[Nov-2024] Check your preparation for ACAMS CAMS On-Demand Exam
Practice Exam CAMS Realistic Dumps Verified Questions
The CAMS certification is an essential credential for professionals working in the AML industry. It provides individuals with the knowledge and skills they need to effectively combat money laundering and terrorist financing. Additionally, the certification is recognized worldwide and is highly valued by employers in the financial services industry.
The CAMS exam is recognized as the gold standard in AML certification, and passing the exam is a significant achievement in the AML field. Certified Anti-Money Laundering Specialists certification is highly valued by employers, and many organizations require their employees to be CAMS certified. The CAMS certification is also recognized by regulatory bodies and law enforcement agencies worldwide, which makes it a valuable asset for professionals working in the AML field.
NEW QUESTION # 238
A director of a financial institution was convicted of laundering money as part of a Ponzi scheme and terminated. As a result of an internal investigation evidence proved that an employee assisted in the illegal activity.
Which action should the institution take?
- A. Discipline the employee and inform local authorities
- B. Require all employees to complete additional anti-money laundering training
- C. Since the employee was not charged, no further action is required
- D. Discipline the employee with no further action
Answer: A
Explanation:
If an employee of a financial institution is found to have assisted in money laundering or any other criminal activity, the institution should take appropriate disciplinary action and report the employee to the relevant authorities. This is not only a legal obligation, but also a sound compliance practice to protect the institution's reputation and integrity. Disciplining the employee without informing the authorities would be insufficient and potentially expose the institution to further legal risks. Ignoring the employee's involvement or requiring additional training for all employees would be ineffective and inappropriate responses.
References:
* ACAMS CAMS Certification Package - 6th Edition, Chapter 5: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 121-1221
* ACAMS CAMS Certification Package - 6th Edition, Chapter 6: AML Compliance Program, pp. 143-
1441
* ACAMS CAMS Certification Video Training Course, Module 5: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Lesson 5.2: International Standards and Best Practices2
* ACAMS CAMS Certification Video Training Course, Module 6: AML Compliance Program, Lesson
6.4: Internal Controls2
NEW QUESTION # 239
A suspicious transaction report has been filed on an account owned by the wife of the bank's ChiefExecutive Officer. Which of the following is the most important consideration when deciding whether to recommend closing the account?
- A. Chief Executive's reputational risk
- B. Requests from the competent authority
- C. The institution's anti-money laundering policy
- D. Customer relations
Answer: C
Explanation:
The most important consideration when deciding whether to recommend closing the account is the institution' s anti-money laundering policy. This is because the policy should provide clear and consistent criteria for account closure decisions, based on the risk assessment, the nature and severity of the suspicious activity, the customer due diligence information, and the legal and regulatory obligations of the institution. The policy should also ensure that the account closure process is independent, objective, and transparent, and that it does not compromise the confidentiality of the suspicious transaction report or the investigation.
References: =
* ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 5, Section 5.4.2, page 1971
* ACAMS CAMS Certification Video Training Course, Module 5, Lesson 5.4, video time 9:00-10:302
* ACAMS CAMS Certification Practice Exam, Question 145, page 2863
NEW QUESTION # 240
An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.
What are two red flags that indicate how trade-based money laundering could be occurring in this instance?
(Choose two.)
- A. The type of commodity being shipped appears inconsistent with the exporter or importer's regular business activities
- B. The packaging is inconsistent with the commodity or shipping method
- C. The transaction involves the use of front (or shell) companies
- D. Significant discrepancies appear between the description of the commodity on the bill of lading and the invoice
Answer: C,D
NEW QUESTION # 241
What are some red flags pertaining to potentially suspicious transactions by a customer? Choose 3 answers
- A. Having multiple individuals use the ATM card connected with the account m different cities
- B. Having a commercial account with cash deposits
- C. Having multiple addresses and/or moving frequently
- D. Have a common address with several other bank clients
Answer: A,C,D
NEW QUESTION # 242
Which Trust parties should be identified to determine the true nature of the Trust relationship according to Basel guidelines? (Choose three.)
- A. Beneficiaries
- B. Payees
- C. Trust Administrators
- D. Settlors/grantors
- E. Trustees
- F. Respondents
Answer: A,D,E
Explanation:
According to the Basel guidelines on customer due diligence for banks, a trust is a legal arrangement whereby a person (the settlor or grantor) transfers the legal ownership of specific assets to another person or entity (the trustee) to hold for the benefit of a third person or persons (the beneficiaries)1. The Basel guidelines recommend that banks should identify and verify the identity of the following parties to determine the true nature of the trust relationship:
The trustee, who is the person or entity that has the legal authority and duty to manage the trust assets and distribute them to the beneficiaries according to the trust deed2. The trustee may also be the settlor, the beneficiary, or both, depending on the type and structure of the trust3.
The beneficiaries, who are the persons or entities that have a beneficial interest in the trust assets or income, either presently or in the future4. The beneficiaries may be named individuals, classes of persons, or charitable causes.
The settlor or grantor, who is the person or entity that creates the trust and transfers the legal ownership of the assets to the trustee. The settlor or grantor may also retain some rights or powers over the trust, such as the ability to appoint or remove trustees, beneficiaries, or protectors.
The other three options are incorrect because:
Respondents are not trust parties, but rather financial institutions that maintain correspondent banking relationships with other financial institutions. Respondents are not relevant for the identification of the trust relationship, but rather for the due diligence of the correspondent banking relationship.
Payees are not trust parties, but rather persons or entities that receive payments from the trust or other sources. Payees are not relevant for the identification of the trust relationship, but rather for the monitoring of the transactions and activities of the trust.
Trust administrators are not trust parties, but rather persons or entities that provide administrative services to the trust, such as accounting, record-keeping, or tax compliance. Trust administrators are not relevant for the identification of the trust relationship, but rather for the assessment of the risk and complexity of the trust.
References:
1: Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 17 2:
Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 17 3:
ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 111 4: Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 17 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 111 : Basel Committee on Banking Supervision, Customer due diligence for banks, October
2001, 4, p. 17 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 111 : Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 10 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 112 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 112
NEW QUESTION # 243
Pursuant to the Third European Union Money Laundering Directive, how long after being out of prominent office should a person NOT be considered to be a Politically Exposed Person (PEP)?
- A. 3 years
- B. 1 year
- C. 2 years
- D. 4 years
Answer: B
NEW QUESTION # 244
When deficiencies are identified in the Financial Action Task Force (FATF) mutual evaluation report, the assessed country needs to:
- A. prepare a report to defend its position against the FATF secretariat, which is comprised of the assessors.
- B. request exception from the relevant FATF-style regional body by submitting a report with the reasons.
- C. address the shortcomings identified in the report and agree to post-assessment monitoring by FATF.
- D. pay a penalty for the delay in adopting the FATF 40 recommendations accurately and timely.
Answer: C
Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) resources, the FATF mutual evaluation process is a peer review mechanism that assesses the level of compliance of a country with the FATF 40 recommendations and the effectiveness of its anti-money laundering and counter-terrorist financing system.
The mutual evaluation report identifies the strengths and weaknesses of the assessed country and provides recommendations for improvement. The assessed country needs to address the shortcomings identified in the report and agree to post-assessment monitoring by FATF, which involves regular follow-up reports and actions to remedy the deficiencies. The other options are not correct, as they do not reflect the FATF mutual evaluation process or the obligations of the assessed country.
References:
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 4:
International Standards and Global Initiatives, page 97.
FATF, Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems, February 2013, updated October 2019, 1.
FATF, Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations, October 2019, 2.
NEW QUESTION # 245
Which two factors should increase the risk of a correspondent bank customer and require additional due diligence according to the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking? (Choose two.)
- A. The customer is located in a Financial Action Task Force member country and the bank's head of information security is a politically exposed person.
- B. The customer is located in a Financial Action Task Force member country and provides services primarily to a local individual customer.
- C. The customer is located in a non-Financial Action Task Force member country and services mostly commercial customers who engage in international trade.
- D. The customer is located in a Financial Action Task Force member country and provides services to other correspondent banks in neighboring countries.
Answer: C,D
NEW QUESTION # 246
An internal review of anti-money laundering training documentation revealed only new agents employed by a financial institution that sells life insurance products were trained. Additionally, it typically took the institution 8 months to begin training for new actuaries. The compliance officer explained training was limited to actuaries because they perform the only high-risk function. The institution relied on e-learning techniques without follow-up assessment.
Which of the following issues would the internal review most likely recommend?
- A. Pro duct-specific anti-money laundering training should be provided company-wide.
- B. The institution must provide anti-money laundering training to actuaries within 6 months.
- C. All staff, apart from the Board of Directors, must be trained.
- D. Continue using e-learning to emphasize anti-money laundering content during training.
Answer: A
Explanation:
The internal review would most likely recommend that the institution provide product-specific anti-money laundering training to all relevant employees, not just actuaries. This is because life insurance products can be used for money laundering purposes, such as purchasing policies with illicit funds, surrendering policies for cash value, or using policies as collateral for loans. Therefore, all employees who are involved in selling, servicing, or processing life insurance products should be aware of the money laundering risks and red flags associated with these products, and how to report any suspicious activity. The institution should also ensure that the training is timely, effective, and tailored to the specific roles and responsibilities of the employees.
The other options are not as relevant or appropriate as the correct answer. Option A is too broad, as not all staff need to be trained on anti-money laundering, only those who are relevant to the institution's business activities and exposure to money laundering risks. Option C is too narrow, as it only focuses on actuaries and does not address the need for training other employees who may deal with life insurance products. Option D is not sufficient, as e-learning alone may not be effective in ensuring that employees understand and retain the anti-money laundering content, and the institution should also conduct follow-up assessments to measure the impact and outcomes of the training.
References:
* ACAMS Study Guide for the CAMS Certification Examination - 6th Edition, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), page
57.
* ACAMS CAMS Certification Video Training Course, Module 3: Compliance Standards for Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT), Lesson 3.5: Training and Testing.
* Best Practices for Anti-Money Laundering Compliance - DIRO Original, Section 3: Adequate Training.
NEW QUESTION # 247
Which action should countries take related to the financing of terrorist acts in accordance with the Financial Action Task Force 40 Recommendations?
- A. Sanction
- B. Criminalize
- C. Oppose
- D. Prosecute
Answer: B
Explanation:
The FATF 40 Recommendations are the international standards for combating money laundering, terrorist financing, and proliferation financing. They provide a comprehensive and consistent framework of measures that countries should implement in their national systems. Recommendation 5 of the FATF 40 Recommendations states that countries should criminalize the financing of terrorism, terrorist acts and terrorist organizations. This means that countries should adopt laws that make it an offence to provide or collect funds or other assets with the intention or knowledge that they will be used to carry out terrorist acts or support terrorist organizations. Countries should also ensure that such offences are punishable by effective, proportionate and dissuasive sanctions. Furthermore, countries should ensure that terrorist financing offences extend to any person who wilfully provides or collects funds or other assets by any means, directly or indirectly, with the unlawful intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out terrorist acts or support terrorist organizations. Therefore, the correct answer is D. Criminalize, as this is the action that countries should take related to the financing of terrorist acts in accordance with the FATF 40 Recommendations.
References:
* FATF website
* FATF 40 Recommendations - February 2012
* FATF Recommendation 5 - Criminalisation of Terrorist Financing
Reference: https://www.fatf-gafi.org/publications/methodsandtrends/documents/fatf-action-against- terroristfinancing- feb-2019.html
NEW QUESTION # 248
Which should be provided to the board of directors or designated specialized committee when preparing suspicious activity reports (SARs)?
- A. Copies of all SARs filed during the reported period
- B. All possible details of SARs filed during the reported period
- C. Names of all customers subject to SARs filed during the reported period
- D. Statistical data regarding SARs filed during the reported period
Answer: D
Explanation:
The board of directors or designated specialized committee should be provided with statistical data regarding SARs filed during the reported period, such as the number, type, and amount of SARs, as well as any trends or patterns identified. This would enable them to oversee the effectiveness of the anti-money laundering program and ensure compliance with regulatory requirements. Providing too much detail, such as names of customers or copies of SARs, could compromise the confidentiality of the SARs and expose the institution to legal risks.
References:
ACAMS Study Guide for the CAMS Certification Examination, 6th Edition, Chapter 5, page 153, section "Reporting to the Board of Directors or Designated Specialized Committee".
ACAMS CAMS Certification Video Training Course, Module 5, Lesson 5.4, "Reporting to the Board of Directors or Designated Specialized Committee".
NEW QUESTION # 249
A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?
- A. Loss of tax revenue
- B. US sanctions
- C. Increased organized crime and corruption
- D. Reputation risk for the port
Answer: C
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 # 250
A law enforcement official calls a bank inquiring about a customer who is currently under investigation. The law enforcement official requests information about the customer.
How should the bank respond?
- A. Confirm the customer is either a current or former customer
- B. Inform the board of directors before responding to the request
- C. Request a formal letter be submitted to verify the validity of the request
- D. Provide the requested information to help aid in the investigation
Answer: C
Explanation:
Explanation/Reference: https://ico.org.uk/for-organisations/guide-to-freedom-of-information/receiving-a-request/
NEW QUESTION # 251
Why do governments and multi-national bodies impose economic sanctions?
- A. To combat an imminent terrorist threat
- B. To enforce foreign policy objectives
- C. To impede kleptocracy
- D. To prevent fraudulent international trade transactions
Answer: B
Explanation:
Explanation/Reference: https://en.wikipedia.org/wiki/Economic_sanctions
NEW QUESTION # 252
Which measure to mitigate risk does the Basel Committee's Customer Due Diligence Principles suggest banks apply when accepting business from non-face-to-face customers?
- A. Requiring additional review of account opening documents by senior management
- B. Requiring an in person interview with the customer
- C. Certification of documents presented
- D. Imposing a limit on permissible account activity for a defined period of time
Answer: C
NEW QUESTION # 253
Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?
- A. They obtain intelligence that might lead to evidence
- B. They receive reports of suspicious transactions from financial institutions to disseminate to local Law enforcement and foreign FIUs
- C. They provide a legal basis for transmitting evidence that can be used for prosecution and judicial proceedings
- D. They issue the Prmc4es of Information Exchange Between Financial intelligence Units (FIUs)
Answer: C
Explanation:
A Mutual Legal Assistance Treaty (MLAT) is an agreement between two or more countries for the purpose of gathering and exchanging information in an effort to enforce public or criminal laws1. MLATs provide a legal basis for transmitting evidence that can be used for prosecution and judicial proceedings, such as witness statements, bank records, search and seizure orders, and asset forfeiture2. MLATs also facilitate the cooperation and coordination between law enforcement authorities of different jurisdictions in investigating and prosecuting transnational crimes, such as money laundering, terrorist financing, corruption, and cybercrime3. The other options are incorrect because:
B: MLATs do not receive reports of suspicious transactions from financial institutions, but rather request specific information or evidence from foreign authorities. Financial institutions report suspicious transactions to their domestic Financial Intelligence Units (FIUs), which may then share the information with foreign FIUs through other mechanisms, such as the Egmont Group or bilateral agreements4.
C: MLATs do not obtain intelligence that might lead to evidence, but rather request evidence that is already available or can be obtained by foreign authorities. Intelligence is a broader term that refers to any information that is relevant to the security or interests of a country, and may not be admissible as evidence in a court of law5. Intelligence may be obtained through other means, such as covert operations, surveillance, or informants6.
D: MLATs do not issue the Principles of Information Exchange Between Financial Intelligence Units (FIUs), but rather follow them. The Principles of Information Exchange are a set of guidelines that were adopted by the Egmont Group of FIUs in 2001, and aim to enhance the cooperation and communication among FIUs in exchanging financial information and intelligence7. The Principles of Information Exchange are not legally binding, but rather reflect the best practices and standards of the FIU community.
References:
1: Mutual legal assistance treaty - Wikipedia
2: FREQUENTLY ASKED QUESTIONS REGARDING LEGAL ASSISTANCE IN CRIMINAL
MATTERS, page 1
3: The Mutual Legal Assistance Problem explained | wilmap
4: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 125
5: Intelligence - Wikipedia
6: Intelligence cycle - Wikipedia
7: Egmont Group of Financial Intelligence Units - Wikipedia
8: Principles for Information Exchange Between Financial Intelligence Units for Money Laundering and Terrorism Financing Cases
NEW QUESTION # 254
Why do trusts established in certain offshore jurisdictions make good vehicles to launder money?
- A. Trust are typically set up to minimize taxes
- B. Offshore jurisdictions are unfamiliar with trusts
- C. Names of the settlor and beneficiaries are not publicly available
- D. Trusts may hold assets of significant size
Answer: D
NEW QUESTION # 255
One area of responsibility for the Board of Directors when implementing a successful AML program is to:
- A. create a culture of compliance based on the profit expectation.
- B. hire a third-party firm to be responsible for the AML compliance.
- C. manage the day-to-day processes of the compliance program.
- D. ensure the appointment of a qualified chief AML officer.
Answer: D
NEW QUESTION # 256
A personal banking customer who simultaneously opens several accounts will most likely cause further inquiry in which of the following scenarios?
- A. A checking and a savings account.
- B. An individual account and a joint spousal account.
- C. A personal account and a corporate account.
- D. Accounts with almost identical names.
Answer: D
NEW QUESTION # 257
A financial institution opens a mortgage loan for a customer. During a subsequent internal review of the loan, it was noted that the appraisal used to support the loan was performed by an appraiser who was not on the institution's approved appraiser list. This exception was approved by the senior loan underwriter. The reviewer, who had examined other loans from the same general area, noted that the value on the loan appeared significantly higher than on other comparable properties. Which of the following should the anti-money laundering specialist recommend next?
- A. Document the underwriter's actions prior to filing a suspicious transaction report.
- B. Determine whether the loan underwriter reviewed the appraiser's license for validity.
- C. Alert local law enforcement regarding a potential collusive relationship between the underwriter and appraiser.
- D. Train the appraiser on anti-money laundering compliance for high-end real estate loans.
Answer:
Explanation:
Explanation
https://www.fdic.gov/regulations/laws/rules/5000-4800.html
When analyzing individual transactions, examiners will review an appraisal or evaluation to determine whether the methods, assumptions, and value conclusions are reasonable. Examiners also will determine whether the appraisal or evaluation complies with the Agencies' appraisal regulations and is consistent with supervisory guidance as well as the institution's policies. Examiners will review the steps taken by an institution to ensure that the persons who perform the institution's appraisals and evaluations are qualified, competent, and are not subject to conflicts of interest.
NEW QUESTION # 258
To what extent should senior management and the Board of Directors be involved in the filing of any STR?
- A. They should be informed of all significant STRs and the numbers and trends of the filings
- B. They should review and approve the filing of all STRs
- C. They should be the only designated individuals to communicate with law enforcement
- D. They should be given copies of all STRs filed by the institution
Answer: A
Explanation:
According to the ACAMS CAMS Certification Study Guide (6th edition), senior management and the Board of Directors have the ultimate responsibility for the effectiveness of the AML program and the compliance with the relevant laws and regulations. Therefore, they should be informed of all significant STRs and the numbers and trends of the filings, as this would help them to assess the level of risk exposure and the adequacy of the controls and resources. The other options are either too restrictive or too burdensome for senior management and the Board of Directors, and may interfere with the timely and confidential filing of STRs.
References: ACAMS CAMS Certification Study Guide (6th edition), page 361; ACAMS CAMS Certification Video Training Course, Module 2, Lesson 12
NEW QUESTION # 259
During a law enforcement investigative interview regarding potential money laundering, the suspect starts making assertions and statements that the investigator believes are false.
How should the investigator respond?
- A. Direct the interview in another direction until there is better rapport before returning back to the troubling question
- B. Ask question of a material nature about the suspected false statements without revealing the suspected deception
- C. Advise the suspect that the interview will be terminated if there is suspicion of deception
- D. Inform the suspect that deception is obvious and continue the interview
Answer: B
Explanation:
QUE According to the ACAMS Study Guide, one of the skills of an effective AML investigator is to conduct investigative interviews using appropriate techniques and methods1. One of the techniques is to use open- ended questions that elicit detailed responses from the interviewee, and to avoid leading or suggestive questions that may reveal the investigator's assumptions or suspicions1. Therefore, the best option is to ask question of a material nature about the suspected false statements without revealing the suspected deception, as this would allow the investigator to gather more information and evidence, and to test the consistency and credibility of the interviewee's answers.
The other options are not advisable or effective, because:
* A. Informing the suspect that deception is obvious and continuing the interview is not a good strategy, because it may antagonize the suspect and make them less cooperative or more defensive. It may also alert the suspect to the investigator's knowledge and sources, and give them an opportunity to change or modify their story2.
* B. Advising the suspect that the interview will be terminated if there is suspicion of deception is not a good strategy, because it may create a negative impression of the investigator and the investigation, and it may discourage the suspect from providing any useful information. It may also imply that the investigator has insufficient evidence or authority to pursue the case2.
* C. Directing the interview in another direction until there is better rapport before returning back to the troubling question is not a good strategy, because it may waste time and resources, and it may lose the focus and momentum of the investigation. It may also signal to the suspect that the investigator is not confident or competent, and it may give the suspect a chance to prepare or rehearse their answers2.
References:
1: ACAMS Study Guide, 6th Edition, Chapter 4: Conducting and Supporting the Investigation, page
105. 2: 46 AML Investigator Interview Questions (And Sample Answers)
NEW QUESTION # 260
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