ACAMS ACAMS Certifications CAMS Questions & Answers

• Question 141:

  The Wolfsberg Group has issued a number of documents since its inception aiming to:

  A. provide a standardized process amongst its bank members for combatting money laundering and terrorist financing in private banking.

  B. prevent money laundering or terrorist financing by establishing consistent regulatory standards across the EU.

  C. provide advice to regulators around the world on the due diligence requirements for politically exposed persons.

  D. provide financial institutions with an industry perspective on effective financial crime risk management.

  Correct Answer: D

  The Wolfsberg Group is an association of thirteen global banks that aims to develop guidance and standards for the management of financial crime risks. The Group has issued a number of documents since its inception to provide financial institutions with an industry perspective on effective financial crime risk management.

• Question 142:

  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 143:

  An oil exploration company based in France does business with oil refineries in Iran, which is subject to comprehensive Office of Foreign Assets Control (OFAC) sanctions. What type of OFAC sanctions should be imposed against the French company?

  A. Sectoral

  B. Country-based

  C. Secondary

  D. List-based

  Correct Answer: C

  An oil exploration company based in France does business with oil refineries in Iran, which is subject to comprehensive Office of Foreign Assets Control (OFAC) sanctions.

• Question 144:

  Which payment method for purchasing luxury items is a red flag for potential money laundering?

  A. Personal loan

  B. Cash

  C. Wire transfer

  D. Credit card

  Correct Answer: B

  According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1]. Reference: [1] Financial Action Task Force. (2013). Money Laundering and Terrorist Financing Through the Real Estate Sector. https://www.fatf- gafi.org/media/fatf/documents/reports/ML-TF-through-real-estate.pdf

• Question 145:

  According to the Financial Crimes Enforcement Network, after an initial suspicious activity report has been filed for a customer, a financial institution must perform a continuing review of the account for a period of how many days?

  A. 30 days

  B. 60 days

  C. 90 days

  D. 120 days

  Correct Answer: C

  a financial institution must perform a continuing review of the account for a period of 90 days. The continuing review must include an analysis of any transactions that occur in the account, as well as any changes in the customer's risk profile. The review should be updated as needed to ensure that the customer is not engaging in any suspicious activities.

• Question 146:

  Which is an objective of the Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

  A. To issue their own recommendations, considering local typologies, ignoring the FATF 40 recommendations

  B. To work in parallel with FATF by operating on the basis of (mutual, joint, or common) recognition of their work

  C. To enforce implementation of the FATF recommendations amongst its member countries

  D. To work independently from FATF and to be closely involved in improving law enforcement outcomes in their regions

  Correct Answer: B

  To work in parallel with FATF by operating on the basis of (mutual, joint, or common) recognition of their work is an objective of the Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs). FSRBs are regional organizations that have been established by their member jurisdictions to foster implementation of anti-money laundering and counter-terrorist financing standards at a regional level. They are recognized by FATF as associate members and operate on a principle of mutual recognition of their work2

• Question 147:

  Which transaction monitoring processes would alert a bank for red flag activity?

  A. A client who does not typically make extravagant credit card purchases books an airline ticket on a travel website.

  B. The company has a name that is similar to that of a company whose directors are named on the bank's internal blacklist.

  C. A client makes a prepayment on their credit card and a week later makes multiple cash withdrawals using an automated teller machine (ATM) in a foreign country.

  D. A charity account receives multiple electronic transfers and then sends a wire transfer to a higher-risk country.

  Correct Answer: C

  Transaction monitoring processes are designed to alert banks to potential red flag activity. In this case, the prepayment on the credit card followed by the multiple cash withdrawals from an ATM in a foreign country could be indicative of a money laundering scheme. Banks should be alert to this type of activity and take appropriate measures.

• Question 148:

  Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?

  A. Asset freeze

  B. Financial prohibitions

  C. Export and import restrictions

  D. Arms and related materials embargo

  Correct Answer: C

  Export and import restrictions are sanctions imposed by countries to limit or prevent the import or export of certain goods and services. Export and import restrictions are typically used in order to protect a country's economic or political interests, or to prevent the proliferation of weapons or other dangerous materials. Export and import restrictions are often the first type of sanctions used in order to avoid escalating violent conflicts and/or proliferation of weapons. Examples of export and import restrictions include embargoes, quotas, or tariffs.

• Question 149:

  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: BC

• Question 150:

  Which constitute red flags in connection with a company involved in illegal logging? (Select Three.)

  A. Business registry activities state promotion of environmental protection

  B. High number of transactions through company's connected bank accounts

  C. Paper packaging demand production

  D. Expeditious shipment of wood too far away jurisdictions

  E. Use of heavy machinery in non-protected areas

  F. Executive's association with politically exposed persons

  Correct Answer: BDF