ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 11:

  Due to an ever-diversifying business model and multi-jurisdictional footprint, a casino has decided to outsource the source of funds and wealth checks to a third-party provider. Why is it important for the casino to maintain control of the output from the provider?

  A. Clients of the casino prefer to know that the casino is keeping their information secure when being held by a third-party.

  B. As with all third-party relationships, proper control must be maintained to ensure profitability.

  C. The casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance.

  D. Other casinos are frequently looking to reduce costs and share ideas, so if this relationship is successful, the model can be used by other businesses.

  Correct Answer: C

  The reason why it is important for the casino to maintain control of the output from the provider is that the casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance ? This is because the casino is accountable for its own AML/CFT obligations and cannot delegate or outsource them to a third-party provider. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should ensure that it has adequate oversight and control over any third-party providers that it engages for AML/CFT purposes, such as conducting due diligence, verifying information, or monitoring transactions" (p. 25). The FI should also "review and evaluate the performance and quality of the third-party providers on a regular basis, and address any issues or gaps that may arise" (p. 25).

  The other options are not as relevant or accurate as option C. The clients of the casino prefer to know that the casino is keeping their information secure when being held by a third-party (A) is not a reason why the casino should maintain control of the output from the provider, but rather a customer expectation or preference. As with all third-party relationships, proper control must be maintained to ensure profitability (B) is not a reason why the casino should maintain control of the output from the provider, but rather a general business principle or objective. Other casinos are frequently looking to reduce costs and share ideas, so if this relationship is successful, the model can be used by other businesses (D) is not a reason why the casino should maintain control of the output from the provider, but rather a potential benefit or outcome.

• Question 12:

  When crafting internal procedures on writing and submitting SARs/STRs, one should:

  A. use internal keywords and standard industry terms to better provide context within which the suspicious activity was identified.

  B. consider the guidelines issued by the national financial intelligence unit {FIU) and local regulator and incorporate any country-specific requirements.

  C. include attachments with the SARs/STRs as all information needs to be at the disposal of the financial intelligence unit (FIU)

  D. adhere to home junsdiction guidelines across the whole group when local requirements of the country of operation and home jurisdiction conflict.

  Correct Answer: B

  When writing and submitting SARs/STRs, one should consider the guidelines issued by the national financial intelligence unit (FIU) and local regulator and incorporate any country-specific requirements. This ensures that the reports are

  compliant with the relevant laws and regulations and provide useful information to the authorities. The other options are either incorrect or not best practices. References: Advanced CAMS-FCI Study Guide, page 48-49.

• Question 13:

  Which actions should financial institutions perform to ensure proper data governance? (Select Three.)

  A. Establish an appropriate data management method for collecting and storing information.

  B. Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems.

  C. For customers who are determined to be at high risk, review their risk rating and apply risk mitigation measures as appropriate.

  D. Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records.

  E. Evaluate the nature of foreign remittance under a risk-based structure of AML/CFT and take necessary measures in accordance with the risk-based approach.

  F. Review significant discrepancies between the values of the product reported on the invoice and the fair market value.

  Correct Answer: ABD

  Financial institutions should perform the following actions to ensure proper data governance:

  Establish an appropriate data management method for collecting and storing information. This is important to ensure that the data is consistent, reliable, and accessible for various purposes, such as risk assessment, compliance reporting,

  and customer service. Data management methods may include defining data standards, policies, and procedures; implementing data quality controls and validation checks; and using appropriate data storage systems and formats.

  Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems. This is important to comply with the anti-money laundering and counter-

  terrorist financing (AML/CFT) requirements, such as customer due diligence, transaction monitoring, and suspicious activity reporting. Accurate and complete customer and transaction data also enables financial institutions to use IT systems

  more effectively for data analysis, risk management, and decision making.

  Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records. This is important to ensure that the data remains up-to-date, relevant, and

  reliable over time. Data validation may include verifying the source and quality of the data; identifying and correcting any errors or inconsistencies; and updating or deleting any obsolete or redundant data.

  References:

  Data Governance for Financial Institutions - Capgemini Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements - OSFI

• Question 14:

  A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?

  A. If the activity is materially different from related businesses

  B. If the account has multiple transfers to the same, related businesses

  C. If there is negative media associated with counterparties

  D. If the account is mostly dormant or has little activity

  Correct Answer: C

  According to the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, page 105, the correct answer is C. It can be difficult to determine if there is negative media associated with counterparties solely from the

  customer's account activity and KYC file.

  The study guide explains that negative media can include news articles, government sanctions lists, and other sources of public information that may indicate that a counterparty is involved in illicit activities. However, this information may not

  be readily available in a customer's account activity or KYC file, and may require additional research or investigation.

• Question 15:

  The intended benefits of section 314(b) of the USA PATRIOT Act include: (Select Three.)

  A. sharing the existence and content of SARs/STRs with other participating FIs.

  B. participating FIs sharing information about suspicious activity by customers that may have otherwise gone unnoticed.

  C. providing mandatory results to law enforcement agencies so that they can more easily obtain useful information.

  D. expediting the filing of SARs/STRs due to the information sharing facilitated by 314(b).

  E. detecting money laundering and TF approaches and schemes across multiple financial institutions (FIs).

  F. obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing (TF).

  Correct Answer: BEF

  Section 314(b) of the USA PATRIOT Act allows financial institutions to share information with each other, under a safe harbor that offers protection from liability, in order to better identify and report potential money laundering or terrorist financing activities. The intended benefits of this information sharing include:

  Participating financial institutions sharing information about suspicious activity by customers that may have otherwise gone unnoticed. For example, if a customer is conducting transactions with multiple financial institutions that individually do not appear suspicious, but collectively indicate a pattern of money laundering or terrorist financing, the financial institutions can share this information and report it to the authorities. Detecting money laundering and terrorist financing approaches and schemes across multiple financial institutions. For example, if a financial institution identifies a new typology or modus operandi of money laundering or terrorist financing, it can share this information with other financial institutions to help them prevent or detect similar activities by their customers. Obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing. For example, if a financial institution has incomplete or insufficient information on a customer or a transaction that raises suspicion, it can request more information from another financial institution that may have dealt with the same customer or transaction. References:

  Section 314(b) | FinCEN.gov Section 314(b) Fact Sheet - FinCEN.gov

• Question 16:

  An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000,000 USD to an overseas account associated with a state- run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases.

  The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple of weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities.

  Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients.

  Media reports claimed the firm laundered money by holding for a fee before returning it to investors.

  The investigator discovers that the bank has no records pertaining to ownership of the LLC. What would this mean for the bank and/or investigator?

  A. The bank may not be able to file a SAR/STR without the ownership data.

  B. The bank is out of compliance with beneficial ownership regulations.

  C. The bank is out of compliance with CIP regulations.

  D. The bank cannot respond to law enforcement requests without the ownership data.

  Correct Answer: C

  The bank is out of compliance with CIP regulations because it did not obtain the minimum identifying information from the customer prior to opening the account, as required by 31 CFR ?1020.220(a)(2)(i)(A). The bank should have obtained the name, date of birth, address, and identification number of the customer, as well as verified the identity of the customer to the extent reasonable and practicable. The lack of ownership data may also indicate a violation of beneficial ownership regulations, but that is not the primary issue in this case.

• Question 17:

  As part of an internal fraud investigation, an AML officer has decided to interview an employee. Which statement is most consistent with best practices?

  A. Information on the employee can be gathered from coworkers and supervisors before the employee is interviewed.

  B. Prior to the interview, the investigator should inform the employee about the allegations.

  C. The employee should be supplied with all information about any ongoing fraud investigations.

  D. The employee should be notified that failing to cooperate can lead to loss of employment.

  Correct Answer: A

  As part of an internal fraud investigation, an AML officer should gather information on the employee from coworkers and supervisors before the interview, as this can help to establish a baseline of the employee's behavior, role, and responsibilities, and identify any red flags or anomalies. The other options are not consistent with best practices because they can compromise the integrity of the investigation, violate the employee's rights, or discourage cooperation. References: Advanced CAMS-FCI Certification Handbook, page 28.

• Question 18:

  An investigator at a bank triggered a review in relation to potential misuse of legal persons and a complex network of corporate entities owned by customer A. For the investigator to provide a holistic view of the underlying risk, which action should be the initial focus of the investigation?

  A. Use data analytics to extract and analyze the linkages between the different entities.

  B. Conduct a network link analysis on all customers of the bank.

  C. Find out whether customer A has relationships with other financial institutions.

  D. Review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel.

  Correct Answer: D

  The initial focus of the investigation should be to review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel, as this would help identify the beneficial owners, the source of funds, and the purpose of the business relationship. This would also help determine if the entities are shell companies or have any red flags that indicate potential misuse of legal persons. Using data analytics to extract and analyze the linkages between the different entities would be a subsequent step, not the initial one. Conducting a network link analysis on all customers of the bank would be too broad and time-consuming. Finding out whether customer A has relationships with other financial institutions would be relevant, but not the initial focus. References: [Advanced CAMS-FCI Study Guide], page 44-45; [FATF Guidance on Transparency and Beneficial Ownership], page 12-13.

• Question 19:

  A U.S. financial institution (Fl) receives a grand jury subpoena for a corporate client's account. The Fl should:

  A. request the client's consent for the disclosure of account information.

  B. review the corporate account's activity and transactions.

  C. file a SAR/STR.

  D. provide the client with a copy of the subpoena.

  Correct Answer: B

  The Fl should review the corporate account's activity and transactions. This is because a grand jury subpoena is a legal request for information or testimony that may be used in a criminal investigation or prosecution. The Fl should review the account for any suspicious or unusual activity that may be related to the subpoena or indicate money laundering, terrorist financing, or other financial crimes. The Fl should also document its review and retain any relevant records. References: Leading Complex Investigations Certificate, Module 3, page 14.

• Question 20:

  Which might suggest misuse of crowdfunding resources by a terrorist?

  A. A small charge at a gas station followed by a large charge at an electronics store

  B. A large deposit followed by multiple charges at a sporting goods store

  C. Multiple small deposits followed by a wire transfer to a large well-known international charity

  D. Multiple small deposits followed by the purchase of airplane tickets >

  Correct Answer: D

  The purchase of airplane tickets after receiving multiple small deposits from a crowdfunding platform might suggest that the funds are being used to facilitate travel for terrorist purposes. The other options are not necessarily indicative of terrorist financing, as they could be explained by legitimate reasons or other types of financial crimes.