An investigator is reviewing a case generated from the transaction monitoring system, with two large amounts of incoming remittance (IR) to an individual customer. Based on the KYC profile, the customer is a plant manager of a famous multi-national electronics manufacturing firm. As the customer has no similarly large transaction patterns for the past 2 years, the investigator sends an inquiry to the relationship manager (RM) about the nature of the transaction. The RM replies that the transaction is a consultancy fee provided from two different electronics companies with a debit note provided However, there is no detail of service provided on the debit note, and the remitters are two individuals.
Which actions should the investigator recommend to mitigate risk? (Select Two.)
A. Exit the relationship with the customer.
B. Document and maintain a file with the investigative findings.
C. Discuss the investigation findings with the customer.
D. Conduct enhanced due diligence.
E. Re-evaluate the customer risk profile.
Correct Answer: DE
The actions that the investigator should recommend to mitigate risk are conducting enhanced due diligence (D) and re-evaluating the customer risk profile (E). These actions are appropriate and prudent, as they allow the investigator to obtain more information and evidence about the nature and purpose of the transactions, the source and destination of the funds, and the identity and legitimacy of the parties involved. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should conduct enhanced due diligence on all parties involved in the investigation, including checking various sources of information, such as watch lists, sanctions lists, negative news, and official registries" (p. 24). The FI should also "re-assess the customer risk profile based on any new information obtained during the investigation, and adjust the customer due diligence and monitoring requirements accordingly" (p. 25).
The other options are not as appropriate or effective as options D and E. The investigator should not recommend exiting the relationship with the customer (A), as this could be premature or disproportionate, as well as potentially discriminatory or illegal. The investigator should not recommend documenting and maintaining a file with the investigative findings (B), as this is not an action to mitigate risk, but rather a standard procedure for any investigation. The investigator should not recommend discussing the investigation findings with the customer ? as this could compromise the integrity and objectivity of the investigation, as well as expose the FI to legal or regulatory risks. References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide
Question 72:
Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?
A. Reviewing wire transfer screening processes to ensure that potential name hits are investigated promptly
B. Looking at copies of suspicious activity reports filed with regulators to ensure completeness
C. Ensuring that all clients with foreign identification are subject to enhanced due diligence
D. Examining Human Resources processes for conducting criminal background checks on executives
Correct Answer: C
The OFAC sanctions screening audit program should include the requirement that all clients with foreign identification are subject to enhanced due diligence, as this provides an extra layer of protection against potential violations of OFAC sanctions. Reference: CAMS VI manual, page 132, section 7.2.2.1.1 - "Testing for OFAC Sanctions Screening Audit." This section specifically states that the OFAC sanctions screening audit program should include ensuring that all clients with foreign identification are subject to enhanced due diligence.
Question 73:
When writing or reviewing a SAR/STR, it is important to:
A. ensure the narrative is kept to the point; easy to read; and addresses the who, what, when, where, why, and how.
B. ensure that the narrative is detailed with all available information so that law enforcement can decide what is relevant.
C. keep the introduction brief but ensure all relevant transactions, account numbers, and suspect names are listed in the conclusion summary.
D. avoid mentioning suspect names in case it is seen by someone involved in criminal activity, effectively tipping them off.
Correct Answer: A
The correct answer is A because a SAR/STR narrative should be concise, clear, and complete, addressing the who, what, when, where, why, and how of the suspicious activity. Option B is incorrect because providing too much information
can make the narrative confusing and irrelevant. Option C is incorrect because the introduction should provide a summary of the suspicious activity, not the conclusion. Option D is incorrect because suspect names should be mentioned in the
narrative to identify the parties involved in the suspicious activity.
Online payments from a customer's account to three foreign entities trigger an investigation. The investigator knows the funds originated from family real estate after an investment company approached the customer online. Funds were remitted for pre-lPO shares. Which should now occur in the investigation?
A. Seek evidence for the customer's source of wealth.
B. Have the relationship manager contact the customer to understand the nature of the transaction.
C. Review the structure of the transactions to the three entities.
D. Inspect electronic banking login records.
Correct Answer: C
The correct answer is C because reviewing the structure of the transactions to the three entities can help the investigator to identify any red flags or indicators of fraud, such as unusual amounts, frequency, destinations, or beneficiaries. The
other options are not as relevant or effective in this scenario. Option A is not necessary because the investigator already knows the source of funds for the customer. Option B is not advisable because contacting the customer directly may
alert them to the investigation and compromise its integrity. Option D is not helpful because inspecting electronic banking login records does not provide any information about the nature or purpose of the transactions.
During a review of the accounts related to Richard Aston, an investigator notices a high number of incoming payments from various individuals.
They also notice that these incoming payments typically occur during large sporting events or conferences. As a result of the account review, of which illegal activity does the investigator have reasonable grounds to suspect Richard Aston?
A. Embezzling from the hotel
B. Aftermarket sales of entertainment admission tickets
C. Human trafficking
D. Sports betting
Correct Answer: B
The illegal activity that the investigator has reasonable grounds to suspect Richard Aston of is aftermarket sales of entertainment admission tickets. This is because aftermarket sales of entertainment admission tickets involve reselling tickets for events, concerts, festivals, etc. at a higher price than their face value, often through online platforms or scalpers. This practice can be illegal or unethical, depending on the jurisdiction and the terms and conditions of the original ticket seller. The investigator should look for indicators of aftermarket sales of entertainment admission tickets, such as high volume or frequency of incoming payments from various individuals, correlation between incoming payments and major events or conferences, and discrepancy between the customer's profile and the nature of the transactions. The other options are incorrect because:
A. Embezzling from the hotel is not likely, as it would involve stealing money or property from the hotel by an employee or a person in a position of trust. There is no evidence that Richard Aston works for or has access to the hotel's assets. C. Human trafficking is not probable, as it would involve exploiting people for forced labor or commercial sexual exploitation. There is no indication that Richard Aston is involved in any form of human trafficking or has any connection to victims or perpetrators. D. Sports betting is not plausible, as it would involve wagering money on the outcome of sporting events or games. There is no sign that Richard Aston is engaged in any sports betting activity or has any association with bookmakers or gamblers. References: Advanced CAMS-FCI Certification | ACAMS, Section 2: Investigating Financial Crimes, page 10 TicketSwap: The safest way to buy and sell tickets Ticketing 101 | Ticketmaster 10 Types of Tickets For Events (+ Why and When To Use Them) - Eventbrite
Question 76:
What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?
A. Sanction a country when an individual Fl does not comply with US law.
B. Subpoena documents from FIs that have no presence in the US.
C. Revoke the banking licenses of non-US FIs in countries outside the US.
D. Allow all US regulators to place a non-US Fl on the Specially Designated Nationals and Blocked Persons List.
Correct Answer: B
According to the CAMS manual 6th edition, the USA PATRIOT Act allows the US government to subpoena documents from foreign financial institutions (FIs) that have no presence in the US (option B). The manual states that "The USA PATRIOT Act provides US law enforcement agencies with the power to subpoena documents from foreign banks that maintain correspondent accounts with US banks or have no presence in the United States" (p. 77).
Question 77:
Which reputations risk consequence could a financial entity face for violating AML laws?
A. Loss of high-profile customers
B. Seizure of assets
C. Increased audit costs to monitor behavior
D. Monetary penalties
Correct Answer: D
According to the Certified Anti-Money Laundering Specialist (CAMS) Manual [1], 6th edition, financial entities that violate Anti-Money Laundering (AML) laws can face several reputational risks such as loss of high-profile customers, seizure of assets, increased audit costs to monitor behavior, and monetary penalties. For example, the US Treasury's Financial Crimes Enforcement Network (FinCEN) imposes civil money penalties on "persons who willfully violate, attempt to violate, conspire to violate, or cause any violation of any provision of the Bank Secrecy Act or its implementing regulations." (CAMS Manual, 6th edition, page 26).
Question 78:
During onboarding al Private Bank A, client C indicated that the account would be initially funded with a transfer from Bank B totaling 50 million USD. On which source of funds should Bank A conduct additional scrutiny? (Select Two.)
A. Client's verified employment income
B. Third-party transfer
C. Client's overall wealth
D. Transfer from Bank B
E. Documented sale of client properties
Correct Answer: BD
The sources of funds that Bank A should conduct additional scrutiny on are the third-party transfer and the transfer from Bank B. This is because these sources may pose higher risks of money laundering, terrorist financing, fraud, or other
illicit activities. Some of the reasons why these sources require more scrutiny are23:
Third-party transfers may involve unknown or unrelated parties that may have ulterior motives or hidden agendas. They may also be used to obscure the origin or destination of funds, or to circumvent sanctions or other regulatory restrictions.
Transfers from Bank B may involve jurisdictions that have weak anti-money laundering and counter-terrorist financing (AML/CFT) regimes, high levels of corruption, or significant criminal activity. They may also involve banks that have poor
reputation, compliance, or transparency standards.
References:
Third Party Payments - Wolfsberg Group
Guidance on Correspondent Banking Services - FATF
Question 79:
Potentially suspicious activity following an increase in the volume of transactions by an import company included outgoing wires to Indonesia and Uganda referencing invoice numbers. Incoming funds included large cash deposits and checks/ wires from pet stores, breeders, and private individuals. What financial crime might the bank reference in the SAR/STR?
A. Tax evasion scheme
B. International drug trafficking
C. Illegal wildlife trade
D. Black market peso exchange
Correct Answer: C
The best reason the EU bank should file a SAR/STR is that the events raise concerns that the payment represents proceeds from illegal wildlife trade, which is a serious financial crime and a predicate offense for money laundering in many jurisdictions3. The fact that the incoming funds came from pet stores, breeders, and private individuals suggests that the import company may be involved in smuggling or trafficking endangered or protected animals or their parts4. The outgoing wires to Indonesia and Uganda, which are known source countries for wildlife trafficking, may indicate payments to suppliers or facilitators of this illicit activity. References: 3: Financial Action Task Force Report on Money Laundering from the Illegal Wildlife Trade, page 9 4: Financial Crime Typologies - Intermediate, page 18 : [World Wildlife Crime Report], page 16
Question 80:
Law enforcement (LE) suspects human trafficking to occur during a major sporting 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 after 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 dates1' and "companionship."
The Fl wants to create an automated alert for human trafficking money laundering after this investigation. Which activity type should they target?
A. Payments made to multiple hotels in the same city
B. Multiple deposits between midnight and 4:00 AM
C. Deposits made within days of major sporting events
D. Payments made for virtual currency
Correct Answer: B
The activity type that the FI should target for creating an automated alert for human trafficking money laundering is multiple deposits between midnight and 4:00 AM (B). This is because this pattern is consistent with the indicators of human trafficking identified by the Financial Action Task Force (FATF) and the Egmont Group1, which include: Frequent cash deposits, often in round amounts, outside of normal business hours Deposits made at different branches or ATMs in various locations Lack of information about the nature and purpose of the business Involvement in online platforms that advertise sexual services Expenses related to travel and accommodation The other options are not as relevant or specific as option B. Payments made to multiple hotels in the same city (A) could be a legitimate business expense or a sign of other types of money laundering, such as tax evasion or fraud. Deposits made within days of major sporting events ?could also be explained by other factors, such as increased tourism or gambling. Payments made for virtual currency (D) are not directly related to human trafficking, although they could be used to facilitate money laundering in general.
References: FATF and Egmont Group, Financial Flows from Human Trafficking, July 2018, available at FATF
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