ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 51:

  A national financial intelligence unit (FIU) is undertaking the country risk assessment for the financing of the proliferation of weapons of mass destruction (WMD). The evaluation involves determining the exposure that financial institutions (FIs) have to operations that evade sanctions. Which should be performed by the FIU to assess proliferation financing risk? (Select Two.)

  A. Compare the international finance operations with national PEP lists to determine if the systems used by FIs are properly calibrated to detect WMD proliferation financing.

  B. Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions.

  C. Prepare new regulations that increase fines for FIs that allow financial operations on behalf of WMD proliferation sanctioned states.

  D. Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection.

  E. Analyze the domestic financial operations that are above the reporting threshold and have similar names to high-level officials of WMD proliferation sanctioned states.

  Correct Answer: BD

  The FIU should cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions, as this would help identify any discrepancies or anomalies that could indicate sanctions evasion. The FIU should also evaluate a sample of the amount of false-positive and false- negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection, such as inadequate screening systems, lack of training, or human error. These actions would help the FIU assess the proliferation financing risk and provide feedback and guidance to FIs on how to improve their detection and prevention capabilities. References: Advanced CAMS-FCI Study Guide, page 32-33; [FATF Guidance on Counter Proliferation Financing], page 15-16.

• Question 52:

  The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.

  As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.

  The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.

  Which steps for documenting the final investigation decision are appropriate for the investigator in this scenario?

  A. Exclude any open-source information from record-keeping since it is publicly available.

  B. Add all of the information the Fl has about the subject, their account(s) activity, research results. KYC information, etc. to the SAR/STR.

  C. Document the investigation process and retain all relevant documents in the case management system.

  D. Do not document the investigation process if a SAR/STR is not filed.

  Correct Answer: C

  The investigator should document the investigation process and retain all relevant documents in the case management system. This is because documenting the investigation process is a good practice to ensure the quality and consistency of the investigation, as well as to facilitate the review and audit of the investigation. Retaining all relevant documents is also important to support the evidence and findings of the investigation, as well as to comply with the record-keeping requirements of the relevant authorities. The other options are incorrect because:

  A. Excluding any open-source information from record-keeping is not advisable, as open-source information can provide valuable insights and context for the investigation, and may not be easily retrievable in the future. B. Adding all of the information the FI has about the subject, their account(s) activity, research results, KYC information, etc. to the SAR/STR is not necessary, as the SAR/STR should only contain the essential information that is relevant and material to the suspicious activity. Adding too much information may obscure the main points and make the SAR/STR less effective.

  D. Not documenting the investigation process if a SAR/STR is not filed is not acceptable, as the investigation process should be documented regardless of the outcome. Documenting the investigation process can help justify why a SAR/STR was not filed, and also provide a reference for future investigations involving the same subject or activity. References: Advanced CAMS-FCI Certification | ACAMS, Section 3: Reporting Suspicious Activity, page 14 Leading Complex Investigations Certificate | ACAMS, Module 4: Documenting Your Investigation, page 4

• Question 53:

  An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business. An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

  Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing 'daycare' or 穋are'. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

  Which red flags would be an indicator that activity is connected to a corruption/bribery typology? (Select Two.)

  A. Large checks issued to various individuals with the memos noting "gift", "thank you", "favor"

  B. Negative news found on the customer related to government-issued violations for safety

  C. Checks issued to an unrelated entity referencing "rent" and "utilities" in the memos

  D. Multiple daycare locations with no active business operations or related account activity

  E. The same beneficial owner owning several daycare centers in different locations

  Correct Answer: AB

  The red flags that would be an indicator that activity is connected to a corruption/bribery typology are large checks issued to various individuals with the memos noting "gift", "thank you", "favor" (A) and negative news found on the customer related to government-issued violations for safety (B). These red flags suggest that the customer is involved in paying or receiving bribes or kickbacks to or from government officials or other parties in exchange for favorable treatment or contracts. These red flags are consistent with some of the indicators of corruption/bribery identified by ACAMS1, such as:

  Payments made to or from third parties that are not directly related to the business Payments made to or from high-risk jurisdictions or sectors Payments made with vague or incomplete descriptions or justifications Negative news or reputation of the customer or its associates The other options are not as relevant or indicative of corruption/bribery as options A and B. Checks issued to an unrelated entity referencing "rent" and "utilities" in the memos ?could be a legitimate business expense or a sign of other types of fraud or money laundering, such as tax evasion or shell company schemes. Multiple daycare locations with no active business operations or related account activity (D) could also be a sign of other types of fraud or money laundering, such as embezzlement or front company schemes. The same beneficial owner owning several daycare centers in different locations (E) could be a normal or legitimate business practice, depending on the size, location, and profitability of the centers.

• Question 54:

  The training department is conducting awareness training for unusual customer identification scenarios. Which two indicators should be included? (Select Two.)

  A. The customer opens the account in the name of a family member who begins making large deposits.

  B. The customer's name and home address cannot be verified

  C. The customer's internet protocol address does not match the identifying information provided during online registration.

  D. The customer requests payment of proceeds to an unrelated third party.

  E. The customer frequently exchanges small bills for large bills.

  Correct Answer: AB

  This information can be found in the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, under the section on Unusual Customer Identification Scenarios. The guide explains that two indicators that should be included in awareness training for unusual customer identification scenarios are:

  A. The customer opens the account in the name of a family member who begins making large deposits.

  This is an indicator of potential structuring, where a customer may be attempting to avoid triggering reporting thresholds by depositing funds in smaller amounts over time. It is important for staff to be aware of this scenario and to monitor

  accounts for potential suspicious activity.

  B. The customer's name and home address cannot be verified. This is an indicator of potential identity theft or other fraudulent activity. If a customer's identifying information cannot be verified, it is important for staff to conduct additional due

  diligence to ensure that the customer is legitimate and that the account is not being used for illicit purposes.

• Question 55:

  A bank's transaction surveillance system triggers an alert for a deposit of 250.000 USO into a client's account. According to the bank's KYC information, the client works for a financial advisory firm, and earns approximately 100,000 USD per year. Which actions should be taken? (Select Three.)

  File the suspicious transaction immediately to the financial intelligence unit.

  A. Discard the alert as a false positive hit

  B. Request information and documentation from the client on the background of the transaction.

  C. Contact the client advisor to learn if he has any insight on the transaction background.

  D. Review the alert if the deposit is made in cash.

  E. Review the transaction background in the bank's transaction platform.

  Correct Answer: BCE

  According to the Certified Anti-Money Laundering Specialist (CAMS) Manual , 6th edition, if a bank's transaction surveillance system triggers an alert for a deposit of 250.000 USD into a client's account, the bank should take the following

  actions:

  Request information and documentation from the client on the background of the transaction (CAMS Manual, 6th edition, page 46).

  Contact the client advisor to learn if he has any insight on the transaction background (CAMS Manual, 6th edition, page 47).

  Review the transaction background in the bank's transaction platform (CAMS Manual, 6th edition, page 47).

  Discarding the alert as a false positive hit and reviewing the alert if the deposit is made in cash should not be done.

  The bank should request additional information and documentation from the client to better understand the nature of the transaction. Additionally, the bank should reach out to the client advisor to learn if they have any insight on the

  transaction background. Finally, the bank should review the transaction background in the bank's transaction platform to determine if any additional alerts or anomalies are present. (CAMS Manual, 6th Edition, Pages 117-118)

• Question 56:

  In the past 6 months, a small financial institution (Fl) has received regular remittances that are increasing in value from a country with high piracy activity. The Fl's AML officer (AMLO) has also noted that piracy in this country has increased in the same time frame. Which recommendation should the AMLO make?

  A. Request the operations department to return inbound remittances when the sender of funds is from this country.

  B. Upgrade the transaction monitoring system of the Fl to include more fields so that more in-depth information is collected about the inward remittances.

  C. File a SAR/STR to the appropriate AML authority immediately.

  D. Conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions.

  Correct Answer: D

  Verified Answer: D The recommendation that the AMLO should make is to conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions. This is because the regular and

  increasing remittances from a country with high piracy activity may indicate a possible link to illicit funds derived from piracy or other criminal activities. According to the World Bank, remittances are often used as a channel for money

  laundering and terrorist financing, especially when they originate from or are destined to high-risk jurisdictions1. Therefore, the AMLO should analyze the remittance data to identify the sources, destinations, amounts, frequencies, and

  purposes of the transactions, and compare them with the customer profiles, expected activities, and risk ratings. The AMLO should also review any relevant information from external sources, such as media reports, sanctions lists, or law

  enforcement alerts, to determine if there are any red flags or indicators of suspicious activity. If the investigation reveals any evidence or suspicion of money laundering or terrorist financing, the AMLO should file a SAR/STR to the appropriate

  AML authority.

  References:

  Remittances data - Migration data portal

• Question 57:

  Law enforcement (LE) suspects human trafficking to occur during a major spotting event. LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.

  An investigator identified a pattern linked to a business. The business* account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3.000 USD. made by a person to the business' account occurred in many branches in the days alter the sports event. There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person

  making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates" and "companionship." Which fact should not be included in (he SAR/STR narrative?

  A. The air travel and hotel expenses

  B. The time of the cash deposits

  C. The sporting event

  D. The request by law enforcement

  Correct Answer: B

  The fact that should not be included in the SAR/STR narrative is the request by law enforcement (D). This is because the request by law enforcement is confidential and should not be disclosed to the customer or anyone else who is not authorized to know it. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should not include any reference to the LE request in the SAR/STR narrative, as this could compromise the LE investigation or alert the customer of the suspicion" (p. 35). The FI should also not inform the customer of the LE request or delay filing the SAR/STR because of it.

  The other facts should be included in the SAR/STR narrative, as they are relevant and indicative of human trafficking money laundering. The air travel and hotel expenses (A) show that the customer is involved in moving people across different locations, which could be a sign of human smuggling or trafficking. The time of the cash deposits (B) shows that the customer is receiving cash payments during unusual hours, which could be a sign of illicit activities or services. The sporting event ?shows that the customer is exploiting a high-demand situation for their business, which could be a sign of opportunistic or organized crime.

• Question 58:

  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 in 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 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 the loan

  Which additional information would support escalating this account for closure?

  A. The bank files SARs/STRs indicating that Y opened accounts for small companies located in close proximity to the bank.

  B. A follow-up request reveals that the account receives funds from loans, collects payments from group-related companies, and sends the payments to the lenders.

  C. A review of outward remittances reveals the same pattern of several simple steps for each transaction,

  D. A review of X's personal bank account shows that X received wire transfers that aggregate the amounts transferred to the group-related companies.

  Correct Answer: C

  A review of outward remittances reveals the same pattern of several simple steps for each transaction, which could indicate a layering scheme to obscure the origin and destination of the funds. This would support escalating this account for closure, as it is inconsistent with the customer's declared purpose and anticipated activities. The other options are not relevant or sufficient to warrant account closure. References: Advanced CAMS-FCI Certification | ACAMS

• Question 59:

  How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

  A. Mutual evaluation

  B. FATF Evaluation Committee

  C. Basel Committee

  D. Series of internal audits followed by reporting to FATF

  Correct Answer: A

  "The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a mutual evaluation process. During a mutual evaluation, the FATF assesses a country's legal and institutional framework, its implementation of measures to combat money laundering and terrorist financing, and the effectiveness of its efforts. The FATF then issues a report with recommendations for improvement" [CAMS Study Guide 6th edition, page 15-16].

• Question 60:

  A criminal is engaged in chain hopping while trying to launder ransomware payments. The criminal will likely:

  A. obscure the funds using a mixer.

  B. convert the funds to a different type of cryptocurrency.

  C. store the funds in a cold wallet.

  D. move the funds to an offshore cryptocurrency wallet.

  Correct Answer: B

  Chain hopping is a technique used by criminals to obscure the traceability of cryptocurrency transactions by converting the funds to a different type of cryptocurrency, often using multiple exchanges or platforms. The other options are not related to chain hopping. References: Advanced CAMS-FCI Study Guide, page 38.