ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 81:

  A SAR/STR on cash activity is filed for a company registered in the Marshall Islands operating a Mediterranean beach bar and hotel. The company has three nominee directors, one nominee shareholder, and another individual declared as both the beneficial owner and authorized signatory. Which information is key for law enforcement's physical surveillance of cash activity? (Select Two.)

  A. The identification details o' the nominee shareholder

  B. The company's operating address

  C. The identification details of the beneficial owner and authorized signatory

  D. The company's registered address

  E. The identification details the nominee directors

  Correct Answer: BC

  The identification details of the beneficial owner and authorized signatory are key for law enforcement's physical surveillance of cash activity, as they would help identify the person who controls and operates the company and who is responsible for its financial transactions. The company's operating address is also key, as it would help locate the premises where the cash activity takes place and observe any suspicious movements or behaviors. The identification details of the nominee shareholder and directors are not relevant, as they are not involved in the management or operation of the company. The company's registered address is also not relevant, as it is likely to be a shell or mailbox address that does not reflect the actual location of the business. References: Advanced CAMS-FCI Study Guide, page 44-45; [FATF Guidance on Transparency and Beneficial Ownership], page 12-13.

• Question 82:

  According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)

  A. The responsibility and authority in the structure

  B. The management structure of the trust

  C. The source of funds in the structure

  D. The general purpose behind the structure

  E. The general nature of business of the trust

  Correct Answer: AD

  Here is the exact information from the Financial Action Task Force (FATF) Guidance for a Risk-Based Approach for Trust and Company Service Providers:

  "Understanding the management and ownership structure of a trust is crucial in assessing the ML/TF risk it poses. This includes the identity of all settlors, trustees and beneficiaries, and their respective roles and responsibilities, as well as the

  nature and purpose of the trust."

  "TCSPs should obtain and maintain up-to-date information on the purpose and intended nature of the business relationship, the source of funds and wealth, and where relevant, the source of funds or wealth of the settlor and beneficiaries."

  Based on this information, the correct answers are A and D. Trust and Company Service Providers must understand the responsibility and authority in the structure, as well as the general purpose behind the structure in order to assess the

  overall risk of the trust and ensure that any transactions with the trust are legitimate.

• Question 83:

  The compliance learn is reviewing multiple data points to include in its data analytics program to detect shell or front company red flags. Which data points should the compliance team include? (Select Two.)

  A. Entities exhibiting transactions with declared counterparties

  B. Entities whose principal place of business is a non-residential address

  C. Entities with high paid-up capital relative to monthly value of transactions

  D. Entities with a large number and variety of beneficiaries not declared at the time of onboarding

  E. Entities transacting with or having relation to tax haven or high-risk countries

  Correct Answer: BE

  The data points that the compliance team should include in its data analytics program to detect shell or front company red flags are entities whose principal place of business is a non-residential address and entities transacting with or having relation to tax haven or high-risk countries. These data points may indicate that the entities are not conducting legitimate business activities, but rather are used to conceal the identity or location of the true beneficiaries or owners, or to facilitate money laundering, tax evasion, or other illicit activities. Some of the sources that support these data points as red flags are4567:

  Entities whose principal place of business is a non-residential address may indicate that they have no physical presence, operations, assets, or employees. They may use addresses such as post office boxes, mail forwarding services,

  registered agents, or virtual offices to avoid detection or scrutiny. Entities transacting with or having relation to tax haven or high-risk countries may indicate that they are involved in offshore financial activities that are designed to evade taxes,

  regulations, or sanctions. They may also be exposed to higher risks of money laundering, terrorist financing, corruption, or fraud.

  References:

  How to Identify a Shell Company and the Associated Red Flags Difference between Shell, Shelf and Front Company | Sigma Ratings Shell Companies and Money Laundering | ComplyAdvantage General Comments Incorporation of shell

  companies - Singapore Police Force

• Question 84:

  Which action is part of the enhanced due diligence process?

  A. Collecting beneficial ownership details regarding the client's account

  B. Using standard monitoring procedures to monitor transactions and account activity

  C. Verifying the source of wealth for entities and natural person clients

  D. Applying higher ownership percentage requirement for beneficial ownership collection

  Correct Answer: A

  One of the actions that is part of the enhanced due diligence process is collecting beneficial ownership details regarding the client's account. This is important to identify the natural persons who ultimately own or control the client, and to

  assess the potential risks associated with them. According to the Financial Action Task Force (FATF), beneficial ownership information should include1:

  The name, nationality, and country of residence of each beneficial owner. The date of birth or incorporation of each beneficial owner. The nature and extent of the beneficial interest held by each beneficial owner. The means by which the

  beneficial ownership or control is exercised.

  References:

  FATF Guidance on Transparency and Beneficial Ownership

• Question 85:

  A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.

  An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).

  The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.

  The investigator recommends that a SAR/STR be filed. What documentation should be referenced in the SAR/STR filing? (Select Three.)

  A. All documents related to the agreement between the airline and the MTB

  B. Cumulative dollar amount of the wire transfer activity

  C. Airline's ticket sales and passenger list

  D. Cumulative dollar amount for transactions listing for all the MTB account's wire activity regarding travel packages

  E. Licensing information regarding the travel agency providing tourist sales to Cuba

  F. Account documentation on all related accounts maintained by the MTB

  Correct Answer: B

  The most likely reason for conducting a reverse transaction is to conceal or launder illicit funds. A reverse transaction is a transaction that reverses a previous transaction, such as a refund, a chargeback, or a cancellation. Reverse transactions can be used by money launderers to obscure the source, ownership, or destination of funds, or to create false records or invoices. For example, a money launderer may initiate a wire transfer from a high-risk jurisdiction to a low-risk jurisdiction, and then reverse the transaction after receiving confirmation of the funds. This way, the money launderer can create a paper trail that shows legitimate funds coming from a low-risk jurisdiction, while hiding the true origin of the funds. References: Advanced CAMS-FCI Study Guide, page 40-41.

• Question 86:

  How does the Asian/Pacific Financial Action Task Force -Style Regional Body help its members implement recommendations from the FATF? (Select Two.)

  A. Promotes laws that allow judicial challenges to seizure orders by an administrative body

  B. Endorses regulations that define money laundering based on the model laws issued by the respective member states

  C. Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions

  D. Encourages cooperative AML efforts in the region

  E. Requires members to maintain lists of regional money laundering and terrorists financing issues relevant to their region

  Correct Answer: CD

  The Asian/Pacific Financial Action Task Force-Style Regional Body (APG) helps its members implement recommendations from the FATF by facilitating the adoption and implementation of internationally accepted AML measures by member jurisdictions (CAMS Manual, 6th Edition, Page 22). The APG also encourages cooperative AML efforts in the region, which can include information-sharing and mutual evaluations to assess member compliance with FATF recommendations (CAMS Manual, 6th Edition, Page 25). Therefore, options C and D are the correct answers.

• Question 87:

  Which are primary purposes of Financial Action Task Force {FATF)-Style Regional Bodies? (Select Two.)

  A. Acting as a prudential regulatory body for financial institutions

  B. Providing due diligence for foreign correspondent banks

  C. Providing expertise and input in FATF policy-making

  D. Imposing special measures for non-cooperative jurisdictions

  E. Promoting effective implementation of FATF recommendations

  Correct Answer: CE

  The primary purposes of Financial Action Task Force (FATF)-Style Regional Bodies are to promote effective implementation of FATF recommendations and to provide expertise and input in FATF policy-making. (CAMS Manual, 6th Edition, Page 180)

• Question 88:

  In a review of the account activity associated with Nadine Kien, an investigator observes a large number of small- to medium-size deposits from numerous individuals from several different global regions. The money is then transferred to a numbered company. Which is the next best course of action for the investigator?

  

  A. Complete the monthly review and note the activity for next month's review.

  B. File a SAR/STR on the account activity in relation to a potential funnel account.

  C. Recommend the account for exit due to frequent global transactions.

  D. No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations.

  Correct Answer: B

  The next best course of action for the investigator is to file a SAR/STR on the account activity in relation to a potential funnel account. This is because a funnel account is a type of money laundering scheme that involves depositing funds from multiple sources into a single account, and then transferring them to another account, often in a different jurisdiction. A funnel account can be used to conceal the origin, ownership, and destination of illicit funds, and to evade currency transaction reporting requirements. The investigator should report the suspicious activity to the relevant authorities and document the findings and actions taken. The other options are incorrect because:

  A. Completing the monthly review and noting the activity for next month's review is not sufficient, as it delays the reporting of a possible money laundering scheme and exposes the financial institution to regulatory and reputational risks. C. Recommending the account for exit due to frequent global transactions is not appropriate, as it does not address the underlying issue of potential money laundering and may alert the customer of the investigation.

  D. No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations is not acceptable, as it ignores the red flags of a funnel account and fails to comply with the anti-money laundering obligations of the financial institution. References: Advanced CAMS-FCI Certification | ACAMS, Section 2: Investigating Financial Crimes, page 9 Leading Complex Investigations Certificate | ACAMS, Module 2: Identifying Red Flags, page 5

• Question 89:

  An EU bank account received 1.8 million EUR from a Swiss bank. The EU bank determines the originator was indicted by U.S. law enforcement, arrested in Switzerland, and extradited for alleged insider trading. Which is the best reason the EU bank should file a SAR/STR?

  A. The originator was indicted by U.S. law enforcement.

  B. Insider trading is a predicate offense in the U.S. and Switzerland.

  C. The events raise concerns that the payment represents proceeds from insider trading.

  D. The Swiss bank filed a SAR/STR with the Money Laundering Reporting Office Switzerland.

  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 insider trading, which is a form of market abuse and a predicate offense for money laundering in many jurisdictions. The fact that the originator was indicted by U.S. law enforcement, arrested in Switzerland, and extradited for alleged insider trading indicates that there is a strong suspicion that the funds are derived from criminal activity. The other options are not sufficient reasons to file a SAR/STR, as they do not directly relate to the nature or source of the funds. References: [Financial Action Task Force Report on Money Laundering and Terrorist Financing Risks and Vulnerabilities Associated with Gold], page 17 : [Leading Complex Investigations Certificate], page 12

• Question 90:

  During transaction monitoring. Bank A learns that one of their 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 next steps in the investigation and what actions, if any.

  should be taken against relevant parties.

  During the investigation, Bank A receives a USA PATRIOT Act Section 314(a) request related to Med Supplies 123. Which steps should the investigator take when fulfilling the request? (Select Three.)

  A. Exit the relationship with the business since it appears that customer is under investigation.

  B. Do not respond to Financial Crimes Enforcement Network (FinCEN) if the requested information is not present in the financial institution's system of records.

  C. Review the account(s) activity and proactively file a SAR/STR using the 314(a) request as the basis for the filing.

  D. Report to Financial Crimes Enforcement Network (FinCEN) that a match was found without revealing any other details.

  E. Report back to the Financial Crimes Enforcement Network (FinCEN) within 15 days of receipt of the request via a secure internet website.

  F. Search its records expeditiously to determine whether it maintains(ed) any accounts for the subject(s) listed in the request.

  Correct Answer: DEF

  According to the FinCEN's 314(a) Fact Sheet1, the steps that the investigator should take when fulfilling the request are:

  Search its records expeditiously to determine whether it maintains(ed) any accounts for the subject(s) listed in the request. This is option F. Report back to the Financial Crimes Enforcement Network (FinCEN) within 15 days of receipt of the

  request via a secure internet website. This is option E. Report to Financial Crimes Enforcement Network (FinCEN) that a match was found without revealing any other details. This is option D.

  The other options are incorrect because:

  Exiting the relationship with the business since it appears that customer is under investigation is not required by the 314(a) program and may interfere with law enforcement's investigation. This is option A.

  Not responding to Financial Crimes Enforcement Network (FinCEN) if the requested information is not present in the financial institution's system of records is contrary to the 314(a) program, which requires financial institutions to respond

  whether or not they have a match. This is option B. Reviewing the account(s) activity and proactively filing a SAR/STR using the 314(a) request as the basis for the filing is not appropriate, as the 314(a) request itself is not a sufficient reason

  to file a SAR/STR. The financial institution should only file a SAR/STR if it has its own independent suspicion of money laundering or terrorist financing. This is option C.

  References: 1: FinCEN's 314(a) Fact Sheet