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NEW QUESTION # 52
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.
Answer: B
Explanation:
Explanation
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).
NEW QUESTION # 53
Which might suggest misuse of crowdfunding resources by a terrorist?
- A. A large deposit followed by multiple charges at a sporting goods store
- B. Multiple small deposits followed by the purchase of airplane tickets >
- C. A small charge at a gas station followed by a large charge at an electronics store
- D. Multiple small deposits followed by a wire transfer to a large well-known international charity
Answer: B
Explanation:
Explanation
The purchase of airplane tickets after receiving multiple small deposits from a crowdfunding platform might suggest that the funds are being used to facilitate travel for terrorist purposes. The other options are not necessarily indicative of terrorist financing, as they could be explained by legitimate reasons or other types of financial crimes.
NEW QUESTION # 54
The investigations team of a financial institution (Fl) wants to perform enhanced due diligence measures on operations done by a foreign bank related to transactions of companies that export scrap gold and silver. What would be the next best steps for the investigations team? (Select Two.)
- A. Ask the business manager who handles the relationship of the respondent bank if they can persuade the bank to close the accounts of the export companies.
- B. Ask the respondent bank if it has a risk rating for the exporting companies, if the customer profiles are updated, and if so. when was the last time it was done.
- C. Ask the legal department if it can proceed to rescind the contract of the correspondent banking relationship since the export of scrap gold and silver is a high-risk activity.
- D. Ask the respondent bank if the exporting companies have obtained an official license that permits the exporting of scrap gold and silver.
- E. Ask the respondent bank if it can file a SAR/STR in its jurisdiction since the investigations team also plans to do the same in the Fl's home country.
Answer: B,D
Explanation:
Explanation
The correct answers are B and C because these are the most relevant and reasonable steps for the investigations team to perform enhanced due diligence on the operations of the foreign bank and its customers.
Asking for the risk rating, customer profiles, and official licenses would help the team assess the level of risk and compliance of the foreign bank and its customers, who are engaged in a high-risk activity of exporting scrap gold and silver. The other options are not appropriate because they are either premature or ineffective.
Rescinding the contract, filing a SAR/STR, or closing the accounts would require more evidence and justification, and they may also damage the relationship with the foreign bank.
References: : Precious Metals & Stones
NEW QUESTION # 55
In a SAR/STR narrative concerning Individual A. which statement indicates a product of analysis rather than a fact or judgement?
- A. Individual A was the originator of nine wires totaling 225.000 USD between January and March 2020.
- B. Individual A made structured cash deposits on almost consecutive days.
- C. Individual A made structured cash deposits possibly to circumvent regulatory reporting requirements
- D. Individual A is a college student and employed part-time at a car wash.
Answer: C
Explanation:
Explanation
A product of analysis is a conclusion or inference that is derived from facts or judgments, using analytical techniques or tools. Option B is a product of analysis because it implies that the investigator has used a tool or technique, such as a threshold analysis, to identify a pattern of structured cash deposits that may indicate an attempt to evade reporting requirements. The other options are facts or judgments that can be verified by evidence or observation.
References: Advanced CAMS-FCI Certification Handbook, page 23.
NEW QUESTION # 56
A financial regulator is evaluating the effectiveness of a financial institution's (Fl) anti-financial crime program. Which condition should be met to satisfy the regulator?
- A. In the past 3 years, internal auditing results show no high-severity issues and a maximum of three medium-seventy and four low-severity issues.
- B. The program is aligned with the financial industry's anti-financial crime priorities.
- C. The program meets the minimum requirements of anti-financial crime standards, which are published by a financial industry association.
- D. The program is drafted using a risk-based approach to avoid the Fl being used as a conduit for criminal activities.
Answer: D
Explanation:
Explanation
The condition that should be met to satisfy the regulator is that the program is drafted using a risk-based approach to avoid the FI being used as a conduit for criminal activities. A risk-based approach means that the FI identifies, assesses, and understands its exposure to financial crime risks and applies appropriate measures to mitigate them. This is consistent with the international standards and best practices for anti-financial crime compliance. The program being aligned with the financial industry's anti-financial crime priorities, meeting the minimum requirements of anti-financial crime standards published by a financial industry association, or having no high-severity issues in internal auditing results are not sufficient to satisfy the regulator, as they do not necessarily reflect the specific risks faced by the FI or demonstrate its effectiveness in preventing and detecting financial crimes.
References: [Advanced CAMS-FCI Study Guide], page 14-15; [FATF Guidance on Risk-Based Approach for Effective Supervision], page 7-8.
NEW QUESTION # 57
Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?
- A. A series of small deposits followed by a large international wire to a well-known international charity
- B. A large purchase at a gas station immediately followed by several smaller purchases at an electronics store
- C. A series of small cash deposits made in rapid succession totaling just over 10,000 USD followed by a purchase at a jewelry store
- D. A large cash advance on a credit card and purchases at travel and sporting goods websites
Answer: D
Explanation:
Explanation
The pattern of activity that most strongly indicates an individual is a foreign terrorist fighter is a large cash advance on a credit card and purchases at travel and sporting goods websites. This is because this pattern may suggest that the individual is preparing to travel to a conflict zone and purchase equipment or supplies for terrorist activities. According to the United Nations Office on Drugs and Crime, some of the indicators of foreign terrorist fighters include1:
Sudden or increased financial activity, such as cash withdrawals, transfers, or deposits, especially in large amounts or involving foreign currency or locations.
Purchases of travel-related items, such as airline tickets, passports, visas, luggage, or clothing, especially to or from high-risk destinations or transit hubs.
Purchases of items that could be used for terrorist purposes, such as weapons, explosives, chemicals, communication devices, or survival gear.
Changes in behavior, such as expressing radical views, cutting ties with family or friends, joining extremist groups, or displaying signs of emotional distress.
References:
Foreign Terrorist Fighters - United Nations Office on Drugs and Crime
NEW QUESTION # 58
Which are primary purposes of Financial Action Task Force {FATF)-Style Regional Bodies? (Select Two.)
- A. Imposing special measures for non-cooperative jurisdictions
- B. Acting as a prudential regulatory body for financial institutions
- C. Promoting effective implementation of FATF recommendations
- D. Providing expertise and input in FATF policy-making
- E. Providing due diligence for foreign correspondent banks
Answer: C,D
Explanation:
Explanation
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)
NEW QUESTION # 59
A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank.
MEMO
To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered.
The information contained in the LC is as follows:
* Advising amount per unit 30.000.00 EU *10 units of BMW
* Model IX3
* Year of registration: 2020
Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy.
The relationship manager <RM) was contacted to conduct a full review of the exporter and to conduct a site visit.
Feedback from the RM:
The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country.
Findings from the investigation from various internal and external sources of information:
* There were no negative news or sanctions hits on the exporter company, directors, and shareholders.
* The registered address of the exporting business was a residential address.
* The price of the cats was checked and confirmed to be significantly below the market price of approximately
70,000 EU, based on manufacturer's new price guide.
* The key controllers behind the exporting company, that is the directors and During the investigation, the investigator determines that a nephew of the general.....
- A. should be flagged as a senior PEP.
- B. should be treated well to avoid reputational damage to the bank
- C. is a trustworthy source.
- D. is a high-net-worth individual
Answer: A
Explanation:
Explanation
The investigator should determine that a nephew of the general (Bank A's customer) should be flagged as a senior PEP . This is because the nephew is related to a senior military official who is a customer of Bank A, which is a high-risk jurisdiction with strict capital controls. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should identify and flag any customers who are PEPs or have close associations with PEPs, such as family members or business partners" (p. 24). The FI should also conduct enhanced due diligence on these customers and monitor their transactions for any suspicious or unusual activity.
The other options are not correct. The investigator should not determine that a nephew of the general should be treated well to avoid reputational damage to the bank (A), as this could compromise the integrity and objectivity of the investigation, as well as expose the bank to legal or regulatory risks. The investigator should not determine that a nephew of the general is a high-net-worth individual (B), as this is not relevant or material to the investigation, as the nephew's wealth does not affect his potential PEP status or risk level. The investigator should not determine that a nephew of the general is a trustworthy source (D), as this could be biased or inaccurate, as the nephew's trustworthiness does not depend on his relation to the general or his involvement in the transaction.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 60
Law enforcement (LE) suspects human trafficking to occur during a major sporting event. LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.
An investigator identified a pattern linked to a business. The business' account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3,000 USD. made by a person to the business' account occurred in many branches in the days after the sports event.
There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates" and "companionship." The Fl receives a keep open' letter from LE for the identified account and agrees to keep the account open.
What is the Fl required to do?
- A. Notify LE immediately after new transactions.
- B. Contact the client for information relating to the account.
- C. Stop filing SAR/STR reports on the account and/or customer.
- D. Ensure that the request includes an end date.
Answer: D
Explanation:
Explanation
The FI is required to ensure that the request includes an end date when it receives a keep open letter from LE for the identified account. This is because the FI has to balance its legal obligations to cooperate with LE and to protect its customers' privacy and rights. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should request a written confirmation from LE that includes a specific end date for the request, as well as a point of contact for any questions or concerns" (p. 35). The FI should also document the request and its compliance with it, and continue to monitor the account for any suspicious activity.
The other options are not correct. The FI should not contact the client for information relating to the account (A), as this could compromise the LE investigation or alert the client of the suspicion. The FI should not stop filing SAR/STR reports on the account and/or customer (B), as this could violate its regulatory obligations and expose it to legal risks. The FI should not notify LE immediately after new transactions (D), as this could also interfere with the LE investigation or tip off the client. The FI should follow the instructions of LE regarding when and how to share information.
NEW QUESTION # 61
Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?
- A. The central authority that receives the request sends it to a local judicial officer to find out if the information is available.
- B. The investigator may remove the evidence collected without asking permission to do so.
- C. The central authority of the requesting country sends a letter of request to the central authority of the other country.
- D. An investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.
Answer: C
Explanation:
Explanation
The first valid step in the Mutual Legal Assistance Treaty (MLAT) international cooperation process is for the central authority of the requesting country to send a letter of request to the central authority of the other country. The letter of request should provide a summary of the facts and information required, the reasons for the request, and any specific legal or procedural requirements that need to be met. (CAMS Manual, 6th Edition, Page 233).
NEW QUESTION # 62
A national financial intelligence unit (FIU) is undertaking the country risk assessment for the financing of the proliferation of weapons of mass destruction (WMD). The evaluation involves determining the exposure that financial institutions (FIs) have to operations that evade sanctions. Which should be performed by the FIU to assess proliferation financing risk? (Select Two.)
- A. Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions.
- B. Prepare new regulations that increase fines for FIs that allow financial operations on behalf of WMD proliferation sanctioned states.
- C. Compare the international finance operations with national PEP lists to determine if the systems used by FIs are properly calibrated to detect WMD proliferation financing.
- D. Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection.
- E. Analyze the domestic financial operations that are above the reporting threshold and have similar names to high-level officials of WMD proliferation sanctioned states.
Answer: A,D
Explanation:
Explanation
The FIU should cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions, as this would help identify any discrepancies or anomalies that could indicate sanctions evasion. The FIU should also evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection, such as inadequate screening systems, lack of training, or human error. These actions would help the FIU assess the proliferation financing risk and provide feedback and guidance to FIs on how to improve their detection and prevention capabilities.
References: Advanced CAMS-FCI Study Guide, page 32-33; [FATF Guidance on Counter Proliferation Financing], page 15-16.
NEW QUESTION # 63
Each month the automated transaction monitoring system generates alerts based on predetermined scenarios.
An alert was generated in relation to the account activity of ABC Foundation. Below is the transaction history for ABC Foundation (dates are in DD/MM/YYYY format).
The relationship manager for ABC Foundation contacts the client to request more information on the beneficiary of the transfer in Turkey. ABC Foundation advises that this is a not-for-profit charity group called
'Forever Free." Which is the best next step in the investigation?
- A. File a SAR/STR with the new information learned about the beneficiary.
- B. Contact the financial institution in Turkey that has a relationship with Forever Free and advise them of the investigation.
- C. Check the junsdiction's list of known chanties with connections to terrorist activity.
- D. Update the customer profile to include Forever Free as the recipient of the funds.
Answer: C
Explanation:
Explanation
The best next step in the investigation is to check the jurisdiction's list of known charities with connections to terrorist activity . This is because the FI has a responsibility to verify the legitimacy and reputation of the beneficiary of the funds, especially if it is a charity or non-profit organization that operates in a high-risk jurisdiction or sector. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should conduct enhanced due diligence on all parties involved in the investigation, including checking various sources of information, such as watch lists, sanctions lists, negative news, and official registries" (p. 24). The FI should also check if the beneficiary is consistent with the customer's profile and expected activity.
The other options are not as appropriate or effective as option C.
Contacting the financial institution in Turkey that has a relationship with Forever Free and advising them of the investigation (A) could violate confidentiality or data protection laws, as well as compromise the investigation or alert the customer or beneficiary of the suspicion. Updating the customer profile to include Forever Free as the recipient of the funds (B) could be premature or inaccurate, as it does not verify the nature and purpose of the transfer or the identity and legitimacy of the beneficiary. Filing a SAR/STR with the new information learned about the beneficiary (D) could also be premature or incomplete, as it does not confirm if there is any suspicious or criminal activity involved in the transfer or if there are any other red flags or indicators.
NEW QUESTION # 64
Which main vulnerability has led to an increase in the ransomware attacks perpetuated on small businesses?
- A. Weaker cybersecurity controls
- B. Inability to recover the encrypted information
- C. Ability to pay larger ransoms
- D. Tendency not to contact law enforcement
Answer: A
Explanation:
Explanation
Weaker cybersecurity controls are a main vulnerability that has led to an increase in ransomware attacks on small businesses, as they make them easier targets for cybercriminals who can exploit their systems and demand payment for restoring access to their data. The other options are not relevant to the vulnerability, as they relate to the consequences or responses of the victims.
NEW QUESTION # 65
A financial institution <FI> might use which option as intelligence to file a SAR/STR?
- A. A customer receives a large, one-time wire from a law firm.
- B. The Fl is unable to obtain evidence of required licensing or registration despite suspicion of money transmitting.
- C. The Fl discovers a large number of securities transactions that appear to be related to day trading.
- D. A customer makes several deposits in one month that appear to exceed their expected monthly income.
Answer: B
Explanation:
Explanation
The correct answer is C because the FI is unable to obtain evidence of required licensing or registration despite suspicion of money transmitting, which is a red flag for money laundering and a violation of federal and state laws. Option A is incorrect because making several deposits in one month that appear to exceed their expected monthly income might not be indicative of suspicious activity, depending on the customer's profile and source of funds. Option B is incorrect because receiving a large, one-time wire from a law firm might not be indicative of suspicious activity, depending on the customer's relationship with the law firm and the purpose of the wire. Option D is incorrect because discovering a large number of securities transactions that appear to be related to day trading might not be indicative of suspicious activity, depending on the customer's investment strategy and risk tolerance.
References: Money transmitter - Wikipedia; The Quick Guide To Money Transmitter Licenses - Surety Bond Insider; Financial Crime Typologies - Intermediate Certificate, Module 3.
NEW QUESTION # 66
Which statement most accurately characterizes the methods used by transnational criminal organizations?
- A. They are likely to specialize in one particular method and continue to refine that method to escape detection.
- B. They are unlikely to associate with known terrorist organizations due to the reputational risks.
- C. They see each other as competitors and rarely cooperate.
- D. They routinely engage in many different types of criminal activities as long as they think it will benefit them.
Answer: D
Explanation:
Explanation
The statement that most accurately characterizes the methods used by transnational criminal organizations is that they routinely engage in many different types of criminal activities as long as they think it will benefit them . This is because transnational criminal organizations are flexible and adaptable, and they exploit opportunities and vulnerabilities in different markets and jurisdictions. According to ACAMS2, "Transnational criminal organizations are involved in a wide range of illicit activities, such as drug trafficking, human trafficking, arms trafficking, money laundering, cybercrime, environmental crime, fraud, corruption, and terrorism" (p. 3). They also "operate across borders and regions, using complex networks and structures to evade detection and prosecution" (p. 3).
The other statements are not as accurate or comprehensive as option C. Transnational criminal organizations are unlikely to associate with known terrorist organizations due to the reputational risks (A) is false, as transnational criminal organizations may collaborate or cooperate with terrorist organizations for mutual benefit or convenience, such as sharing resources, routes, or contacts. Transnational criminal organizations are likely to specialize in one particular method and continue to refine that method to escape detection (B) is false, as transnational criminal organizations may diversify or change their methods depending on the circumstances or opportunities, such as shifting products, markets, or modus operandi. Transnational criminal organizations see each other as competitors and rarely cooperate (D) is false, as transnational criminal organizations may form alliances or partnerships with other criminal groups for strategic or tactical reasons, such as sharing information, expertise, or influence.
NEW QUESTION # 67
An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.
An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.
Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.
The analyst determines that site visits should be conducted for the three daycare businesses. Which observations at the on-site visits would justify writing a SAR/STR? (Select Three.)
- A. Lights turned off at the site during operational hours
- B. Signs of severe wear and poor maintenance at the site
- C. Visible signage indicating the purpose of the building
- D. A site located in a commercial building
- E. Visible attendance with children being dropped off by parents
- F. A full parking lot of cars with no staff at the site
Answer: A,B,F
Explanation:
Explanation
The observations at the on-site visits that would justify writing a SAR/STR are signs of severe wear and poor maintenance at the site (A), lights turned off at the site during operational hours , and a full parking lot of cars with no staff at the site (F). These observations suggest that the daycare businesses are not operating legitimately or providing adequate services to their customers, and that they may be misusing governmental grants or laundering money through their accounts. These observations are consistent with some of the red flags for fraud identified by ACAMS2, such as:
Inadequate facilities or equipment for the type of business
Lack of visible activity or customers at the business location
Discrepancy between reported income and expenses
Unusual volume or frequency of transactions
The other observations are not as relevant or indicative of fraud as options A, C, and F. A site located in a commercial building (B) could be a normal or legitimate choice for a daycare business, depending on its size, location, and availability. Visible attendance with children being dropped off by parents (D) could show that the daycare business is providing genuine services to its customers, although it does not rule out possible fraud or money laundering. Visible signage indicating the purpose of building (E) could also show that the daycare business is transparent and legitimate, although it does not guarantee its quality or compliance.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: ACAMS Fraud Prevention eLearning Course Module 3: Fraud Detection Techniques
NEW QUESTION # 68
According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)
- A. The management structure of the trust
- B. The responsibility and authority in the structure
- C. The general nature of business of the trust
- D. The general purpose behind the structure
- E. The source of funds in the structure
Answer: B,D
Explanation:
Explanation
Here is the exact information from the Financial Action Task Force (FATF) Guidance for a Risk-Based Approach for Trust and Company Service Providers:
"Understanding the management and ownership structure of a trust is crucial in assessing the ML/TF risk it poses. This includes the identity of all settlors, trustees and beneficiaries, and their respective roles and responsibilities, as well as the nature and purpose of the trust."
"TCSPs should obtain and maintain up-to-date information on the purpose and intended nature of the business relationship, the source of funds and wealth, and where relevant, the source of funds or wealth of the settlor and beneficiaries." Based on this information, the correct answers are A and D. Trust and Company Service Providers must understand the responsibility and authority in the structure, as well as the general purpose behind the structure in order to assess the overall risk of the trust and ensure that any transactions with the trust are legitimate.
NEW QUESTION # 69
The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.
As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.
The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.
Which steps for documenting the final investigation decision are appropriate for the investigator in this scenario?
- A. Add all of the information the Fl has about the subject, their account(s) activity, research results. KYC information, etc. to the SAR/STR.
- B. Do not document the investigation process if a SAR/STR is not filed.
- C. Exclude any open-source information from record-keeping since it is publicly available.
- D. Document the investigation process and retain all relevant documents in the case management system.
Answer: D
Explanation:
Explanation
The investigator should document the investigation process and retain all relevant documents in the case management system. This is because documenting the investigation process is a good practice to ensure the quality and consistency of the investigation, as well as to facilitate the review and audit of the investigation.
Retaining all relevant documents is also important to support the evidence and findings of the investigation, as well as to comply with the record-keeping requirements of the relevant authorities. The other options are incorrect because:
A: Excluding any open-source information from record-keeping is not advisable, as open-source information can provide valuable insights and context for the investigation, and may not be easily retrievable in the future.
B: Adding all of the information the FI has about the subject, their account(s) activity, research results, KYC information, etc. to the SAR/STR is not necessary, as the SAR/STR should only contain the essential information that is relevant and material to the suspicious activity. Adding too much information may obscure the main points and make the SAR/STR less effective.
D; Not documenting the investigation process if a SAR/STR is not filed is not acceptable, as the investigation process should be documented regardless of the outcome. Documenting the investigation process can help justify why a SAR/STR was not filed, and also provide a reference for future investigations involving the same subject or activity.
R:ferences:Advanced CAMS-FCI Certification | ACAMS, Section 3: Reporting Suspicious Activity, page 14 Leading Complex Investigations Certificate | ACAMS, Module 4: Documenting Your Investigation, page 4
NEW QUESTION # 70
A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?
- A. Reputation risk for the port
- B. US sanctions
- C. Loss of tax revenue
- D. Increased organized crime and corruption
Answer: D
Explanation:
Explanation
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)
NEW QUESTION # 71
An investigator at a corporate bank is conducting transaction monitoring alerts clearance.
KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.
* X is the UBO. and owns 97% shares of this entity customer;
* Y is is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.
KYC PROFILE
Customer Name: AAA International Company. Ltd
Customer ID: 123456
Account Opened: June 2017
Last KYC review date: 15 Nov 2020
Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul
2019 to Sep 2021 and noted the following transactions pattern:
TRANSACTION JOURNAL
Review dates: from July 2019 to Sept 2021
For Hong Kong Dollars (HKD) currency:
Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency:
Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.
RFI Information and Supporting documents:
According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:
1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank.
Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.
2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed. Which additional information should the investigator request?
- A. Adverse news screening on all names listed in the formation documents
- B. Source of the incoming funds to the group-related companies
- C. Formation document/description of the group-related companies
- D. Previously filed SARVSTR unrelated to the customer, but similar in content
Answer: B
Explanation:
Explanation
The additional information that the investigator should request is the source of the incoming funds to the group-related companies. This is because the customer declared that the ongoing source of funds to this account comes from group-related companies, but the transaction journal shows that the customer received funds from different third parties, not from group-related companies. Therefore, the investigator should verify the relationship and legitimacy of these third parties and their funds with the customer and the group-related companies. The other options are not relevant or necessary for this investigation.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 72
Which information is it best practice to share at the very beginning of a well-written SAR/STR narrative?
- A. The purpose of the SAR/STR narrative and a general description of the known or alleged violation
- B. Any and all relevant facts about the parties who facilitated the suspicious activity or transactions
- C. A specific description of the involved accounts and transactions, including the origination and application of funds
- D. Information about any follow-up actions conducted by the financial institution on the account
Answer: A
Explanation:
Explanation
The best information to share at the very beginning of a well-written SAR/STR narrative is the purpose of the SAR/STR narrative and a general description of the known or alleged violation. This is because this information provides an overview of why the SAR/STR is being filed and what type of suspicious activity or transaction is involved. It also helps to capture the attention of the reader and set the tone for the rest of the narrative.
References: Reporting Suspicious Activity Certificate, Module 4, page 7.
NEW QUESTION # 73
Which are some of the negative impacts from illegal wildlife trade and environmental crimes? (Select Two.)
- A. Threats to a country's political stability
- B. Threats to biodiversity
- C. Loss of potential tax proceeds
- D. Barriers to banking by low income population
- E. Public health consequences
Answer: B,C
Explanation:
Explanation
Some of the negative impacts of illegal wildlife trade and environmental crimes are loss of potential tax proceeds and threats to biodiversity. Loss of potential tax proceeds occurs when illegal wildlife trade and environmental crimes evade taxation and customs duties, depriving governments of revenues that could be used for public services and development. Threats to biodiversity occur when illegal wildlife trade and environmental crimes endanger species, habitats, and ecosystems, reducing their resilience and ability to provide essential services for human well-being. Public health consequences and threats to a country's political stability are not directly related to illegal wildlife trade and environmental crimes, but rather to other types of financial crimes such as money laundering, terrorism financing, or corruption.
References: [Advanced CAMS-FCI Study Guide], page 68-69; [FATF Report on Money Laundering from Environmental Crime], page 9-10.
NEW QUESTION # 74
Law enforcement (LE) suspects human trafficking to occur during a major spotting event. LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.
An investigator identified a pattern linked to a business. The business* account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3.000 USD. made by a person to the business' account occurred in many branches in the days alter the sports event.
There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates" and "companionship." Which fact should not be included in (he SAR/STR narrative?
- A. The request by law enforcement
- B. The air travel and hotel expenses
- C. The time of the cash deposits
- D. The sporting event
Answer: C
Explanation:
Explanation
The fact that should not be included in the SAR/STR narrative is the request by law enforcement (D). This is because the request by law enforcement is confidential and should not be disclosed to the customer or anyone else who is not authorized to know it. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should not include any reference to the LE request in the SAR/STR narrative, as this could compromise the LE investigation or alert the customer of the suspicion" (p. 35). The FI should also not inform the customer of the LE request or delay filing the SAR/STR because of it.
The other facts should be included in the SAR/STR narrative, as they are relevant and indicative of human trafficking money laundering. The air travel and hotel expenses (A) show that the customer is involved in moving people across different locations, which could be a sign of human smuggling or trafficking. The time of the cash deposits (B) shows that the customer is receiving cash payments during unusual hours, which could be a sign of illicit activities or services. The sporting event shows that the customer is exploiting a high-demand situation for their business, which could be a sign of opportunistic or organized crime.
NEW QUESTION # 75
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