ACAMS ACAMS Certifications CAMS Questions & Answers

• Question 131:

  A large financial institution (Fl) is considering expanding business to an area of the world with weak AML laws. The risk-based assessment indicates that the location will increase the Fl's risk appetite beyond the stated acceptable amount. Which risk factors should be used to identify the priority of the Fl?

  A. Geographic risks

  B. Unknown third-party risks

  C. Cash-intensive businesses risks

  D. Anonymous transactions risks

  Correct Answer: A

  A. Geographic risks should be used to identify the priority of the Fl in this scenario. According to the CAMS Manual (6th Edition), "Geographic risk refers to the possibility that the location of a customer, transaction, or product may increase the likelihood of money laundering or terrorist financing because of weak or nonexistent AML/CFT controls" (p. 59). In this scenario, the expansion to an area of the world with weak AML laws would increase the Fl's geographic risk. Reference: Certified Anti-Money Laundering Specialist (the 6th edition), Section 3.2.3 Geographic Risks, p. 59.

• Question 132:

  The compliance department receives an internal referral that appears to indicate terrorist financing. What is the first step that should be taken in the investigation process?

  A. Notify the Board of Directors.

  B. Immediately file a suspicious activity report.

  C. Gather background and transaction information.

  D. Exit the relationship.

  Correct Answer: C

  According to the 6th edition Certified Anti-Money Laundering Specialist Study Guide, when the compliance department receives an internal referral that appears to indicate terrorist financing, the first step in the investigation process should be to gather background and transaction information. This includes obtaining customer identification and verifying customer data, obtaining additional information about the customer and the transaction, and reviewing the transaction activity. This information will help to determine if the referral is accurate and if further action is needed.

• Question 133:

  A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?

  A. The provision of remote check deposit services

  B. The provision of cash services

  C. The provision of payable through accounts

  D. The provision of brokerage services

  Correct Answer: B

  Retail banks typically have a high inherent risk of money laundering due to their provision of cash services. This is because cash is a preferred medium of exchange for criminals and terrorists, and retail banks provide a convenient way for them to move large sums of money without detection. Retail banks are also vulnerable to money laundering through the use of false identities and other deceptive practices. (CAMS Manual, 6th Edition, Page 8).

• Question 134:

  A new business opened an account at a bank. After a month of activity, the account is referred to AML Investigations for potential human trafficking activity. Which red flags most likely triggered the referral? (Choose two.)

  A. Trade in large volumes conducted with countries that are part of the diamond pipeline

  B. Multiple purchases of virtual currency at or just below the reporting threshold

  C. Conducting the businesses transactions online without visiting a branch

  D. Several lodging and food payments made on the same day at unusual hours for a business

  E. Several cash deposits along the country's border that are quickly withdrawn by third parties

  Correct Answer: DE

• Question 135:

  A non-US bank is implementing a sanctions compliance program. Which extraterritorial reach of Office of Foreign Assets Control (OFAC) regulations would matter the most to the foreign bank?

  A. OFAC administers sanctions based on criminal investigations against targeted foreign individuals.

  B. OFAC sanctions programs prohibit transactions and require the blocking of assets of foreign individuals that appear in negative media sources.

  C. OFAC acts only under presidential wartime emergency powers, against countries and foreign individuals considered enemies of the US.

  D. OFAC has the power to impose significant penalties on foreign individuals who are found to be in violation of the blocking orders.

  Correct Answer: D

  This includes civil monetary penalties, criminal prosecution, and other enforcement actions. These penalties can be enforced against foreign individuals, regardless of whether the individual is located within the US or abroad. Additionally, OFAC has the authority to impose sanctions on foreign countries and foreign individuals, including individuals and entities located outside of the US.

• Question 136:

  When assessing and managing money laundering risks while operating in foreign jurisdictions different from that of the head office, an effective AML monitoring program should:

  A. provide all foreign jurisdiction reports to the head office for approval.

  B. be tailored to the higher of standards between the jurisdictions.

  C. be consistent with the head office audits.

  D. conform to the foreign jurisdiction policies to align with the head office policies.

  Correct Answer: B

• Question 137:

  Which is a characteristic of the Financial Action Task Force (FATF) 40 recommendations?

  A. They enable FATF's active engagement in law enforcement matters, investigations, or prosecutions.

  B. They are automatically transposed into local law across the EU member states and the US.

  C. They provide a list of mandatory requirements for an effective AML regulatory framework.

  D. They comprise global standards for countering money laundering, recognized by government bodies across the world.

  Correct Answer: D

  The characteristic of the Financial Action Task Force (FATF) 40 recommendations is that they comprise global standards for countering money laundering, recognized by government bodies across the world. The FATF 40 recommendations provide a comprehensive framework of measures that countries should implement to combat money laundering and terrorist financing. The recommendations are not mandatory, but are widely recognized and followed by countries across the globe. The recommendations cover a range of areas, including customer due diligence, record- keeping, suspicious activity reporting, and international cooperation.

• Question 138:

  An AML specialist at a financial institution is presented with a search warrant. Which actions should be taken to comply with the search? (Select Two.)

  A. Remember what items the agents have seized and taken from the premise.

  B. Record the names and affiliations of the agents who conduct the search.

  C. Proactively ask the agents as many questions as time allows.

  D. Leave the premises to allow the agents to conduct the search.

  E. Obtain a copy of the warrant or photocopy the original warrant.

  Correct Answer: BE

  When presented with a search warrant, the AML specialist should record the names and affiliations of the agents who conduct the search. This will help in identifying who conducted the search in case there are any issues that need to be addressed later. Additionally, the AML specialist should obtain a copy of the warrant or photocopy the original warrant. This is important to ensure that the warrant is valid and that the agents are authorized to conduct the search. It is not appropriate to ask the agents questions or remember what items they have seized, as this could interfere with the search and potentially lead to legal issues. Finally, leaving the premises to allow the agents to conduct the search is not necessary, as the AML specialist has the right to be present during the search.

• Question 139:

  Which is a key aspect of the first EU Directive on Money Laundering?

  A. IT expanded the definition of criminal activity to all serious crimes.

  B. It defined money laundering as a separate crime.

  C. It established drug trafficking as a predicate offense of money laundering.

  D. It extended the scope beyond drug-related crimes.

  Correct Answer: C

• Question 140:

  Potential indicators of money laundering associated with Trust and Company Service Providers include: (Select Two.)

  A. house of legal persons in jurisdictions with strict secrecy laws.

  B. structuring cash deposits into third party accounts.

  C. multi-jurisdictional wire transfers with no legal purpose.

  D. generation of rental income to legitimize illicit funds.

  E. frequent deposits to or withdrawals from bank accounts.

  Correct Answer: AC

  This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: "Potential indicators of money laundering associated with Trust and Company Service Providers include the use of legal persons in jurisdictions with strict secrecy laws, structuring cash deposits into third party accounts, multi-jurisdictional wire transfers with no legal purpose, and frequent deposits to or withdrawals from bank accounts."