominating an independent party to implement the corrective action
  A. By using the findings to identify and assess their money laundering risk

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  An AML audit is a process of evaluating an organization's compliance with AML regulations and best practices. The audit report should provide feedback on the strengths and weaknesses of the organization's AML program and identify any gaps or deficiencies that need to be addressed. The compliance program should use the audit findings as an opportunity to improve its AML risk management and internal controls, and to implement corrective actions as needed. The audit findings should not be ignored or dismissed, but rather used as a tool to enhance the organization's AML compliance performance and effectiveness. References: 1: This web page explains what an AML compliance program is, why it is important, and what are the key components of an effective program. It also states that an AML compliance program should involve a regular review of the internal controls and systems used to detect and report financial crime, and measure their effectiveness in meeting compliance standards. 2: This blog post provides an overview of the importance and steps of an AML audit, and how to perform one effectively. It also suggests that an AML audit is a starting point to strengthen and improve the AML program, and that the insights from the audit should prompt action by the compliance team to address the deficiencies discovered. 3: This blog post discusses the best practices for AML audit compliance, and emphasizes the need for an ongoing testing process, including the audit, to keep the AML program current and effective. It also recommends effective communication among all employees who follow the program and procedures.

• Question 637:

  Which method to finance terrorism involves falsifying transaction-related documents?

  A. Bribery
  B. Black market peso exchange
  C. Trade-based money laundering
  D. Informal value transfer system
  C. Trade-based money laundering

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  Trade-based money laundering (TBML) is a method to finance terrorism that involves falsifying transaction- related documents, such as invoices, contracts, bills of lading, or customs declarations, to conceal the origin, destination, value, or purpose of illicit funds. TBML can be used to move money, goods, or services to or from sanctioned or high-risk jurisdictions, to evade taxes, duties, or currency controls, to launder proceeds of crime, or to support terrorist activities. TBML can involve over- or under-invoicing, over- or under-shipping, multiple-invoicing, or falsely describing goods or services. TBML can also be linked to other methods of money laundering or terrorist financing, such as bribery, black market peso exchange, or informal value transfer systems. References: ACAMS CAMS Certification Video Training Course, Module 2: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Lesson 4: Trade-Based Money Laundering Money Laundering and Terrorist Financing Related to Counterfeiting of Currency, Financial Action Task Force (FATF), page 28 Tracing terrorist finances, INTERPOL

• Question 638:

  According to the Financial Action Task Force 40 Recommendations, simplified customer due diligence or reduced measures could be acceptable for which of the following types of products or transactions?

  1.

  Life insurance policies where the annual premium is no more than USD/EUR 1,000 or a single premium of no more than USD/EUR 2,500.

  2.

  Insurance policies for pension schemes if there is no surrender clause and the policy cannot be used as collateral.

  3.

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  4.

  Trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer form.

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

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  According to the Financial Action Task Force (FATF) 40 Recommendations, simplified customer due diligence (CDD) or reduced measures could be acceptable for certain types of products or transactions that have a low risk of money laundering or terrorist financing, based on a reasonable assessment of the risk by countries or by financial institutions. These include: Life insurance policies where the annual premium is no more than USD/EUR 1,000 or a single premium of no more than USD/EUR 2,500. This is because the amount of money involved is relatively small and the payout is usually contingent on a specific event, such as death or disability, which reduces the likelihood of abuse by criminals. Insurance policies for pension schemes if there is no surrender clause and the policy cannot be used as collateral. This is because the beneficiaries of these policies are usually predetermined and the funds are locked in until retirement age, which limits the possibility of transferring or withdrawing the money for illicit purposes. A pension, superannuation or similar scheme that provides retirement benefits to employees, where contributions are made by way of deduction from wages and the scheme rules do not permit the assignment of a member's interest under the scheme. This is because the source of funds is known and verified by the employer and the scheme is regulated and supervised by competent authorities, which reduces the risk of money laundering or terrorist financing. The other option, trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer form, is not eligible for simplified CDD or reduced measures, because the use of bearer shares poses a high risk of anonymity and concealment of beneficial ownership, which could facilitate money laundering or terrorist financing. References: FATF 40 Recommendations, Recommendation 10 and Interpretive Note to Recommendation 10, paragraphs 17-18.

• Question 639:

  What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?

  A. Verify the officer's identification and ask for the law enforcement request to be served when the Chief Executive Officer is available to sign for it.
  B. Ask for an extension to review the FI's privacy policy and confidentiality policy before providing any information under the law enforcement request.
  C. Designate a person responsible for the internal investigation in preparation of documents for the request.
  D. Keep senior management informed at all times to strategically organize a defense to terminate the law enforcement request .
  C. Designate a person responsible for the internal investigation in preparation of documents for the request.

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  FIs must cooperate with law enforcement requests while ensuring legal compliance . Option C (Correct): A designated compliance officer should handle document preparation and internal review . Option A (Incorrect): There is no requirement to wait for the CEO's approval . Option B (Incorrect): Privacy policies should already align with AML laws , delaying compliance is not recommended . Option D (Incorrect): Blocking a lawful request could lead to legal and regulatory action .

• Question 640:

  Which approach ensures the successful implementation of a transaction monitoring system?

  A. Taking great care to minimize changes to transaction monitoring system rules and parameters once these have been certified as accurate
  B. Performing systems integration testing at key steps of development and user acceptance testing prior to going live with the transaction monitoring system
  C. Implementing third-party transaction monitoring software, taking great care not to adjust pre- programmed rules and alerting thresholds
  D. Ensuring all checks of a transaction monitoring system's rules and parameters use actual live data after the system is operational
  B. Performing systems integration testing at key steps of development and user acceptance testing prior to going live with the transaction monitoring system

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  A transaction monitoring system (TMS) is a tool that helps financial institutions detect and report suspicious activities related to money laundering, terrorist financing, and other financial crimes. A TMS needs to be implemented carefully and effectively to ensure its accuracy, reliability, and compliance with regulatory requirements. One of the best practices for implementing a TMS is to perform systems integration testing (SIT) at key steps of development and user acceptance testing (UAT) prior to going live with the TMS. SIT is a process of verifying that the TMS can interact with other systems and data sources correctly and efficiently. UAT is a process of validating that the TMS meets the functional and operational expectations of the end-users and stakeholders. By conducting SIT and UAT, the financial institution can identify and resolve any issues or defects in the TMS before it is deployed in the production environment. This can help avoid potential problems such as data quality issues, false positives, false negatives, system errors, performance issues, and regulatory breaches. Performing SIT and UAT can also help ensure that the TMS is aligned with the financial institution's risk assessment, policies, procedures, and controls.