Free ACAMS CAMS Study Guides Exam Questions and Answer
CAMS Exam Dumps, CAMS Practice Test Questions
Career Path
After obtaining this specialist-level CAMS certification, individuals may go on to get more advanced CAMS designations by ACAMS, which are offered in three fields. Thus, they are the Advanced CAMS - Audit, Advanced CAMS - Financial Crimes Investigations, and Advanced CAMS - Risk Management.
NEW QUESTION # 343
A financial institution (FI) is being investigated for possible money laundering. When cooperating with law enforcement agencies, which additional steps should the FI ensure are taken? (Choose two.)
- A. Address the document destruction policy to ensure the relevant documents are destroyed.
- B. Make employees, including corporate officers, unavailable for interviews and refuse documents upon receipt of a subpoena.
- C. Centralized control is maintained over all requests and responses to ensure completeness and timely responses.
- D. Subpoenas and other information requests should be reviewed by senior management and an investigations group or counsel.
- E. Inquiries from the media are not answered directly, but rather are addressed by replying, "No comment."
Answer: C,D
Explanation:
When an FI is being investigated for possible money laundering, it is important that it cooperates with the law enforcement agencies (LEAs) in a professional and transparent manner. This means that the FI should take the following steps:
* Maintain centralized control over all requests and responses to ensure completeness and timely responses. This will help the FI to avoid duplication, inconsistency, or omission of information, as well as to track the status and progress of the requests and responses. It will also facilitate the communication and coordination between the FI and the LEAs, and demonstrate the FI's willingness to cooperate12.
* Review subpoenas and other information requests by senior management and an investigations group or counsel. This will help the FI to assess the scope, relevance, and legality of the requests, as well as to identify any potential risks, conflicts, or sensitivities. It will also enable the FI to prepare and provide the requested information in an accurate and timely manner, and to seek clarification or negotiation if necessary13.
The other options are not advisable, as they may indicate a lack of cooperation, obstruct the investigation, or damage the FI's reputation. For example:
* Making employees, including corporate officers, unavailable for interviews and refusing documents upon receipt of a subpoena may be considered as non-compliance, evasion, or contempt of court, and may result in legal sanctions or penalties4.
* Addressing the document destruction policy to ensure the relevant documents are destroyed may be seen as tampering with evidence, destroying records, or concealing information, and may constitute a criminal offence or a breach of regulatory obligations5.
* Not answering inquiries from the media directly, but rather replying, "No comment" may create a negative impression, fuel speculation, or invite criticism, and may harm the FI's image, credibility, or trustworthiness.
References:
* Cooperation between FIUs, Law Enforcement Authorities, and Prosecutors
* AML and Financial crimes investigation
* Mechanisms for interaction of law enforcement agencies in the field of counteracting and combating money laundering
* Recommendation 30: Responsibilities of law enforcement and investigative authorities
* Money laundering and illicit finance
NEW QUESTION # 344
During the course of work on behalf of a client, a lawyer participated in the movement of money. If the lawyer suspects an act of money laundering, which of the following should the lawyer do according to European Union Money Laundering Directives?
- A. Adhere to business confidentiality laws.
- B. Inform the client of the intent to terminate services.
- C. Follow bank secrecy laws.
- D. Report the facts to the competent authorities.
Answer: A
Explanation:
According to the FATF Recommendations, financial institutions should maintain all necessary records on transactions and customers for at least five years, and make them available to competent authorities upon appropriate authority1. This includes records and documents related to suspicious transactions that have been reported to the financial intelligence unit (FIU) or other designated authorities. Providing the supporting documentation to competent authorities upon request is essential for the investigation and prosecution of money laundering and terrorist financing offences, as well as for the identification and tracing of criminal assets2.
Hinting to the customer that she should come in and explain her behavior is not a correct answer, as it may tip off the customer about the suspicion and compromise the effectiveness of the reporting system. Financial institutions should not disclose to the customer or to third parties that a suspicious transaction report (STR) or related information is being reported to the FIU3.
Maintaining adequate written documentation of all individuals and transactions reported is not a sufficient answer, as it does not imply cooperation with competent authorities. Financial institutions should not only keep records, but also provide them to the authorities when requested.
Submitting information upon receiving a legal request from parties involved in a civil lawsuit is not a relevant answer, as it does not relate to the cooperation with competent authorities for AML/CFT purposes. Civil lawsuits are not part of the AML/CFT framework, and financial institutions should not disclose confidential information to private parties without proper legal grounds.
:
FATF Recommendation 11: Record-keeping 1
FATF Recommendation 31: Powers of law enforcement and investigative authorities 2 FATF Recommendation 21: Tipping-off and confidentiality 3
NEW QUESTION # 345
When a bank performs a risk assessment, what areas should an institution focus on?
- A. The geographic locations where the institution does business
- B. The amount of the money the institution earns prior to taxes
- C. The type and location of the institution's clients
- D. The nature and breadth of the services and products the institution provides
Answer: A,C,D
Explanation:
A bank's risk assessment is a process of identifying, measuring, and mitigating the potential risks that the bank faces in its operations, products, services, and customers. According to the ACAMS Study Guide, a bank should focus on the following areas when performing a risk assessment1:
The type and location of the institution's clients. This involves analyzing the customer base, the types of accounts and transactions, the source and destination of funds, the level of due diligence and verification, and the risk profile of the customers. For example, a bank should consider whether its customers are individuals or entities, domestic or foreign, politically exposed persons, high-net-worth individuals, non-profit organizations, or cash-intensive businesses. The location of the customers may also indicate the level of exposure to money laundering, terrorist financing, sanctions, or tax evasion risks.
The nature and breadth of the services and products the institution provides. This involves evaluating the range and complexity of the products and services offered by the bank, the delivery channels, the payment methods, and the innovation and technology involved. For example, a bank should consider whether it offers wire transfers, correspondent banking, trade finance, private banking, trust and fiduciary services, prepaid cards, mobile banking, or cryptocurrency services. The nature and breadth of the services and products may also affect the level of transparency, traceability, and compliance of the transactions.
The geographic locations where the institution does business. This involves assessing the jurisdictions where the bank operates, where its customers reside, where its counterparties are located, and where the funds flow. For example, a bank should consider whether it has branches, subsidiaries, or affiliates in high-risk countries, whether it serves customers from high-risk countries, whether it engages in cross-border transactions, and whether it complies with the local laws and regulations of the countries where it does business. The geographic locations where the institution does business may also influence the level of exposure to political, legal, regulatory, or reputational risks.
References:
1: ACAMS Study Guide, Chapter 2: Risk Assessments, 1
NEW QUESTION # 346
Which three should real estate agents include in the criteria to assess their company's potential money laundering and terrorist financing risks when implementing a reasonable risk-based approach?
- A. Geographic Risk
- B. Transaction Risk
- C. Credit Risk
- D. Customer Risk
Answer: A,B,D
Explanation:
According to the Wolfsberg Principles on Correspondent Banking1, an institution should consider the following three elements in its enhanced due diligence process for higher risk respondent bank customers:
* The quality of the respondent's AML and client identification controls: The correspondent should assess the adequacy and effectiveness of the respondent's AML policies, procedures, and systems, as well as its compliance with applicable AML laws and regulations. The correspondent should also verify that the respondent has implemented appropriate customer identification and verification measures, and that it maintains sufficient records of its customers and transactions.
* A risk-based determination as to whether or not the respondent is a shell bank: The correspondent should ensure that the respondent is not a shell bank, which is defined as a bank that has no physical presence in any country and is not affiliated with a regulated financial group. The correspondent should also avoid establishing or maintaining relationships with banks that are known to allow their accounts to be used by shell banks.
* Whether a Politically Exposed Person (PEP) has an interest or management role in the respondent: The correspondent should identify and assess the potential risks associated with any PEPs who have an ownership or management interest in the respondent, or who are customers of the respondent. The correspondent should apply enhanced scrutiny and monitoring to such relationships, and obtain senior management approval before establishing or continuing them.
References:
* Wolfsberg Correspondent Banking Principles 2022 by the Wolfsberg Group, October 2022.
Reference: http://www.fatf-gafi.org/media/fatf/documents/reports/RBA%20Guidance%20for%20Real%
20Estate%20Agents.pdf (page 20, second paragraph)
NEW QUESTION # 347
A bank employee recently opened an account for a new restaurant. Daily cash deposits over a three-month period are close to $9,500.
What are two red flags that indicate possible money laundering or terrorist financing? (Choose two.)
- A. The new account demonstrates a steady flow of income
- B. The restaurant is located in a different city
- C. The daily cash deposits are so close in amount
- D. It is a new account that has daily cash deposits
Answer: A,C
Explanation:
These two options are potential red flags for money laundering or terrorist financing because they could indicate an attempt to avoid the reporting threshold of $10,000 for cash transactions, or to conceal the source or origin of the funds. According to the ACAMS Study Guide, some common indicators of money laundering are:
Transactions structured to avoid recordkeeping or reporting requirements Transactions inconsistent with the customer's profile or business activity Transactions involving the use of multiple accounts or locations Transactions involving high-risk jurisdictions or entities Transactions involving cash or complex crypto assets The other two options are not necessarily red flags by themselves, as they could have legitimate explanations. For example, the restaurant could be located in a different city because of market demand, or the new account could demonstrate a steady flow of income because of the success of the business.
Reference:
ACAMS Study Guide for the CAMS Certification Examination - 6th Edition, Chapter 2, page 41-42 FFIEC BSA/AML Appendices - Appendix F - Money Laundering and Terrorist Financing Red Flags, page 1-2
4 Red Flags of Money Laundering or Terrorist Financing, page 1
Money Laundering Red Flags | Key Behaviours and Indicators, page 1
NEW QUESTION # 348
Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.)
- A. Every country should share all their information with foreign law enforcement and government authorities to facilitate rapid investigations.
- B. Law enforcement and other authorities should have access to financial information that is pertinent to the investigation.
- C. Law enforcement and other authorities should not expedite information sharing between countries to ensure that all information is provided at the same time to avoid premature conclusions.
- D. Law enforcement and other authorities should be allowed to establish and utilize joint investigative teams with law enforcement in other countries.
Answer: B,D
NEW QUESTION # 349
What are three elements of a sound Customer Due Diligence Program?
- A. Determination of what type of customer the financial institution will accept
- B. Training as to how and to what extent to identify prospective customers
- C. Obtaining date of birth and address of a prospective customer
- D. Determination of who in the institution should be assigned to the prospective customer as aliaison
Answer: A,B,C
NEW QUESTION # 350
A law enforcement agency is reviewing a suspicious transaction report (STR) filed by a financial institution for suspicious activity on a client's account.
Subsequently, the agency requests further information.
Which supporting documentation might the law enforcement agency request from the institution to facilitate its investigation?
- A. Account opening documents and account statements
- B. Copies of promotional materials sent to the customer
- C. A copy of the institution's STR policy and procedures
- D. Previously filed STRs on the same customer
Answer: A
Explanation:
account opening documents and account statements are examples of supporting documentation that can help the law enforcement agency to verify the identity, profile, and activity of the customer involved in the suspicious transaction. These documents can provide useful information such as the customer's name, address, date of birth, identification number, occupation, source of funds, transaction history, and beneficiaries. These documents can also help to establish the baseline of normal and expected activity for the customer, and to identify any deviations or anomalies that may indicate money laundering, fraud, or other criminal activities.
Suspicious Activity Report Supporting Documentation, section "What Constitutes Supporting Documentation", paragraph 2: "Supporting documentation may include, for example, transaction records, new account information, tape recordings, e-mail messages, and correspondence." Documentation Requirements: Suspicious Activity Report Supporting Documentation, section "SARs Documentation Requirements", paragraph 2: "Keep all documents with evidence of the background, the purpose of the transactions, the trigger, the investigation carried out, and all findings and conclusions." BSA/AML Manual, section "Assessing the BSA/AML Compliance Program - BSA Compliance Officer", paragraph 3: "The BSA compliance officer is responsible for ensuring that the bank's BSA/AML compliance program is implemented effectively, including timely updates in response to changes in regulations or business activities, and for managing all aspects of the BSA/AML compliance program. The BSA compliance officer is also responsible for ensuring that the bank's BSA/AML compliance program is communicated to all personnel and that adequate training is provided to appropriate personnel."
NEW QUESTION # 351
What is a method of placement that can be used by a money launderer in a deposit taking institution?
- A. Sending a large number of funds transfers between accounts
- B. Depositing cashier's checks and money orders into the money launderer's account
- C. Depositing cash into the money launderer's account
- D. Withdrawing large amounts of cash from the money launderer's account
Answer: C
Explanation:
According to the ACAMS CAMS Study Guide, one of the most common methods of placement is to deposit cash into a bank account, either directly or through intermediaries. This allows the money launderer to introduce the illicit funds into the legitimate financial system, and to create a paper trail that can be used to justify the source of the funds. However, this method also exposes the money launderer to the risk of detection by the bank's anti-money laundering (AML) policies and procedures, such as customer identification, transaction monitoring, and reporting of suspicious activities1.
ACAMS CAMS Study Guide, 6th Edition, page 271
Reference: https://www.investopedia.com/terms/m/moneylaundering.asp
NEW QUESTION # 352
What should a bank focus on to ensure on-going compliance with its AML program?
- A. It should subject all new employees to criminal background checks before being hired
- B. It should ensure that it develops and provides on-going targeted training of all current and new employees
- C. It should review and update its transaction monitoring system
- D. It should ensure that the regulators have reviewed and have approved the bank's AML program
Answer: B
NEW QUESTION # 353
A bank inthe Netherlandshas been requested to share information about aseries of transactions and related customerswith abank in Italy. Both banks are subject toEuropean Union jurisdiction.
Which factor is the most important to consider before the Dutch bank shares the requested information with the Italian bank?
- A. The need tofight financial crime outweighsthe EU'sdata protection and privacy regulations.
- B. The Dutch bank should require aproduction orderfrom the Italian bank and receive approval from itslegal departmentbefore sharing the requested information.
- C. The Dutch bank shouldlimit any information sharingto what isnecessary, reasonable, and proportionate, in line with applicable laws and regulations.
- D. The Dutch bank'slegal obligations to protect customer privacyandbank secrecyprohibit it from sharing any such information.
Answer: C
Explanation:
Banks within theEUmust comply withAML laws and data privacy regulationsbefore sharing customer data.
* Option D (Correct):Information sharing should belimited to what is necessary and proportionate, followingGDPR and AMLDregulations.
* Option A (Incorrect):AML laws allowinformation-sharing in certaincross-border investigations.
* Option B (Incorrect):Whilelegal review is necessary, aproduction order is not always requiredforAML- related information sharing.
* Option C (Incorrect):Data protection laws (e.g., GDPR) must still be respected, even in financial crime investigations.
Reference:EU General Data Protection Regulation (GDPR), 6th Anti-Money Laundering Directive (6AMLD), FATF Recommendation 40 (International Cooperation).
NEW QUESTION # 354
Which of the following statements best describes the financial crime risk associated with gatekeepers?
- A. Gatekeepers have unique relationship structures, making it difficult to determine beneficial ownership
- B. Gatekeepers have specialized knowledge that can be abused to facilitate the movement of illicit funds and conceal the Involvement of their clients in illicit schemes.
- C. Gatekeeper positions ate of a secretive nature, often making it difficult to verify (heir source of wealth.
- D. Gatekeepers are entrusted with prominent functions and code of conduct that can assist laundering Illicit funds.
Answer: B
NEW QUESTION # 355
When considering sharing information across the institution or within the same jurisdiction, what is the key legal issue that poses challenges to sharing customer-related information?
- A. Conflicting AML regulations
- B. Data protection and privacy laws
- C. Consumer protection laws
- D. Technological inconsistencies and challenges
Answer: B
Explanation:
When considering sharing information across the institution or within the same jurisdiction, the key legal issue that poses challenges to sharing customer-related information is data protection and privacy laws. Data protection and privacy laws exist in most countries and can vary significantly from jurisdiction to jurisdiction. These laws place restrictions on how customer data can be used, shared, and stored, and can limit the ability of financial institutions to share customer-related information with each other. Additionally, these laws may also require financial institutions to take additional steps to ensure the protection of customer data.
NEW QUESTION # 356
Which two individuals are ordinarily beneficial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)
- A. Those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence
- B. Those two are authorized signers on the account
- C. Those who have legal title to a controlling share interest in the customer
- D. Those who generally have ultimate control through ownership or other means over the funds in the account
Answer: A,D
Explanation:
According to the Wolfsberg Anti-Money Laundering Principles for Private Banking, the beneficial owners of a private banking account are those who generally have ultimate control over the funds in the account and those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence1. These two criteria are meant to ensure that the bank knows who is ultimately behind the account and where the funds come from, in order to prevent the use of the bank for money laundering or other criminal purposes. Authorized signers on the account or those who have legal title to a controlling share interest in the customer are not necessarily the beneficial owners, as they may act on behalf of others or have limited influence over the account.
References: 1: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012), Section 1.3.1 and
1.3.2, 1
Reference: https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/wolfsberg-standards/10.%
20Wolfsberg-Private-Banking-Prinicples-May-2012.pdf (2)
NEW QUESTION # 357
A close relative of a privately-owned bank's senior manager requests to open an account. Because of this relationship, the staff expedites the opening of the account without following established account-opening procedures. Applying the Basel Committee on Banking Supervision principles, which of the following poses the highest operational risk?
- A. Not having appropriate information to share with Financial Intelligence Units.
- B. The bank's exposure to politically exposed persons.
- C. The possibility of lawsuits that adversely affect the operations of a bank.
- D. Failure to conduct proper due diligence.
Answer: A
NEW QUESTION # 358
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. Revoke the banking licenses of non-US FIs in countries outside the US.
- C. Allow all US regulators to place a non-US Fl on the Specially Designated Nationals and Blocked Persons List.
- D. Subpoena documents from FIs that have no presence in the US.
Answer: D
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 # 359
In 2004, Consolidated KYC Risk Management was issued by the Basel Committee on Banking Supervision (BCBS). What is a key message in this document?
- A. Consolidated KYC risk management for a group is critical and trumps jurisdictional rules hat limitinformation sharing
- B. KYC Risk Management means as established decentralized process for promulgating policies andprocedures
- C. KYC Risk Management required a yearly consolidation effort
- D. Policies and procedures should be designed not merely to comply strictly with all relevant lawsand regulations
Answer: A
NEW QUESTION # 360
A bank in an offshore jurisdiction approaches an institution about opening a new correspondent banking relationship. Prior to opening the account, the new account representative obtains copies of the offshore bank's anti-money laundering policies and procedures, and all appropriate legal documentation for the bank; ascertains no third parties will be able to access the accounts; and determines the owners of the bank, the bank's primary business activities, and the business address of the bank. Which of the following steps does the Basel Committee on Banking Supervision's Customer Due Diligence for Banks Paper recommend the banker take prior to opening Oils correspondent account?
1. Conduct a site visit and meet all the principals and beneficial owners in person.
2. Verify the bank has a physical presence in the country where it is incorporated.
3. Confirm the bank is subject to regulatory supervision with adequate anti-money laundering laws.
4. Obtain and maintain a complete listing of the correspondent bank's customers, including politically exposed persons.
- A. 1 and 4 only
- B. 2 and 3 only
- C. 3 and 4 only
- D. 1 and 2 only
Answer: B
Explanation:
The Basel Committee on Banking Supervision's Customer Due Diligence for Banks Paper recommends that banks should verify the bank has a physical presence in the country where it is incorporated and confirm the bank is subject to regulatory supervision with adequate anti-money laundering laws before opening a correspondent account. These steps are intended to prevent the establishment of relationships with shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. Shell banks pose a high risk of money laundering and terrorist financing, as they can be used to hide the identity and source of funds, evade regulatory oversight, and facilitate illicit transactions.
Therefore, banks should conduct enhanced due diligence on correspondent banks that operate in offshore jurisdictions, where the regulatory standards and transparency may be lower or insufficient.
ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 4, Section 4.3.1, p. 1091 ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 2, Task 2.2, p. 52 Basel Committee on Banking Supervision, Customer Due Diligence for Banks, October 2001, p. 13-143
NEW QUESTION # 361
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The CAMS certification exam is an essential qualification for professionals working in the AML and financial crime prevention field. It demonstrates a deep understanding of AML regulations and best practices and enhances credibility and career prospects. ACAMS provides a range of resources to help professionals prepare for the exam and maintain certification, making it a valuable investment for anyone in the industry.
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