ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 741:

  How should a compliance officer respond to law enforcement agencies' request for information on a customer undergoing an investigation?

  A. Collaborate with the financial institution's (FI's) designated department to determine the appropriate course of action to comply with the request.
  B. Gather all requested documentation and send via secure email to the requesting authority.
  C. Share details of the investigation with respective colleagues who deal with this customer type on a daily basis.
  D. Freeze account assets and advise the customer that assets will not be released until the investigation has been completed
  A. Collaborate with the financial institution's (FI's) designated department to determine the appropriate course of action to comply with the request.

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  A compliance officer should cooperate with the law enforcement inquiry as much as possible, but also ensure that the request is valid, lawful, and does not violate any confidentiality or privacy obligations. Therefore, the compliance officer should collaborate with the FI's designated department, such as the legal counsel, the senior management, or the board of directors, to determine the appropriate course of action to comply with the request12. The compliance officer should also ensure that all communication, written and oral, is funneled through a centralized place, and that the FI maintains a record of the request and the response12. References: 1: Requests by Law Enforcement for Financial Institutions to Maintain Accounts, FinCEN, 2014 2: Best Practices for Compliance and Enforcement-Related Information Requests, EPA, 2018 Reference: https://www.acams.org/en/resources/aml-glossary-of-terms

• Question 742:

  Under the USA PATRIOT Act, in which scenario would the US not have jurisdiction?

  A. US bank subsidiaries located in foreign jurisdictions
  B. Foreign branch of a bank located in the US
  C. Foreign bank with a US correspondent account
  D. Shell banks operating in foreign jurisdictions
  D. Shell banks operating in foreign jurisdictions

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  shell banks are banks that have no physical presence in any country and are not affiliated with any regulated financial institution. They are often used by money launderers and terrorist financiers to hide their illicit activities and evade regulatory oversight. The USA PATRIOT Act prohibits US financial institutions from opening or maintaining correspondent accounts with shell banks, and requires them to take reasonable steps to ensure that their foreign correspondent banks do not provide services to shell banks12. Therefore, the US does not have jurisdiction over shell banks operating in foreign jurisdictions, unless they are involved in transactions that violate US laws or sanctions. References: USA PATRIOT Act Section 313: Prohibition on U.S. Correspondent Accounts with Foreign Shell Banks1 Fact Sheet Regarding the Treasury Department's Use of Sanctions Authorities to Combat Money Laundering and Terrorist Financing3 Reference: https://www.congress.gov/107/plaws/publ56/PLAW-107publ56.htm

• Question 743:

  Which of the following scenarios best justifies why a customer's account might be closed by a financial institution?

  A. The account has transactions that triggered multiple suspicious activity reports (SARs) .
  B. The account shows periodic fixed amount remittances for tuition fees .
  C. The customer uses a shipping company dealing with specially designated nationals (SDNs) .
  D. The customer is the object of a civil subpoena .
  A. The account has transactions that triggered multiple suspicious activity reports (SARs) .

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  Accounts may be closed if they pose high money laundering or sanction risks . Option A (Correct): Multiple SAR filings indicate high risk , possibly requiring account closure if AML concerns persist. Option B (Incorrect): Tuition payments are a legitimate purpose for fund transfers. Option C (Incorrect): Indirect dealings with SDNs require compliance review , but not immediate account closure . Option D (Incorrect): Civil subpoenas alone do not justify account termination .

• Question 744:

  Which scenario indicates potential money laundering activity by a lawyer?

  A. A lawyer's trust account regularly receives wire transfers from unknown remitters from a higher- risk country and immediately transfers the same amount of funds received to a known beneficiary 's account in a low-risk country.
  B. A lawyer located in a higher-risk country deposits their firm's bank draft issued from their trust account to another lawyer's trust account located in a low-risk country for legal services rendered.
  C. A lawyer's trust account receives a large-value wire transfer from a regulated insurance company and immediately transfers the same amount of funds received to the beneficiary's bank account located in a low-risk country.
  D. A lawyer's trust account receives a large wire transfer deposit from a client that wanted to purchase a piece of property and then transfers the same amount to the property seller's lawyer's trust account.
  A. A lawyer's trust account regularly receives wire transfers from unknown remitters from a higher- risk country and immediately transfers the same amount of funds received to a known beneficiary 's account in a low-risk country.

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  Lawyers' trust accounts are commonly exploited for money laundering , particularly for layering and integration stages . Option A (Correct): Receiving and immediately forwarding wire transfers from unknown sources in a high-risk jurisdiction is a strong red flag for money laundering. Option B (Incorrect): While legal professionals in high-risk countries require monitoring, the transaction itself is not necessarily suspicious. Option C (Incorrect): Insurance company payments are typically traceable, reducing money laundering risk. Option D (Incorrect): Lawyers handling real estate transactions is normal unless the deal structure is highly irregular. Red Flags for Money Laundering in Legal Professions: Use of client accounts to receive and distribute funds without legal purpose. Multiple transactions involving unrelated third parties. Legal services that do not align with the nature of payments received. Best Practices for AML in Legal Professions: Conduct enhanced due diligence (EDD) on high-risk transactions. Monitor transactions involving high-risk jurisdictions. File Suspicious Activity Reports (SARs) for unexplained transactions.

• Question 745:

  At a small community bank, the compliance officer identifies unusual activity on a customer, who with his personal and company accounts, is the bank's largest depositor. The customer's companies have significant balances on their outstanding loans. The compliance officer notices that there is a lot of unusual movements of money between the customer's individual and business accounts. After filing a suspicious transaction report (STR), the compliance officer gets a call from law enforcement indicating that they want the bank to keep the account open while they conduct an investigation into the customer.

  How should the compliance officer escalate this information to the board of directors?

  A. By providing a copy of the STR to the board
  B. By informing the regulator to bring it up with their next meeting with the board
  C. By providing a high level summary of the activity and the interactions with law enforcement
  D. By providing a copy of the letter from law enforcement asking the bank to keep the account open.
  C. By providing a high level summary of the activity and the interactions with law enforcement

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  The compliance officer should provide a high level summary of the activity and the interactions with law enforcement to the board of directors, as this would be the most appropriate way to escalate the information without compromising the confidentiality of the STR or the ongoing investigation. Providing a copy of the STR or the letter from law enforcement could expose the bank to legal risks or jeopardize the investigation. Informing the regulator to bring it up with the board would not be sufficient, as the compliance officer has the responsibility to report directly to the board on significant compliance issues. References: ACAMS CAMS Certification Video Training Course, Module 5: Risk Management, Lesson 5.3: Reporting to Senior Management and the Board1 ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 5: Risk Management, Section 5.3: Reporting to Senior Management and the Board2

• Question 746:

  Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.)

  A. Law enforcement and other authorities should have access to financial information that is pertinent to the investigation.
  B. Every country should share all their information with foreign law enforcement and government authorities to facilitate rapid investigations.
  C. Law enforcement and other authorities should be allowed to establish and utilize joint investigative teams with law enforcement in other countries.
  D. Law enforcement and other authorities should not expedite information sharing between countries to ensure that all information is provided at the same time to avoid premature conclusions.
  A. Law enforcement and other authorities should have access to financial information that is pertinent to the investigation.
  C. Law enforcement and other authorities should be allowed to establish and utilize joint investigative teams with law enforcement in other countries.

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  A money laundering investigation that involves multiple countries can be challenging due to different legal systems, languages, cultures, and levels of cooperation. Two factors that can assist such an investigation are: Law enforcement and other authorities should have access to financial information that is pertinent to the investigation. This can help them trace the flow of illicit funds, identify the perpetrators and beneficiaries, and gather evidence for prosecution. Financial information can be obtained from various sources, such as financial institutions, financial intelligence units, regulators, and international organizations. Law enforcement and other authorities should be allowed to establish and utilize joint investigative teams with law enforcement in other countries. This can enhance coordination, communication, and information sharing among the authorities involved, and allow them to pool resources, expertise, and evidence. Joint investigative teams can also facilitate mutual legal assistance and extradition requests. References: Financial Action Task Force (FATF), International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, The FATF Recommendations, February 2012, updated June 2019, Recommendation 40, pp. FATF, Best Practices on Establishing and Operating a Joint Investigative Team, June 2020, pp. 5-6 FATF, Money Laundering and Terrorist Financing Investigations, June 2018, pp. 11-12

• Question 747:

  A financial institution opens a mortgage loan for a customer. During a subsequent internal review of the loan, it was noted that the appraisal used to support the loan was performed by an appraiser who was not on the institution's approved appraiser list. This exception was approved by the senior loan underwriter. The reviewer, who had examined other loans from the same general area, noted that the value on the loan appeared significantly higher than on other comparable properties. Which of the following should the anti-money laundering specialist recommend next?

  A. Determine whether the loan underwriter reviewed the appraiser's license for validity.
  B. Alert local law enforcement regarding a potential collusive relationship between the un-derwriter and appraiser.
  C. Document the underwriter's actions prior to filing a suspicious transaction report.
  D. Train the appraiser on anti-money laundering compliance for high-end real estate loans.
  C. Document the underwriter's actions prior to filing a suspicious transaction report.

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  According to the Anti-Money Laundering Specialist (the 6th edition) resources, one of the red flags for money laundering in real estate transactions is the use of an appraiser who is not on the approved list of the financial institution. This could indicate a possible collusion between the appraiser and the borrower or the underwriter to inflate the value of the property and obtain a higher loan amount. The anti-money laundering specialist should document the underwriter's actions and the reasons for approving the exception, as well as the discrepancy between the appraised value and the market value of the property. The specialist should then file a suspicious transaction report (STR) to the relevant authorities, as required by the local regulations . References: ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 7: Money Laundering Risks and Methods, page 201. ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 8: Anti- Money Laundering Programs, page 227. ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 9: Conducting or Supporting the Investigation Process, page 255.

• Question 748:

  An anti-money laundering specialist is concerned that several suspicious transaction reports will discuss potential illegal activity of bank employees. In this situation, which of the following is the immediate concern for the institution?

  A. Prohibiting distribution of suspicious transaction report copies to the Board.
  B. The timing of the presentation of suspicious transaction reports to the competent authority.
  C. The type of form to be used when reporting to the Board.
  D. Ensuring no delay in informing the Board.
  D. Ensuring no delay in informing the Board.

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  According to the BSA/AML Manual1, a financial institution's board of directors and senior management are ultimately responsible for ensuring that the institution has a comprehensive and effective BSA/AML compliance program and oversight framework. This includes ensuring that the institution timely identifies, reports, and responds to suspicious activity involving its products, services, customers, or employees. Therefore, when an anti-money laundering specialist is concerned that several suspicious transaction reports will discuss potential illegal activity of bank employees, the immediate concern for the institution is to ensure no delay in informing the board of directors and senior management of the situation, as well as the actions taken or planned to address the risks and mitigate the potential harm. The board and senior management should be kept informed of the status and outcome of any internal or external investigations, as well as any regulatory or law enforcement inquiries or actions, related to the suspicious activity involving bank employees. References: BSA/AML Manual1 Suspicious Activity Reporting - Overview2 Suspicious Activity Report (SAR) Basics3 What's Suspicious? Here's How Banks Apply the Smell Test4

• Question 749:

  What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)

  A. At least one person, aside from the person sponsoring the relationship, should approve the correspondent relationship.
  B. Correspondent banking is an inherently high risk business and all correspondent bank relationships should be reviewed on an annual basis.
  C. Factors such as politically exposed person involvement and downstream (nested) correspondents increase the risk inherent in a correspondent relationship.
  D. An Institution may assign a low risk rating to a correspondent bank located in a jurisdiction deemed to have an adequate AML environment (e.g., Financial Action Task Force member country) without needing to consider other factors
  A. At least one person, aside from the person sponsoring the relationship, should approve the correspondent relationship.
  C. Factors such as politically exposed person involvement and downstream (nested) correspondents increase the risk inherent in a correspondent relationship.

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  According to the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking, one of the key aspects of establishing and maintaining a correspondent relationship is to conduct a risk-based due diligence on the respondent bank, which includes obtaining approval from at least one person other than the person sponsoring the relationship12. This is to ensure that the correspondent bank has a clear understanding of the nature, purpose, and expected activity of the relationship, as well as the respondent bank's ownership, governance, AML policies, and customer base12. Another aspect of the Wolfsberg AML Principles is to recognize and assess the factors that may increase the risk inherent in a correspondent relationship, such as the involvement of politically exposed persons (PEPs), the presence of downstream (nested) correspondents, the geographic location of the respondent bank and its customers, and the types of products and services offered by the respondent bank12. These factors may require enhanced due diligence, monitoring, and reporting of suspicious activities by the correspondent bank, as well as the application of appropriate risk mitigation measures12. References: 1: Wolfsberg Correspondent Banking Principles 20221 2: Wolfsberg Anti-Money Laundering Principles for Correspondent Banking2 Reference: https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/wolfsberg-standards/8.% 20Wolfsberg-Correspondent-Banking-Principles-2014.pdf

• Question 750:

  Which of the following customers require the most enhanced due diligence?

  A. A resident of a non-cooperative jurisdiction.
  B. An international business corporation.
  C. A politically exposed person.
  D. An established customer.
  C. A politically exposed person.

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  A politically exposed person (PEP) is a customer who requires the most enhanced due diligence (EDD). This is because PEPs are individuals who hold or have held prominent public positions, such as heads of state, senior politicians, judges, military officers, or directors of state-owned enterprises, and who may pose a higher risk of money laundering, corruption, or bribery due to their influence and access to public funds1. EDD measures for PEPs may include obtaining senior management approval, establishing the source of wealth and funds, and conducting enhanced ongoing monitoring of the business relationship2. The other customers listed do not necessarily require the most EDD, although they may still present a higher risk of money laundering depending on the circumstances. A resident of a non-cooperative jurisdiction is a customer who lives in a country or territory that has been identified by the Financial Action Task Force (FATF) or other international bodies as having weak or deficient anti-money laundering (AML) standards or posing a threat to the international financial system3. EDD measures for such customers may include obtaining additional information or documentation, applying extra scrutiny to transactions, or refusing to establish or continue the business relationship4. An international business corporation is a customer who operates in multiple jurisdictions and may have complex or opaque ownership structures that can conceal the identity or activity of the beneficial owners or controllers. EDD measures for such customers may include verifying the legal existence and structure of the entity, identifying the beneficial owners and controllers, and understanding the nature and purpose of the business relationship. An established customer is a customer who has a long-standing and regular business relationship with the financial institution and who may have a lower risk of money laundering due to the familiarity and trust that has been built over time. EDD measures for such customers may not be required unless there are changes in the customer's profile, behavior, or risk level. References: 1: Politically Exposed Persons (Recommendations 12 and 22) - FATF1 2: High-risk customers, including politically exposed persons | FCA2 3: High-Risk and Other Monitored Jurisdictions - FATF3 4: Your responsibilities under money laundering supervision | GOV.UK4 : International Business Corporations - ACAMS : Anti-Money Laundering Customer Due Diligence | Veriff.com : Customer Due Diligence - ACAMS : Anti-money laundering?a guide to customer due diligence