ACAMS ACAMS Certifications CAMS Questions & Answers

• Question 91:

  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 92:

  Which type of formal agreement occurs between countries that wish to aid each other in the investigation and enforcement of criminal laws?

  A. Joint Comprehensive Peace Agreement

  B. Mutual Legal Assistance Treaty

  C. Foreign Information Exchange

  D. Inter-country Agreement to Combat Trafficking

  Correct Answer: B

  A Mutual Legal Assistance Treaty (MLAT) is an agreement between two or more countries that allows for the exchange of information and evidence in the investigation and enforcement of criminal laws. MLATs provide a framework for countries to assist each other with investigations, prosecutions, and other legal matters, including the exchange of information, evidence, documents, and testimony. MLATs are commonly used in investigations related to money laundering, terrorism, and other transnational crimes.

• Question 93:

  Private investment companies are potentially vulnerable to money laundering because:

  A. It can be difficult to identify the people who are the ultimate beneficial owners.

  B. they transact shares that are not traded on a stock exchange.

  C. they exist in offshore jurisdictions with tight secrecy laws to protect the privacy of their owner(s).

  D. they are shell companies formed to maintain a client's confidentiality.

  Correct Answer: A

  Private investment companies (PICs) are potentially vulnerable to money laundering due to the difficulty in identifying the ultimate beneficial owners. PICs are often used to hold and manage private wealth, making them attractive targets for money launderers. Since these entities are privately held and not publicly traded, it can be challenging to identify the individuals who ultimately control or benefit from them. This makes it easier for money launderers to use them to disguise the origins of illicit funds.

• Question 94:

  A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?

  A. The customer engages in large trading in securities that are liquid or highly priced from the trading account.

  B. The customer's repeated trading in securities that are low priced and low volume counters.

  C. The customer receives many incoming wire transfers from related parties to the trading account.

  D. The customer accumulates securities of a low volume counter in small increments on a weekly basis.

  Correct Answer: B

• Question 95:

  Which risks are involved in a correspondent banking client's ownership and management structure? (Select Two.)

  A. Regularity of board meetings

  B. Size of the management structure

  C. Status as a state, publicly, or privately held entity

  D. Length of time since the last Wolfsberg Group review

  E. Transparency of the ownership structure

  Correct Answer: CE

  When dealing with correspondent banking clients, banks must evaluate the ownership and management structure of the client in order to assess the risks associated with the relationship. The status of the entity as a state, publicly, or privately held entity, as well as the transparency of the ownership structure, are important factors to consider when assessing these risks. Banks should also take into account the size of the management structure, the regularity of board meetings, and the length of time since the last Wolfsberg Group review in order to determine the risk associated with the correspondent banking relationship.

• Question 96:

  Which statement is true regarding the Financial Action Task Force standards for suspicious activity reports (SARs) information sharing within a financial group?

  A. Financial institutions should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.

  B. Financial institutions must require approval from regulators to share SARs information and supporting documentation.

  C. Financial institutions must retain copies of SARs and supporting documentation for five years from the date of filing the SARs.

  D. Financial institutions cannot share customer information at all since it is confidential.

  Correct Answer: A

  According to the Financial Action Task Force (FATF) standards for suspicious activity reports (SARs) information sharing within a financial group, "Financial institutions should establish adequate procedures to ensure that confidentiality of information is maintained and that information is only used for purposes permitted under national law. Where the parent institution is located in a country that does not permit such sharing, financial institutions should take measures to address this limitation" (CAMS Manual, 6th Edition, page 476). Therefore, financial institutions must establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.

• Question 97:

  Which situation would require enhanced due diligence be performed on a customer?

  A. A customer closes their store location and opens a new store location across town.

  B. A prospective customer recently started and incorporated a new business.

  C. Company ownership is held in bearer share form.

  D. The low-risk rating for a customer has not changed since the relationship was established 5 years ago.

  Correct Answer: C

  Company ownership is held in bearer share form. Bearer share ownership can make it difficult to identify the actual owners of a company and is therefore considered a high risk for money laundering or terrorist financing. Enhanced due diligence measures may include obtaining additional identification and ownership information, conducting more frequent reviews of the account, and monitoring transactions more closely. Reference: Certified Anti-Money Laundering Specialist (the 6th edition) Study Guide, Chapter 6, "Customer Due Diligence (CDD) and Know Your Customer (KYC)", page 115.

• Question 98:

  Cybersecurity risk can result in identity theft by:

  A. executing false transactions.

  B. compromising individual's personal data.

  C. issuing false passwords.

  D. identifying bugs in personal data processors.

  Correct Answer: B

  Identity theft is a form of fraud or cheating of identity in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain. By compromising an individual's personal data, such as their Social Security Number, bank account numbers, or other personal information, a cybercriminal can use it to gain access to credit cards or other financial accounts, or to open new accounts in the victim's name.

• Question 99:

  A prospective client walks into an accounting firm wanting to incorporate a company. The accountant feels uncomfortable after the meeting. Which two of the accountant's observations warrant escalation to the compliance officer? (Select Two.)

  A. The prospective client is unable to provide information about the beneficial owners.

  B. The prospective client is able to provide source of funds and source of wealth documents.

  C. The prospective client presents confusing details about the proposed business and has very little knowledge about the proposed business activity.

  D. The principal activities of the proposed company are importing and exporting new furniture.

  E. The prospective client exhibits confidence when speaking to the accountant when providing personal details.

  Correct Answer: AC

  A lack of information about beneficial owners is a red flag for potential money laundering or terrorist financing. It is important to identify who the actual owners of the company are to understand their potential risk exposure. Confusing details

  about the proposed business activity and lack of knowledge about the proposed business are also red flags for potential money laundering or terrorist financing. This could indicate that the proposed business activity is not legitimate and is

  being used to conceal illegal activities.

  Therefore, these two observations should be escalated to the compliance officer for further investigation.

• Question 100:

  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.