ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 701:

  Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire transfer is deemed suspicious by Bank A. Who should Bank A file a suspicious transaction report on?

  A. The transaction in Country A
  B. Bank B in Country A
  C. The transaction in Country B
  D. Bank C in Country C
  A. The transaction in Country A

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  According to the CAMS Certification Package - 6th Edition1, a financial institution that processes a wire transfer is required to file a suspicious transaction report (STR) in the jurisdiction where it is located, if it detects any red flags or indicators of money laundering, terrorism financing, or other financial crimes. The financial institution does not need to file an STR in the jurisdictions of the originator or the beneficiary of the wire transfer, unless it has a branch or a subsidiary there. Therefore, the correct answer is A. The transaction in Country A. References: CAMS Certification Package - 6th Edition1, Chapter 4: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Section: Wire Transfers, pp. 161- 162.

• Question 702:

  A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?

  A. The customer engages in large trading in securities that are liquid or highly priced from the trading account.
  B. The customer's repeated trading in securities that are low priced and low volume counters.
  C. The customer receives many incoming wire transfers from related parties to the trading account.
  D. The customer accumulates securities of a low volume counter in small increments on a weekly basis.
  D. The customer accumulates securities of a low volume counter in small increments on a weekly basis.

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  The most concerning trading pattern for a compliance officer when a new customer has been onboarded in a securities firm is the customer accumulating securities of a low volume counter in small increments on a weekly basis. This type of behavior could indicate that the customer is attempting to obscure their identity or the true purpose of their trading activity, which can be indicative of money laundering or other suspicious activity. (CAMS Manual, 6th Edition, Page 170).

• Question 703:

  Under the Egmont Group Principles, information exchange among financial intelligence units (FlUs) should be conducted:

  A. with set limits on the amount of financial and administrative information provided.
  B. only if the status of the foreign FIU is related to law enforcement.
  C. freely, spontaneously, and upon request, on the basis of reciprocity.
  D. without the expectation of reciprocity on how the information will be used.
  C. freely, spontaneously, and upon request, on the basis of reciprocity.

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  Under the Egmont Group Principles, information exchange among financial intelligence units (FIUs) should be conducted freely, spontaneously, and upon request, on the basis of reciprocity. This means that FIUs should be willing to share information without the expectation of reciprocity on how the information will be used. The goal is to facilitate the cooperation and exchange of information among FIUs to combat money laundering, terrorist financing, and other financial crimes.

• Question 704:

  What is the importance of a risk-based approach (RBA) and building controls commensurate with risks ?

  A. An RBA allows organizations to adopt a more flexible set of measures and to use resources more effectively to control specific risks.
  B. An RBA makes it easier for organizations to implement controls faster to counter all applicable risks.
  C. An RBA is internationally accepted by customers and stakeholders, making it a more appropriate risk control mechanism.
  D. An RBA more clearly dictates which resources are to be used to control an organization's overall residual risks.
  A. An RBA allows organizations to adopt a more flexible set of measures and to use resources more effectively to control specific risks.

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  A Risk-Based Approach (RBA) allows financial institutions to allocate compliance resources effectively and prioritize higher-risk areas for enhanced due diligence (EDD) . Option A (Correct): An RBA enables institutions to tailor their AML controls based on risk exposure, ensuring better resource allocation. Option B (Incorrect): While RBA improves efficiency , it does not guarantee faster implementation of controls. Option C (Incorrect): RBA is a regulatory requirement , but it is not necessarily determined by customer acceptance . Option D (Incorrect): RBA provides guidance on risk mitigation , but it does not dictate specific resource usage . Benefits of a Risk-Based Approach (RBA): Efficient use of compliance resources by focusing on high-risk transactions, customers, and geographies . Regulatory compliance alignment with FATF, Basel Committee, and Wolfsberg Group AML principles . Flexibility to adjust AML controls as new threats emerge. Best Practices for Implementing RBA in AML Compliance: Conduct enterprise-wide risk assessments (EWRAs). Classify customers and transactions based on risk levels. Apply enhanced due diligence (EDD) for high-risk clients.

• Question 705:

  An auction house dealing in fine art and antiques sells a well-known painting at a price of $12 million to an agent bidding for a group of local investors. The same painting sold ten years prior at auction for $5 million. The auction house

  receives payment for the painting via wire transfer from an account maintained in an offshore jurisdiction by the investor group. No beneficial ownership information is available for the account.

  What are the two money laundering red flags? (Choose two.)

  A. The payment is received via wire transfer.
  B. An agent bids on the painting for a group of investors.
  C. The painting has more than doubled its value in ten years.
  D. Payment is received from an account in an offshore jurisdiction.
  E. Lack of beneficial ownership details for the originating account.
  D. Payment is received from an account in an offshore jurisdiction.
  E. Lack of beneficial ownership details for the originating account.

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  The payment received from an account in an offshore jurisdiction and the lack of beneficial ownership details for the originating account are two money laundering red flags. Offshore jurisdictions are often used by money launderers to hide the source and destination of their funds, as they typically have low transparency and weak regulatory oversight. The absence of beneficial ownership information makes it difficult to identify the true owners and controllers of the funds, and to assess the legitimacy and risk of the transaction. These factors increase the possibility that the payment is related to money laundering, tax evasion, or other illicit activities.

• Question 706:

  Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?

  A. Records identifying the owners of each foreign bank
  B. Section 314(b) information sharing results related to foreign correspondent accounts
  C. Purchase of monetary instruments of $3,000 or more involving foreign correspondent accounts
  D. A suspicious activity report filed and the supporting documentation involving foreign correspondent accounts
  A. Records identifying the owners of each foreign bank

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  According to Section 319(b) of the USA PATRIOT Act, U.S. financial institutions that provide correspondent accounts to foreign banks must maintain records of the owners of the foreign banks and the name and address of a U.S. resident authorized to accept service of legal process for records regarding the correspondent accounts. This requirement is intended to prevent foreign shell banks from accessing the U.S. financial system and to facilitate the investigation and prosecution of money laundering and terrorist financing activities involving foreign banks. References: US PATRIOT ACT | State Street Foreign Correspondent Banking Fact Sheet - U.S. Department of the Treasury FACT SHEET for Section 312 of the USA PATRIOT Act Final Regulation and Notice of Proposed Rulemaking | FinCEN.gov Reference: https://www.moneylaunderingnews.com/2017/10/aml-information-sharing-in-the-u-s/

• Question 707:

  Which three are examples of best practices terms of ensuring an adequate AML program?

  A. Engage an independent party to perform a periodic review of the program
  B. Review applicable domestic and international AML guidance
  C. Perform a risk analysis on a regular basis and compare it to the coverage of the AML program
  D. Review the accuracy of account opening applications
  B. Review applicable domestic and international AML guidance
  C. Perform a risk analysis on a regular basis and compare it to the coverage of the AML program
  D. Review the accuracy of account opening applications

• Question 708:

  What is suspicious activity or red flag with regard to a customer's activity? Choose 3 answers

  A. Paying the tellers he deals with a regular gratuity
  B. Exchanging small denomination bills for large ones
  C. Engaging in wire transactions with an offshore account
  D. Asking about the bank's fee schedule for a series of transactions
  A. Paying the tellers he deals with a regular gratuity
  B. Exchanging small denomination bills for large ones
  C. Engaging in wire transactions with an offshore account

• Question 709:

  Which are the requirements of the Filth AML Directive of the EU? {Select Two.)

  A. Promoting the record keeping obligations of banks to the maximum amount of data necessary for the purposes of AML investigations
  B. Broadening the criteria for assessing high-risk third countries
  C. Extending AML rules to entities that provide virtual currency services
  D. Developing a variant approach m the strategy for the treatment of organized crime and terrorism threats
  E. Providing information access to financial intelligence units according to the differences in the nature of their functions, competences, and powers
  A. Promoting the record keeping obligations of banks to the maximum amount of data necessary for the purposes of AML investigations
  C. Extending AML rules to entities that provide virtual currency services
  E. Providing information access to financial intelligence units according to the differences in the nature of their functions, competences, and powers

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  A. Promoting the record-keeping obligations of banks to the maximum amount of data necessary for the purposes of AML investigations: "The Fifth AML Directive emphasizes that record-keeping obligations of banks must extend to the maximum amount of data necessary for the purposes of anti-money laundering investigations" (CAMS Manual, 6th Edition, page 79). C. Extending AML rules to entities that provide virtual currency services: "The 5AMLD expands the scope of the EU's anti-money laundering rules to include virtual currency exchange platforms and custodian wallet providers" (CAMS Manual, 6th Edition, page 80).

• Question 710:

  What is the most effective criterion for determining the beneficial ownership of funds?

  A. Having signature authority over the account
  B. Being the person in whose name an account is opened with a financial institution
  C. Having control over such funds or entitlement to such funds
  D. Being a person who is the trusted party in a correspondent banking relationship
  C. Having control over such funds or entitlement to such funds

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  According to the FATF Recommendations, the international standard for anti-money laundering and counter- terrorist financing, beneficial owners are the natural persons who ultimately own or control a customer or the natural persons on whose behalf a transaction is being conducted1 The beneficial ownership criterion is not based on the legal title or the nominal ownership of the funds, but on the effective control or the ultimate entitlement to the funds. Therefore, having signature authority over the account, being the person in whose name an account is opened, or being a trusted party in a correspondent banking relationship are not sufficient to determine the beneficial ownership of funds. These may be indicators of legal ownership or nominee arrangements, but they do not necessarily reflect the true ownership or control of the funds. The most effective criterion for determining the beneficial ownership of funds is having control over such funds or entitlement to such funds, either directly or indirectly, through ownership, voting rights, contractual agreements, trusts, or other means2345 References: 1: FATF Recommendations, 2012, Recommendation 10 and Interpretive Note 2: Beneficial Ownership Meaning and Regulation, Investopedia, 2022 3: Ultimate Beneficial Ownership: Understanding Where The Money Comes From, ComplyAdvantage, 4: Beneficial ownership and Irish investment funds, AandL Goodbody, 2021 5: Asset Management and Investment Funds Legal and Regulatory Update, Arthur Cox, 2020