ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 31:

  A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank.

  MEMO To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit

  A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered.

  The information contained in the LC is as follows:

  1.

  Advising amount per unit 30.000.00 EU ?0 units of BMW

  2.

  Model IX3

  3.

  Year of registration: 2020

  Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade

  finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy.

  The relationship manager

  Feedback from the RM:

  The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide

  clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country.

  Findings from the investigation from various internal and external sources of information:

  1.

  There were no negative news or sanctions hits on the exporter company, directors, and shareholders.

  2.

  The registered address of the exporting business was a residential address.

  3.

  The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU, based on manufacturer's new price guide.

  4.

  The key controllers behind the exporting company, that is the directors and

  During the investigation, the investigator determines that a nephew of the general (Bank A's customer) is a customer at Bank B. Which step should the investigator take next?

  A. File a SAR/STR in relation to corruption involving the nephew and the general.

  B. Determine whether there is a business relationship between the nephew and the general.

  C. Seek senior management approval to continue the relationship with the nephew.

  D. Flag the nephew as a PEP by association.

  Correct Answer: D

  The step that the investigator should take next is to flag the nephew as a PEP by association (D). This is because the nephew is related to a general who is a senior military official and a customer of Bank A, which is a high-risk jurisdiction with strict capital controls. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should identify and flag any customers who are PEPs or have close associations with PEPs, such as family members or business partners" (p. 24). The FI should also conduct enhanced due diligence on these customers and monitor their transactions for any suspicious or unusual activity.

  The other options are not correct. The investigator should not file a SAR/STR in relation to corruption involving the nephew and the general (A), as this could be premature or unnecessary, as there is no evidence of corruption or criminal activity between them. The investigator should not determine whether there is a business relationship between the nephew and the general (B), as this is not relevant or material to the investigation, as the nephew and the general are customers of different banks and are not involved in the same transaction. The investigator should not seek senior management approval to continue the relationship with the nephew ? as this could be premature or disproportionate, as there is no indication that the nephew poses a high risk or requires termination.

  References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS

• Question 32:

  An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

  KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.

  1.

  X is the UBO. and owns 97% shares of this entity customer;

  2.

  Y is is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR. KYC PROFILE Customer Name: AAA International Company. Ltd Customer ID: 123456

  Account Opened: June 2017 Last KYC review date: 15 Nov 2020 Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans, and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern: TRANSACTION JOURNAL Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency: Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency: Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties. RFI Information and Supporting documents: According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below: 1J All incoming funds received in HKD and USD currencies were monies lent from non- customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all

  the lenders are engaged in trading business. 2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay a loan

  Which suspicious activity should the investigator identify during the review of the loan agreements?

  A. AAA International Company Ltd.'s account has transactions in HKD and USD.

  B. Y is the authorized signatory on the beneficial ownership form.

  C. Online information found that X is the chairman of a business group of companies.

  D. Y signed on behalf of the lenders.

  Correct Answer: D

  The correct answer is D because it is a suspicious activity that Y, who is the authorized signatory of the customer, also signed on behalf of the lenders. This indicates a possible conflict of interest, collusion, or fraud. The other options are not suspicious activities based on the information given. References: [Advanced CAMS-FCI Study Guide], page 17-18

• Question 33:

  A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

  A. US sanctions

  B. Increased organized crime and corruption

  C. Reputation risk for the port

  D. Loss of tax revenue

  Correct Answer: B

  A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer increased organized crime and corruption as a social/economic consequence. "Weaknesses in the AML/CFT regime can lead to a range

  of economic and social consequences, including...increased crime and corruption." (CAMS Manual, 6th Edition, page 32)

• Question 34:

  Which is a key characteristic of the Financial Action Task Force (FATF) Regional Style Bodies for combatting money laundering/terrorist financing?

  A. Instructing each member country to place FATF recommendations into law

  B. Implementing regional mutual evaluation procedures

  C. Emphasizing regional co-operation between member countries

  D. Enabling FATF standards to be specific to each region

  Correct Answer: B

  According to the CAMS study guide, the Financial Action Task Force (FATF) Regional Style Bodies are organizations created by the FATF to promote the implementation of anti-money laundering and countering the financing of terrorism (AML/CFT) measures in specific regions. One of the key characteristics of these bodies is the implementation of regional mutual evaluation procedures. Regional mutual evaluations involve member countries evaluating each other's AML/CFT regimes to identify strengths and weaknesses and to develop best practices for improvement. This process allows for greater cooperation between countries and can help to identify and address regional AML/CFT risks more effectively. It also promotes consistency in AML/CFT standards and practices within the region.

• Question 35:

  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 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 money for a fee before returning it to investors.

  What is the total suspicious transaction amount that the investigator should report?

  A. 600,000,000 USD

  B. 59,000,000 USD

  C. 541.000,000 USD

  D. 659,000,000 USD

  Correct Answer: D

  The total suspicious transaction amount that the investigator should report is 659,000,000 USD. This is the sum of the two transactions involving the LLC and the state- run oil company, which are 59,000,000 USD and 600,000,000 USD respectively. The other transactions that the LLC made to other accounts, a money brokerage firm, and real estate purchases are not relevant to the question, as they are not part of the series of transactions that triggered the alert. References: Advanced CAMS-FCI Certification | ACAMS

• Question 36:

  Which main vulnerability has led to an increase in the ransomware attacks perpetuated on small businesses?

  A. Ability to pay larger ransoms

  B. Weaker cybersecurity controls

  C. Tendency not to contact law enforcement

  D. Inability to recover the encrypted information

  Correct Answer: B

  Weaker cybersecurity controls are a main vulnerability that has led to an increase in ransomware attacks on small businesses, as they make them easier targets for cybercriminals who can exploit their systems and demand payment for restoring access to their data. The other options are not relevant to the vulnerability, as they relate to the consequences or responses of the victims.

• Question 37:

  A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank.

  MEMO

  To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B

  RE: Concerning letter of credit

  A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe.

  Bank A's customer is a general in the army where Bank A is headquartered.

  The information contained in the LC is as follows:

  1.

  Advising amount per unit 30.000.00 EU ?0 units of BMW

  2.

  Model IX3

  3.

  Year of registration: 2020

  Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy.

  The relationship manager

  Feedback from the RM:

  The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country.

  Findings from the investigation from various internal and external sources of information:

  1.

  There were no negative news or sanctions hits on the exporter company, directors, and shareholders.

  2.

  The registered address of the exporting business was a residential address.

  3.

  The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU, based on manufacturer's new price guide.

  4.

  The key controllers behind the exporting company, that is the directors and

  During the investigation, the investigator determines that a nephew of the general.....

  A. should be treated well to avoid reputational damage to the bank

  B. is a high-net-worth individual

  C. should be flagged as a senior PEP.

  D. is a trustworthy source.

  Correct Answer: C

  The investigator should determine that a nephew of the general (Bank A's customer) should be flagged as a senior PEP ? This is because the nephew is related to a senior military official who is a customer of Bank A, which is a high-risk jurisdiction with strict capital controls. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should identify and flag any customers who are PEPs or have close associations with PEPs, such as family members or business partners" (p. 24). The FI should also conduct enhanced due diligence on these customers and monitor their transactions for any suspicious or unusual activity.

  The other options are not correct. The investigator should not determine that a nephew of the general should be treated well to avoid reputational damage to the bank (A), as this could compromise the integrity and objectivity of the investigation, as well as expose the bank to legal or regulatory risks. The investigator should not determine that a nephew of the general is a high-net-worth individual (B), as this is not relevant or material to the investigation, as the nephew's wealth does not affect his potential PEP status or risk level. The investigator should not determine that a nephew of the general is a trustworthy source (D), as this could be biased or inaccurate, as the nephew's trustworthiness does not depend on his relation to the general or his involvement in the transaction.

  References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS

• Question 38:

  While each is potentially important, which allows an investigations analyst to better write a SAR/STR narrative that is useful to law enforcement? (Select Two.)

  A. Including an explanation of the internal process that brought the transaction to the attention of the analyst

  B. Including information about the general activity trends in the area where the suspicious transactions were conducted

  C. Including contact information for individuals at other institutions with whom correspondence has occurred

  D. Including a detailed description of the known or suspected criminal violation or suspicious activity

  E. Ensuring all information in the SAR/STR is complete and accurate based on what the institution knows

  Correct Answer: DE

  A SAR/STR narrative that is useful to law enforcement should include a detailed description of the known or suspected criminal violation or suspicious activity, as well as ensure that all information in the SAR/STR is complete and accurate based on what the institution knows. These elements help law enforcement to understand the nature and scope of the suspicious activity, and to follow up with further investigation if needed. The other options are not essential for a useful SAR/STR narrative, as they either provide irrelevant or redundant information, or could compromise the confidentiality of the report.

• Question 39:

  In which case should an investigator avoid escalating a suspicious event to the chief compliance officer and pursue other channels?

  A. The transaction chain is likely connected to a known member of a terrorist organization.

  B. A close family member of the chief compliance officer is the beneficiary of a cross- border transfer.

  C. A trade entity engages in complex trade deals involving numerous third-party intermediaries in incongruent lines of business.

  D. An individual involved in a large sum transaction is a foreign PEP.

  Correct Answer: B

  An investigator should avoid escalating a suspicious event to the chief compliance officer if there is a potential conflict of interest, such as when a close family member of the officer is involved in the transaction. In such a case, the investigator should pursue other channels, such as reporting to a higher authority or an independent committee. The other options do not present a conflict of interest and should be escalated to the chief compliance officer as part of the normal procedure. References: Advanced CAMS-FCI Certification Handbook, page 18.

• Question 40:

  During transaction monitoring. Bank A learns that one of its customers. Med Supplies 123, is attempting to make a payment via wire totaling 382.500 USD to PPE Business LLC located in Mexico to purchase a large order of personal

  protective equipment. specifically surgical masks and face shields. Upon further verification. Bank A decides to escalate and refers the case to investigators.

  Bank A notes that days prior to the above transaction, the same customer went to a Bank A location to wire 1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical

  masks and face shields from China. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the

  purchase of these items, this time using a different vendor in China. The investigator must determine the next steps in the investigation and what actions, if any.

  should be taken against relevant parties.

  The investigator is gathering more information to determine if a SAR/STR filing is needed. Which steps are the correct ways of collecting the additional information? (Select Two.)

  A. Reach out to the relationship manager asking if more up-to-date customer due diligence information can be collected on the customer.

  B. Use available documentation received from law enforcement (e.g.. grand jury subpoena) as red flags in SAR/STR filing.

  C. Reach out to the customer and ask for supporting documentation for the conducted wires to avoid SAR/STR filing.

  D. Conduct open-source research to determine if the customer and involved counterparties are in the same business field.

  E. Issue a USA PATRIOT ACT Section 314(b) request to participating financial institutions advising that information is needed to decide if the activity is suspicious.

  Correct Answer: AD

  The correct answer is A and C because these indicators suggest that the customer is using fraudulent documents and misrepresenting the goods to conceal the illicit nature of the transactions. Fentanyl traffickers often use front companies

  and falsified invoices to disguise their shipments as legitimate products, such as medical supplies or chemicals. Reviewing the invoices and transportation documents, as well as the FDA product certifications, can help to identify

  discrepancies or anomalies that indicate fraud or deception.

  References: Fentanyl and Fentanyl Analogues: Federal Trends and Trafficking Patterns, page 18; Fentanyl Trafficking Offenses, page 2.