ACAMS ACAMS Certifications CAMS Questions & Answers

• Question 151:

  A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

  A. US sanctions

  B. Increased organized crime and corruption

  C. Reputation risk for the port

  D. Loss of tax revenue

  Correct Answer: B

  A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer increased organized crime and corruption as a social/economic consequence. "Weaknesses in the AML/CFT regime can lead to a range of economic and social consequences, including...increased crime and corruption." (CAMS Manual, 6th Edition, page 32)

• Question 152:

  Which is an extraterritorial function of Office of Foreign Assets Control sanctions?

  A. Interrupting the Ell's economic and financial relations with third countries

  B. Implementing targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions

  C. Prohibiting transactions and requiring the blocking of assets of designated persons and organizations

  D. Requiring all appropriate elements of the financial services industry to report potential money laundering

  Correct Answer: C

  The Office of Foreign Assets Control (OFAC) sanctions are extraterritorial in nature, meaning that they apply beyond the national borders of the United States. OFAC sanctions are intended to restrict transactions and the movement of assets between the U.S. and designated persons and organizations. These sanctions are imposed to disrupt the economic and financial relations between foreign countries and designated persons, organizations, or countries. These sanctions include prohibiting transactions, requiring the blocking of assets, and implementing targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions.

• Question 153:

  According to the Basel Committee's principles on customer due diligence, a bank should:

  A. maintain systems to detect suspicious transactions based on a customer's velocity and volume patterns.

  B. refuse to conduct ongoing business with a customer who fails to provide proper identification documentation.

  C. obtain the information to establish the identity of a customer, beneficial owners, and any person acting on behalf of the customer.

  D. file a suspicious activity report when there is reason to believe the bank is being used for criminal activity.

  Correct Answer: C

  According to the Basel Committee's principles on customer due diligence, banks must obtain the necessary information to establish the identity of their customers, beneficial owners, and any persons acting on behalf of their customers. This includes verifying the identity of the customer and the beneficial owners and assessing the customer's risk profile. Additionally, banks must conduct ongoing due diligence to ensure that the customer does not give rise to suspicions of money laundering or terrorist financing [1].

• Question 154:

  What are the three basic functions of a national financial intelligence unit?

  A. Compile, assess, monitor

  B. Train, share, collect

  C. Investigate, report, record

  D. Receive, analysis, disseminate

  Correct Answer: D

  A National Financial Intelligence Unit (FIU) has three primary functions:

  receiving, analyzing, and disseminating information related to suspicious financial activities. The FIU's main focus is to identify and investigate suspicious activities, such as money laundering, terrorist financing, and other financial crimes. The

  FIU also works with other organizations and agencies to develop effective and efficient financial crime prevention strategies. The FIU is tasked with developing an effective system for receiving, analyzing, and disseminating information related

  to suspicious financial activities. The information collected is then used to identify, investigate, and prosecute financial crimes.

• Question 155:

  Which is a key characteristic of the Financial Action Task Force (FATF) Regional Style Bodies for combatting money laundering/terrorist financing?

  A. Instructing each member country to place FATF recommendations into law

  B. Implementing regional mutual evaluation procedures

  C. Emphasizing regional co-operation between member countries

  D. Enabling FATF standards to be specific to each region

  Correct Answer: C

• Question 156:

  A compliance officer of a financial institution is reviewing a payment for sanctions compliance between two parties in Europe and Asia. The payment is in Euros and involves the provision of services to a company located in a jurisdiction subject to Office of Foreign Assets Control secondary sanctions. Which factor is most important in determining the compliance officer's response?

  A. Asset freezes only prohibit US companies from engaging in certain activities with counterparts from a sanctioned jurisdiction.

  B. A one-off commercial transaction conducted between parties in Europe and Asia is not subject to secondary sanctions.

  C. The threat of U.S. sanctions against foreign individuals and entities continues to exist despite the absence of a U.S. nexus.

  D. Secondary sanctions only target specific sectors of the economy such as the banking and finance sectors.

  Correct Answer: C

  The threat of US sanctions against foreign individuals and entities continues to exist despite the absence of a US nexus. This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 591, which states: "It is important to note that the threat of US sanctions against foreign individuals and entities continues to exist even when there is no direct US nexus (i.e., no US persons or assets involved)."

• Question 157:

  Which are the requirements of the Fifth AML Directive of the European Union (EU)? (Choose two.)

  A. Promoting the record keeping obligations of banks to the maximum amount of data necessary for the purposes of AML/CFT investigations.

  B. Broadening the criteria for assessing high-risk third countries.

  C. Extending AML/CFT rules to entities that provide virtual currency services.

  D. Developing a variant approach in the strategy for the treatment of organized crime and terrorism threats.

  E. Providing information access to Financial Intelligence Units (FIUs) according to the differences in the nature of their functions, competences and powers.

  Correct Answer: BC

• Question 158:

  Which factors specific to the securities industry increase the exposure to money laundering risk? (Select Two.)

  A. The increase of sector-specific guidance

  B. The practice of brokerage firms maintaining securities as nominees

  C. The complexity of the securities business

  D. The link to sanctioned countries

  E. The speed of the transactions

  Correct Answer: BE

  The practice of brokerage firms maintaining securities as nominees and the speed of the transactions are two factors specific to the securities industry that increase the exposure to money laundering risk. Nominee accounts can be used to conceal beneficial ownership and obscure transaction trails. The speed of transactions can make it difficult to detect and prevent suspicious activity in real time.

• Question 159:

  Which red flags should be considered prior to establishing a relationship with a third party? (Select Two.)

  A. The third party has a lack of anti-corruption compliance clauses in agreements.

  B. The third party's amount to be paid for goods and services appears to be reasonable.

  C. The third party has requested unusual payment or billing procedures.

  D. The third party has a declaration of non-family or business ties with government officials.

  E. The third party has sufficient capability to provide the services or goods for which it is being engaged.

  Correct Answer: AC

  The red flags that should be considered prior to establishing a relationship with a third party are the lack of anti-corruption compliance clauses in agreements (A) and unusual payment or billing procedures requested by the third party (C). According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, "red flags include, but are not limited to: [...] lack of anti-corruption compliance clauses in agreements (page 330) and unusual payment or billing procedures requested by the third party (page 331)."

• Question 160:

  A long-term client of an insurance company makes changes to a policy that require payment of an additional lump sum. The amount payable is high, though within the client's means based on the KYC information collected. The payment is made via a company in another jurisdiction that is known to have lax AML controls. Which indicator of suspicious activity is present?

  A. The payment was made via a company that appears to be owned and controlled by the client being insured.

  B. The payment was made via a company in a jurisdiction known to have lax AML controls.

  C. A long-term client wants a change to a policy that is already in force.

  D. The additional premium payable appears to be within the client's means based on the KYC information collected.

  Correct Answer: B

  Making payments via a company located in a jurisdiction that is known to have lax anti-money laundering controls is a sign of suspicious activity and should be reported. When making a payment of this nature, the insurance company should be aware of the client's source of funds and the possible risks associated with the transaction.