The regulators of a US financial institution find that the institution has failed to establish and maintain a reasonably designed AML program. Which regulatory actions should be taken? (Choose two.)
A. Cease and desist order
B. Obtain additional license
C. Deferred prosecution agreement
D. Matter requiring attention
E. Criminal penalties
When an existing customer becomes a politically exposed person (PEP), what should the KYC analyst do during the review/refresh period?
A. Update the list of signatories and perform enhanced due diligence in the next periodic refresh cycle.
B. Seek the compliance officer's advice before marking the authorized signatory as PEP.
C. Perform enhanced due diligence for the customer and update the KYC profile.
D. Update the new authorized signatories in the customer profile.
A UK national has accounts with a bank in Belgium, who maintains a branch in New York. The UK national has been recently added and screened against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List. Which action should the Belgian bank take?
A. Continue performing transactions as the bank's headquarters is in Belgium.
B. Allow all transactions up to the limit imposed by OFAC and report the transactions to the local financial intelligence unit.
C. Freeze the assets of the customer and report to OFAC.
D. Close the account and ask the customer to send the funds to a bank account in the US.
A financial institution's (FI's) policy is to apply enhanced due diligence (EDD) for every new client to ensure the effectiveness of the program. How should a consultant advise the FI's management team?
A. Suggest the FI needs to implement a risk-based approach for EDD.
B. Suggest the management team select the clients that are chosen for EDD.
C. Suggest the management team ask the regulator for advice on EDD measures.
D. Suggest EDD for 50% of the clients is appropriate.
The Head of Compliance was informed by external auditors of a finding that indicates an element of AML policy failed to comply with the regulatory requirement. Which action should the Head of Compliance take next?
A. Inform the compliance team about the finding.
B. Make necessary updates to AML policy documents.
C. Submit a corrective action plan with a target timeline.
D. Agree immediately and provide corrective actions.
Which factors should lead to a reassessment of the current AML program? (Choose two.)
A. Appointment of a new Chief Financial Officer
B. Change of company name
C. Change of internal audit team members
D. New product offering
E. Expansion of business to new territories
At a minimum, who should receive role-specific AML training? (Choose three.)
A. AML/Compliance staff
B. Consultants
C. Information technology staff
D. Human resources staff
E. Customer facing staff
F. Board of Directors
Which action should a financial institution take when it receives a grand-jury subpoena regarding a customer?
A. Have the institution's assigned legal counsel review the subpoena.
B. Make copies of the customer's documents and submit the originals to the enforcement agency.
C. Keep the customer's accounts open at the enforcement agency's verbal request.
D. Notify the customer being investigated before submitting documents.
Which is often an indirect consequence of non-compliance with AML laws?
A. Punitive fines
B. Drop in stock value
C. Sanctioning
D. Criminal proceedings
Which scenario best justifies why a customer's account might be closed by a financial institution?
A. The customer is the object of a civil subpoena.
B. The account has transactions that triggered multiple suspicious activity reports.
C. The customer uses a shipping company dealing with specially designated nationals.
D. The account shows periodic fixed amount remittances for tuition fees.
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