ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 691:

  Which statement best describes a key aspect of the AML Directive of the EU regarding business relationships and transactions with high-risk third countries?

  A. Obliged entities should voluntarily consider the implementation of increased external audit requirements for branches and subsidiaries located in high-risk countries.
  B. Obliged entities, in accordance with the member state regulations, should determine at a national level the measures that can be used for enhanced due diligence.
  C. Obliged entities should implement additional mitigating measures complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach.
  D. Obliged entities should not take into account specific circumstances when performing enhanced due diligence measures.
  C. Obliged entities should implement additional mitigating measures complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach.

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  According to the AML Directive of the EU, obliged entities, such as banks and other financial institutions, are required to apply enhanced vigilance in business relationships and transactions involving high-risk third countries, which are those identified by the Commission as having strategic deficiencies in their anti-money laundering and countering the financing of terrorism regimes1. The types of enhanced vigilance requirements are basically extra checks and control measures which are defined in article 18a of the Directive1. However, these requirements are not exhaustive, and obliged entities should also implement additional mitigating measures that are complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach1. This means that obliged entities should assess the level of risk posed by each customer, product, service, transaction, or delivery channel, and apply appropriate measures to mitigate those risks2. The additional mitigating measures may include, for example, obtaining additional information on the customer and the beneficial owner, applying additional elements of enhanced monitoring, increasing the frequency and intensity of transaction testing, or requiring the first payment to be carried out through an account in the customer's name with a bank subject to similar customer due diligence standards1. References: 1: Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (Text with EEA relevance) 2: Guidance on Risk Factors, EBA, 2021 Reference: https://www.nortonrosefulbright.com/en/knowledge/publications/8f84c163/the-eus-fifth-anti- money-laundering-directive-a-regulatory-compliance-perspective

• Question 692:

  An anti-money laundering specialist working at a bank just received a legal request from a law enforcement agency mandating the release of all financial transaction records relating to an account at the bank. The specialist immediately recognizes the account as one owned by the bank Chief Executive Officers brother. During research to gather the requested documents, the specialist finds several internal memos he had sent to the bank president with concerns regarding possible suspicious activity relating to this account. The specialist recalls the bank president verbally responded to each memo with an explanation of the activity and indicated there was no cause for concern. What should the specialist do with respect to these internal memos?

  A. Place these memos in his personal files in case they are subsequently requested
  B. Ask the bank president to document his instructions to the specialist
  C. Call the law enforcement agent and suggest he modify the legal request to include these memos
  D. Advise the bank's senior legal advisor of the situation
  D. Advise the bank's senior legal advisor of the situation

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  the specialist should inform the bank's senior legal advisor of the situation and seek guidance on how to handle the legal request and the internal memos. The specialist should not take any action that could compromise the integrity of the legal request, the bank's anti-money laundering program, or the specialist's own professional obligations. The specialist should not place the memos in his personal files, as this could be seen as hiding or tampering with evidence. The specialist should not ask the bank president to document his instructions, as this could create a conflict of interest or a perception of undue influence. The specialist should not call the law enforcement agent and suggest he modify the legal request, as this could be seen as interfering with the investigation or tipping off the account holder. References: Legal Sector Affinity Group (LSAG) Anti-Money Laundering Guidance for the Legal Sector (January 2021) p. 1321 ACAMS: Certified Anti-Money Laundering Specialist | ACAMS2 Anti-Money Laundering ?The Law Society of Singapore3

• Question 693:

  When implementing a risk-based approach related to casinos, which risks are related to the customer as an individual? (Choose two.)

  A. Transfer between customers
  B. Casual customers
  C. Improper use of third parties as customers
  D. Customer from a high-risk country
  E. Use of casino deposit accounts by the customer
  B. Casual customers
  D. Customer from a high-risk country

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  When implementing a risk-based approach related to casinos, the risks related to the customer as an individual are mainly based on the customer's profile, behaviour, source of funds, and geographic location. Among the options given, B and D are the most relevant factors that could indicate a higher risk of money laundering or terrorist financing. Casual customers are those who do not have a regular or established relationship with the casino, and who may visit the casino only once or occasionally. They may not provide sufficient or reliable identification information, or may use false or stolen identities. They may also engage in suspicious transactions, such as large cash purchases of chips, minimal or no gaming activity, or frequent transfers of chips between customers. Casual customers pose a higher risk of money laundering or terrorist financing because they are harder to verify, monitor, and trace by the casino operators. Customer from a high-risk country is a customer who resides in, or has links to, a country that is subject to sanctions, embargoes, or similar measures, or that is identified by credible sources as having significant levels of corruption, or as being a source, transit, or destination of illicit funds. Such customers pose a higher risk of money laundering or terrorist financing because they may be involved in, or connected to, criminal or terrorist activities, or may be using funds that are derived from or intended for such activities. References: The main reference for this question is the document titled "FATF Guidance on the Risk-Based Approach for Casinos" published by the FATF in October 2008. You can access it by clicking here. You can also find more information about the risk-based approach and the customer risks for casinos on the Gambling Commission website and the Exam Answer website.

• Question 694:

  Once a financial institution has reported suspicious transactions on a valued customer, it should cooperate with competent authorities by

  A. Maintaining adequate written documentation of all individuals and transactions reported.
  B. Hinting to the customer that she should come in and explain her behavior.
  C. Submitting information upon receiving a legal request from parties involved in a civil law-suit.
  D. Providing the supporting documentation to competent authorities upon request.
  C. Submitting information upon receiving a legal request from parties involved in a civil law-suit.

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  Structuring transactions is a common method of money laundering, where cash deposits or withdrawals are broken down into smaller amounts to avoid reporting or record-keeping requirements. Employees who unintentionally assist customers in structuring transactions may not be aware of the legal and regulatory implications of their actions, or may have been misled or coerced by the customers. Therefore, the most appropriate and proportionate response is to provide remedial training to these employees, to ensure they understand the anti-money laundering policies and procedures, the red flags of suspicious activity, and their reporting obligations. Terminating, contacting law enforcement, or transferring these employees may be excessive, premature, or ineffective measures, depending on the circumstances and the level of involvement of the employees. References: ACAMS Study Guide for the CAMS Certification Examination - 6th Edition, Chapter 2: Money Laundering Risks and Methods, page 31. ACAMS CAMS Certification Video Training Course, Module 2: Money Laundering Risks and Methods, Lesson 2.3: Structuring and Smurfing.

• Question 695:

  Which product type is subject to U.S. extra-jurisdictional reach over non-U.S. banks and non-U.S. persons under the USA PATRIOT Act?

  A. Commercial lending
  B. Trade finance
  C. Private banking
  D. Correspondent banking
  D. Correspondent banking

• Question 696:

  A law enforcement action alleged that, over the course of two months, defendants engaged in a series of copper, gold, crude oil, and natural gas futures transactions on an electronic trading platform. One defendant repeatedly bought future contracts at low prices from another party and immediately sold them back at higher prices , effectively ensuring that one defendant made profits while the other took losses , even though there was no actual market risk involved . What is the name of this typology ?

  A. Short position
  B. Reverse flip
  C. Wash trading
  D. Bid-ask spread
  C. Wash trading

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  Wash trading is a form of market manipulation where two parties coordinate to create artificial trading activity , often for money laundering, tax fraud, or price manipulation . Why Option C (Wash Trading) is Correct: No real market risk is taken--transactions are simply cycled between the same parties. Creates an illusion of liquidity or inflates asset prices artificially . Common in commodities, stocks, cryptocurrency, and futures markets. Red flag for money laundering: Criminals may use wash trading to layer illicit funds through financial markets . Why Other Options Are Incorrect: Option A (Short Position): A short position involves selling an asset one does not own and repurchasing it later at a lower price--this does not describe the described scheme. Option B (Reverse Flip): A reverse flip is a real estate money laundering typology , not applicable here. Option D (Bid-Ask Spread): This refers to the difference between the highest price a buyer is willing to pay and the lowest price a seller will accept , but it does not involve fraudulent trading. AML Risks in Wash Trading: Can be used to move illicit funds through financial markets. Artificially increases trading volume and market price manipulation. Frequently flagged in AML transaction monitoring systems. Best Practices for Detecting Wash Trading: Monitor repetitive trading between related entities. Look for circular transactions with no economic justification. Use AI-based transaction monitoring to detect high-frequency wash trades.

• Question 697:

  What should an effective anti-money laundering training program include?

  A. Computer-based modules titles differently for each job description in the bank
  B. Random testing of employees to ensure proper understanding of policies
  C. Real-life money laundering examples
  D. Lists of anti-money laundering regulations
  C. Real-life money laundering examples

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  An effective anti-money laundering training program should include real-life money laundering examples to illustrate the concepts and strategies for detecting and preventing money-laundering activity. Real-life examples can help employees to understand the risks, methods, indicators, and impacts of money laundering, as well as the roles and responsibilities of different staff members in combating it. Real-life examples can also enhance the engagement, retention, and application of the knowledge gained from the training program. References: The main references for this question are the following sources: The document titled "Anti-Money Laundering Awareness Training" published by ACAMS. You can access it by clicking here. This document states that "ACAMS AML General Awareness Training equips employees with knowledge of basic anti-money laundering (AML) principles" and that it is "based on real-life industry scenarios with interactive content to help learning stick". The document titled "Anti-Money Laundering (AML) Training" published by LIMRA. You can access it by clicking here. This document states that "LIMRA's AML training program provides training for insurance and securities producers and home office employees" and that it "uses real-life scenarios to help learners understand how to apply AML principles to their everyday work".

• Question 698:

  OFAC-issued regulations apply to which entities? (Choose two.)

  A. Intermediaries transacting with US banks
  B. Foreign banks with US customers
  C. Foreign subsidiaries of US banks
  D. US branches of a foreign bank E. Foreign import-export companies
  C. Foreign subsidiaries of US banks
  D. US branches of a foreign bank E. Foreign import-export companies

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  OFAC-issued regulations apply to all U.S. persons, including U.S. banks, bank holding companies, and non- bank subsidiaries, regardless of where they are located. This means that foreign subsidiaries of U.S. banks and U.S. branches of a foreign bank are also subject to OFAC compliance. However, intermediaries transacting with U.S. banks, foreign banks with U.S. customers, and foreign import-export companies are not necessarily subject to OFAC regulations, unless they are involved in transactions that involve U.S. jurisdiction or U.S.persons.

• Question 699:

  How can awareness be raised within countries that do not have sanctions regulatory regimes ? (Select Two.)

  A. Restrict trade between countries that have robust AML/CFT and sanctions regulatory regimes and those that do not.
  B. AFC (Anti-Financial Crime) and sanctions-related seminars, webinars, and training within these countries.
  C. Enforcement and pecuniary fines against these countries.
  D. Bilateral conversations and cooperation between governments.
  B. AFC (Anti-Financial Crime) and sanctions-related seminars, webinars, and training within these countries.
  D. Bilateral conversations and cooperation between governments.

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  Many jurisdictions lack robust sanctions frameworks, requiring international cooperation and education to improve compliance. Option B (Correct): Educational initiatives such as AML/sanctions training and workshops help raise awareness and build capacity. Option D (Correct): Bilateral cooperation allows knowledge-sharing and technical assistance between regulatory authorities. Why Other Options Are Incorrect: Option A (Incorrect): Trade restrictions may pressure non-compliant nations, but they do not directly improve sanctions awareness. Option C (Incorrect): Enforcing fines without prior education or assistance is ineffective and may create diplomatic tensions. Best Practices for Sanctions Awareness and Compliance: Develop international AML/sanctions training programs for emerging markets. Encourage diplomatic engagement to strengthen legal frameworks. Leverage FATF's Mutual Evaluation process to assess progress.

• Question 700:

  Which of the following approaches is best when determining the timeline to complete an internal investigation and report a suspicious activity report (SAR) to the local Financial Intelligence Unit (FIU)?

  A. Follow local regulatory requirements for reporting periods.
  B. Report the SAR within 30 days.
  C. Use a matrix based on the complexity of an investigation.
  D. Act on the professional judgment of a senior manager.
  A. Follow local regulatory requirements for reporting periods.

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  The timing of filing a SAR is strictly regulated and depends on jurisdictional laws. Option A (Correct): Regulatory requirements (e.g., FinCEN in the U.S. mandates filing within 30 days ) define the SAR reporting timeline . Option B (Incorrect): While 30 days is the U.S. standard , other jurisdictions have different deadlines (e.g., EU AMLD mandates "prompt" filing ). Option C (Incorrect): Risk-based assessments are useful, but regulatory deadlines must be followed . Option D (Incorrect): Subjective decision-making could lead to compliance violations. FinCEN SAR Filing Guidelines, FATF Recommendation 20 (Reporting Suspicious Transactions), EU AMLD Directives .