ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 681:

  Can trading in antiques be useful for money laundering?

  A. No, because the antiques market is rather small and unusual transactions would draw at-tention.
  B. No, because antique sales and purchases are highly regulated worldwide.
  C. Yes, because cash is often physically hidden within the antiques themselves.
  D. Yes, because antiques can be of high value and often easily transported.
  C. Yes, because cash is often physically hidden within the antiques themselves.

  ---

  Antiques are a potential tool for money laundering because they can be used to conceal, move, and convert illicit funds. Antiques can be of high value and often easily transported across borders, making them attractive for criminals who want to evade detection and reporting. Antiques can also be difficult to value and authenticate, creating a lack of transparency and accountability in the market. Criminals can exploit this to inflate or deflate the prices of antiques, or to use them as collateral for loans or other transactions. Antiques can also be used to layer or integrate illicit funds into the legitimate economy, by selling them through auction houses, dealers, or online platforms. References: CAMS Certification Package - 6th Edition, Chapter 4: Conducting and Supporting the Investigation Process, pp. 97-98. Anti-money laundering and the art and antiquities market - a US and UK perspective, Mishcon de Reya LLP, 2022. Antiques: an unconventional money laundering tool, The Express Tribune, 2023. Art and Antiquities an Attractive Market for Money Laundering, FATF Argues, OCCRP, 2021.

• Question 682:

  Which situation involving a vendor presents increased AML and/or sanctions risk to an organization?

  A. The vendor's sales representative was a refugee from a sanctioned jurisdiction as a child.
  B. The vendor has no individuals that own or control more than 10% of the company .
  C. The vendor is organized as a privately held company .
  D. The vendor provides services to end users located in an area subject to economic sanctions .
  D. The vendor provides services to end users located in an area subject to economic sanctions .

  ---

  Businesses must not engage with entities in sanctioned jurisdictions without proper licensing. Option D (Correct): Providing services to sanctioned areas exposes an organization to OFAC or EU penalties . Option A (Incorrect): Personal history does not necessarily indicate AML risk . Option B (Incorrect): Lack of individual ownership above 10% does not inherently indicate risk. Option C (Incorrect): Private ownership alone does not pose an AML concern.

• Question 683:

  The purpose of an anti-money laundering program should be to do what?

  A. Detect allillegal activity perpetrated by customers
  B. Avoid criticism and sanctions from government regulators
  C. Focus monitoring efforts on riskier transactions and customers
  D. Detect and report cash structuring and suspicious wire transactions
  C. Focus monitoring efforts on riskier transactions and customers

• Question 684:

  Which three procedures should a compliance officer looking to revise an institution's CTF efforts include in accordance with the Wolfsberg Group's Statement on the Suppression of the Financing of Terrorism?

  A. Consulting applicable lists and taking appropriate actions to determine if customers appear on such lists
  B. Reporting matches from lists of known or suspected terrorists to relevant authorities
  C. Maintaining customer information to facilitate timely retrieval of such information
  D. Reviewing only original identification documents when verifying customers
  A. Consulting applicable lists and taking appropriate actions to determine if customers appear on such lists
  B. Reporting matches from lists of known or suspected terrorists to relevant authorities
  C. Maintaining customer information to facilitate timely retrieval of such information

  ---

  According to the Wolfsberg Group's Statement on the Suppression of the Financing of Terrorism1, a compliance officer should include the following three procedures in revising an institution's CTF efforts: Consulting applicable lists and taking appropriate actions to determine if customers appear on such lists. This procedure is important to prevent terrorist organizations from accessing the financial services of the institution and to comply with the sanctions and regulations imposed by competent authorities. The compliance officer should implement procedures for checking the customers against the lists of known or suspected terrorists or terrorist organizations issued by relevant authorities and taking reasonable and practicable steps to verify the identity and status of the customers. Reporting matches from lists of known or suspected terrorists to relevant authorities. This procedure is important to assist the authorities in their efforts to detect and disrupt terrorist financing and to fulfill the legal obligations of the institution. The compliance officer should report to the relevant authorities any matches from the lists of known or suspected terrorists or terrorist organizations consistent with the applicable laws and regulations regarding the disclosure of customer information. Maintaining customer information to facilitate timely retrieval of such information. This procedure is important to enable the institution to respond promptly and effectively to the enquiries and requests from the authorities and to enhance the quality and accuracy of the customer data. The compliance officer should explore ways of improving the maintenance of customer information to facilitate the timely retrieval of such information. References: Wolfsberg Statement on Anti-Terrorism Financing UNUSUAL CUSTOMER IDENTIFICATION CIRCUMSTANCES ?Customer furnishes unusual or suspicious identification documents or declines to produce originals for verification."

• Question 685:

  What are three factors a financial institution should examine with regard to a new customer who is opening up a new account? Choose 3 answers

  A. The country or location where the customer is from or does business
  B. The type and size of the business the customer runs
  C. The legal structure of the customer's business
  D. The previous financial institutions where the customer has banked
  A. The country or location where the customer is from or does business
  B. The type and size of the business the customer runs
  C. The legal structure of the customer's business

  ---

  A financial institution should examine the country or location where the customer is from or does business, the type and size of the business the customer runs, and the legal structure of the customer's business, because these factors can indicate the level of money laundering risk associated with the customer. For example, some countries or locations may have weak anti-money laundering laws or high levels of corruption, some types or sizes of businesses may be more prone to generating or concealing illicit funds, and some legal structures may be more complex or opaque than others, making it harder to identify the beneficial owners or controllers of the customer. References: ACAMS CAMS Certification Video Training Course1, Module 2: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Lesson 2: Know Your Customer (KYC) and Customer Due Diligence (CDD) ACAMS CAMS Certification Study Guide2, Chapter 2: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Section 2.2: Know Your Customer (KYC) and Customer Due Diligence (CDD), Pages 42-44

• Question 686:

  Which statement is the most accurate in describing who must comply with Office of Foreign Assets Control (OFAC) sanctions ?

  A. All U.S. citizens and permanent residents regardless of where they are located, all U.S.- incorporated entities and their foreign branches, and all individuals and entities within the United States.
  B. All U.S. citizens and permanent residents regardless of where they are located, all U.S.- incorporated entities excluding their foreign branches, and all individuals and entities within the United States.
  C. All U.S. citizens except those with dual nationality, U.S. permanent residents, all U.S.- incorporated entities, and all individuals within the United States.
  D. All U.S. citizens and permanent residents while located in the U.S., all U.S.-incorporated entities and their foreign branches, and all individuals within the United States.
  A. All U.S. citizens and permanent residents regardless of where they are located, all U.S.- incorporated entities and their foreign branches, and all individuals and entities within the United States.

  ---

  OFAC sanctions apply extraterritorially, meaning U.S. persons must comply regardless of their location. Option A (Correct): OFAC sanctions apply to all U.S. citizens, permanent residents, entities incorporated in the U.S. (including foreign branches), and individuals/entities within U.S. jurisdiction. Option B (Incorrect): Foreign branches of U.S.-incorporated entities must comply with OFAC sanctions. Option C (Incorrect): OFAC sanctions apply to all U.S. citizens, including dual nationals. Option D (Incorrect): U.S. citizens and permanent residents must comply with OFAC sanctions even when located abroad. Best Practices for OFAC Compliance: Screen all transactions against the Specially Designated Nationals (SDN) list. Ensure compliance programs extend to foreign branches and subsidiaries. Monitor international business activities for potential sanctions violations.

• Question 687:

  An anti-money laundering specialist notes a significant reduction in suspicious transaction report filings at a particular branch. Which of the following actions is most appropriate?

  A. Place the branch on the watchlist to assure a review during the next quarter.
  B. Analyze the branch activity reports to determine whether there has been a decrease in branch activity.
  C. Review branch exception reports to determine changes in activity in accordance with customer profiles.
  D. Review staff records to see whether inexperienced personnel are in critical positions without appropriate training.
  C. Review branch exception reports to determine changes in activity in accordance with customer profiles.

  ---

  A significant reduction in suspicious transaction report (STR) filings at a particular branch could indicate that the branch is not properly identifying and reporting suspicious activities, or that the branch is experiencing a change in customer behavior or risk profile. Therefore, the most appropriate action for an anti-money laundering specialist is to review the branch exception reports, which are reports that highlight transactions or activities that deviate from the expected or normal patterns, based on the customer profiles and risk assessments. By reviewing the branch exception reports, the specialist can determine whether there are any changes in activity that warrant further investigation or reporting, or whether there are any gaps or weaknesses in the branch's compliance program or procedures. The other options are not as appropriate as reviewing the branch exception reports, as they do not directly address the issue of suspicious activity reporting. Placing the branch on the watchlist may be a subsequent action, but it does not provide immediate insight into the reason for the reduction in STR filings. Analyzing the branch activity reports may show whether there has been a decrease in branch activity, but it does not explain why the activity has decreased, or whether the remaining activity is suspicious or not. Reviewing the staff records may reveal whether inexperienced personnel are in critical positions without appropriate training, but it does not account for other factors that may affect the branch's compliance performance, such as management oversight, internal controls, or customer risk. References: ACAMS CAMS Certification Study Guide (6th edition), page 361; ACAMS CAMS Certification Video Training Course, Module 2, Lesson 12; What Is a Suspicious Activity Report (SAR)? Triggers and Filing3; Reporting suspicious transactions to FINTRAC4.

• Question 688:

  According to recommendations from the Financial Action Task Force, what role does a country's financial intelligence unit play in safeguarding against money laundering?

  A. Monitors monthly public statistics on the economy
  B. Generates currency transaction reports to send to the central bank
  C. Assists the pursuit of criminal activity by producing suspicious activity reports
  D. Analyzes data on suspicious activity reports
  C. Assists the pursuit of criminal activity by producing suspicious activity reports

  ---

  According to the Financial Action Task Force (FATF), a country's financial intelligence unit (FIU) plays a key role in safeguarding against money laundering and terrorist financing. One of the main functions of an FIU is to receive, analyze, and disseminate suspicious activity reports (SARs) submitted by financial institutions and other obligated entities. By analyzing SARs, an FIU can identify trends, patterns, and other intelligence related to money laundering and terrorist financing, which can assist in the pursuit of criminal activity. While an FIU may also generate currency transaction reports (CTRs) or other types of financial reports, these functions are not specific to safeguarding against money laundering and terrorist financing. Similarly, while monitoring monthly public statistics on the economy may be an important aspect of macroeconomic analysis, it is not a specific role of an FIU in safeguarding against money laundering and terrorist financing.

• Question 689:

  An account officer who maintains an excellent relationship with the finance manager for a correspondent bank customer learns that many records for the correspondent bank have been requested by law enforcement. In the interest of maintaining a good relationship with the customer, the account officer sets up a meeting to discuss the legal request with the customer. The account officer intends to discuss points related to the investigation during this meeting. Which of the following should an anti-money laundering specialist recommend?

  A. Discuss all the points being investigated by law enforcement to ensure the correspondent bank is well prepared when approached.
  B. Let his manager know what conversations have taken place with the customer and docu-ment the account file accordingly.
  C. Limit discussions about the investigation with the customer and be satisfied that he has provided proper notice to the customer.
  D. The meeting should be cancelled as he has already behaved inappropriately by alerting the customer to the investigation.
  D. The meeting should be cancelled as he has already behaved inappropriately by alerting the customer to the investigation.

  ---

  the U.S. government has the authority to seize and forfeit funds in a correspondent account of a non-U.S. bank if the funds are involved in or traceable to a money laundering offense, regardless of where the offense occurred. This is based on the USA PATRIOT Act, which expanded the definition of "proceeds of specified unlawful activity" to include any property that is derived from or traceable to a foreign offense that would be a predicate offense if committed in the U.S12 References: 1: ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 4, page 137 2: USA PATRIOT Act, Title III, Section 319(b)

• Question 690:

  Which of the following is the financial stage of money laundering?

  A. integration
  B. structuring
  C. off shoring
  D. placement
  D. placement

  ---

  According to the CAMS study guide, chapter 1, page 91, placement is the first stage of money laundering, where the illicit funds are introduced into the financial system. This stage involves the highest risk of detection, as the money launderers may use various methods to avoid suspicion, such as structuring, commingling, or using cash-intensive businesses. Placement is followed by layering and integration, which are the second and third stages of money laundering, where the illicit funds are moved and disguised through multiple transactions and entities, and then integrated into the legitimate economy as seemingly legal assets. The other options are not the financial stages of money laundering, although they may be related to some aspects or techniques of money laundering. Option A, integration, is the final stage of money laundering, not the first. Option B, structuring, is a method of placement, not a stage of money laundering. Structuring, also known as smurfing, is the practice of breaking down large amounts of cash into smaller deposits or transactions to avoid reporting thresholds or scrutiny. Option C, off shoring, is a term that refers to the relocation of assets or activities to another jurisdiction, usually for tax or regulatory advantages. Off shoring may be used by money launderers to exploit the differences or loopholes between jurisdictions, but it is not a stage of money laundering. References: 1: ACAMS CAMS Study Guide - 6th Edition, Chapter 1, page 9: https://www.acams.org/wp-content/uploads /2019/09/ACAMS-CAMS-Study-Guide-6th-Edition-Chapter-1.pdf