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The CAMS exam is administered by the Association of Certified Anti-Money Laundering Specialists (ACAMS), a professional organization dedicated to promoting the fight against financial crime. CAMS exam consists of multiple-choice questions covering four main areas: AML regulations and compliance, money laundering methods and techniques, conducting AML investigations, and managing AML risks. Candidates must achieve a passing score of 75% or higher to earn the CAMS certification.
NEW QUESTION # 111
An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.
What is primary consideration the institution should keep in mind when deciding whether to agree to this request?
- A. The anticipated cost of complying with the law enforcement request
- B. Whether the institution can continue to meet its regulatory obligations with the accounts open
- C. The fact that the institution has a solid record in complying with law enforcement requests
- D. The number of suspicious transaction reports previously filed on the client
Answer: B
NEW QUESTION # 112
Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is popular in the community and is a wellknown philanthropist.
To whom should the investigator escalate these concerns?
- A. The owner of the auto repair shop
- B. Chairman of the Board
- C. The bank anti-money laundering officer
- D. Audit committee
Answer: D
NEW QUESTION # 113
Which statement is true about when an institute becomes aware that a particular employee is under investigation by law enforcement as a result of a subpoena or warrant?
- A. Under no circumstances can the employee be interviewed by the institution without the consent of law enforcement for fear of tipping the employee off
- B. The institute has a duty as an employer to inform the employee he or she is under investigation by law enforcement, buy must not inform them that a warrant or subpoena has been received
- C. The employee can and should be interviewed, as well as notified of the investigation to demonstrate the seriousness of the offence and to get the employee's full attention and cooperation
- D. If an independent investigation provides grounds to interview the employee, they can be interviewed and, if necessary, terminated buy not advised that they are under investigation
Answer: C
NEW QUESTION # 114
A bank sells reloadable open-loop prepaid cards to both customers and non-customers.
What is a red flag associated with these cards that may indicate money laundering?
- A. A bank customer historically purchases several prepaid cards near year-end.
- B. A non-bank customer consistently uses the bank to obtain cash advances using a prepaid card.
- C. A non-bank customer regularly loads large amounts of cash onto several prepaid cards.
- D. A bank customer routinely purchases five prepaid cards in small even-dollar amounts on a monthly basis.
Answer: C
Explanation:
According to the CAMS Study Guide, page 191, "Reloadable open-loop prepaid cards are a high-risk product for money laundering because they can be used to store and move large amounts of funds anonymously. They can also be used to access cash at ATMs or through cash-back transactions at merchants." Therefore, option B is a red flag that may indicate money laundering, as a non-bank customer who regularly loads large amounts of cash onto several prepaid cards may be trying to avoid identification, verification, or transaction reporting requirements.
References:
CAMS Study Guide, page 1911
NEW QUESTION # 115
A precious metals dealer opens a new account with a bank. Which requires a referral to AML Investigations for further review?
- A. Payments received on the account reference unknown companies in the instructions.
- B. International incoming payments from foreign companies in which the precious metals dealer has an established relationship.
- C. International outgoing wires to diamond dealers that are part of the diamond pipeline.
- D. Multiple daily point of sale transactions from third parties that appear to be individuals.
Answer: A
NEW QUESTION # 116
What is the intentional evasion of a reporting or recordkeeping requirement?
- A. Layering
- B. Placement
- C. Money laundering
- D. Structuring
Answer: C
NEW QUESTION # 117
Which activities conducted by a lawyer could be a red flag for money laundering? (Select Two.)
- A. The lawyer spent two days working a case.
- B. The lawyer worked unusual hours to perform case duties.
- C. The lawyer does not document case notes for the services provided.
- D. The lawyer was paid substantially higher than usual fees.
- E. The lawyer does not have experience in providing the particular services requested.
Answer: D,E
Explanation:
Lawyers who lack experience in providing specific services requested by clients or receive unusually high fees can raise red flags for money laundering. Inadequate documentation of case notes may also be suspicious, but the absence of experience and excessive fees are more significant indicators. These behaviors warrant further scrutiny to assess potential money laundering risks12.
References:
1. ComplyAdvantage: AML Red Flags - What are the Top 10 Indicators?
2. HyperVerge: AML Red Flags: A Guide to Identification and Response
NEW QUESTION # 118
Findings from a regulatory examination report states that the job descriptions of personnel outside of the compliance department do not include references to anti-money laundering responsibilities.
Which action should the firm take?
- A. Send an email to all staff stating that personnel must observe the anti-money laundering policy
- B. Update all job descriptions to include anti-money laundering responsibilities
- C. Reply that a description of anti-money laundering responsibilities is included in the annual training
- D. Respond that only compliance personnel have anti-money laundering responsibilities
Answer: C
NEW QUESTION # 119
Which key aspect of the Office of Foreign Assets Control's extraterritorial reach specifically relates to prohibited transactions?
- A. Prohibit or reject licensed trade and financial transactions with specified countries, entities and U.S.
individuals - B. individuals
- C. Prohibit or reject licensed trade and financial transactions with specified countries, entities and non-U.
- D. Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals
- E. Prohibit or reject unlicensed foreign trade and financial transactions with specified countries, entities, and individuals.
Answer: D
Explanation:
the Office of Foreign Assets Control (OFAC) has the authority to prohibit or reject any trade or financial transactions involving specified countries, entities, and individuals that are subject to U.S. economic sanctions, unless such transactions are authorized by a general or specific license issued by OFAC. This applies to transactions that occur within the U.S. territory, as well as transactions that involve U.S. persons, U.
S. goods, or the U.S. financial system, regardless of where they take place. This is one of the key aspects of OFAC's extraterritorial reach, which means that OFAC can enforce its sanctions programs beyond the U.S.
borders.
References:
* Home | Office of Foreign Assets Control, section "Mission": "The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States."
* The Aggressive Extraterritorial Reach of U.S. Economic Sanctions: Foreign Company Exposure to OFAC Enforcement, section "A. Bases for OFAC jurisdiction over foreign parties", paragraph 1: "One key aspect of the Office of Foreign Assets Control's extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity."
* The global reach of OFAC sanctions, section "The global reach of OFAC sanctions", paragraph 1:
"OFAC sanctions are trade and economic sanctions administered by The U.S. Treasury Department's Office of Foreign Asset Control (OFAC). They are often intended to have extra-territorial effect, meaning that they apply outside the U.S. territory. In some instances a connection with the U.S.
territory is required."
"Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals. "
NEW QUESTION # 120
A banker in the credit department wants to assess the risk of all customers, and contacts the compliance officer to request a list of customers with suspicious transaction report filings.
What should be done to protect suspicious transaction report information?
- A. Contact the credit department manager to determine how the suspicious transaction report information can be provided
- B. Seek approval from the board of directors to disclose the suspicious transaction report information
- C. Decline to provide the suspicious transaction report information to the credit department
- D. Provide the suspicious transaction report information to the credit department
Answer: B
NEW QUESTION # 121
The bank's internal financial intelligence unit (FIU) has reviewed activity related to a politically exposed person (PEP); the activity in the account contains a large, round number, one time wire to an obscure organization. Which would not be a sufficient reason to file a SAR/STR?
- A. Beneficiary is largely unknown
- B. Customer activity is unreasonable
- C. Maintain the bank's reputation
- D. Wire is a large amount
Answer: B
NEW QUESTION # 122
Separating illicit proceeds from their source by a series of complex financial Transactions designed to disguise the audit trail and provide anonymity is an example of what?
- A. placement
- B. integration
- C. layering
- D. structuring
Answer: C
NEW QUESTION # 123
A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?
- A. Increased organized crime and corruption
- B. Loss of tax revenue
- C. Reputation risk for the port
- D. US sanctions
Answer: A
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 # 124
A compliance officer is reviewing the activity of the wire transfer department for the previous month and identifies an unusual wire transfer from a customer's account.
Which information should be included in the review of the customer's activity?
- A. Wire transfer requests initiated by phone and internet
- B. Whether the bank processes wire transfers through a correspondent bank
- C. Records of the recent deposit activity
- D. Total number of wires processed each month over the previous year
Answer: A
Explanation:
Wire transfer requests initiated by phone and internet should be included in the review of the customer's activity, as they may indicate a higher risk of fraud, identity theft, or money laundering. Phone and internet wire transfers are more vulnerable to cyberattacks, phishing, or social engineering, and may bypass some of the verification and authentication procedures that are applied to in-person or paper-based requests. Therefore, the compliance officer should monitor these requests for any signs of unusual or suspicious activity, such as changes in beneficiary, amount, frequency, or destination of the wires.
References:
ACAMS CAMS Certification Study Guide, 6th Edition, page 41
ACAMS CAMS Certification Exam Outline, 6th Edition, Domain 2, Task 2.1
ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.1
Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 325
NEW QUESTION # 125
According to the Financial Action Task Force, financial institutions should be required to implement:
- A. independent AML programs to ensure privacy and safeguard confidential information.
- B. group-wide programs, including policies and procedures regarding AML compliance.
- C. a process to designate an officer at a senior level who ensures a safe exchange of information for AML and terrorism financing purposes.
- D. special procedures for encryption of information to be exchanged with affiliates and branches.
Answer: B
Explanation:
According to the web sources I found, FATF Recommendation 18 requires financial institutions to implement group-wide programmes against money laundering and terrorist financing that include policies and procedures for sharing information within the group for AML/CFT purposes12. These programmes should also include compliance management arrangements, screening procedures for hiring employees, an independent audit function and ongoing employee training1.
NEW QUESTION # 126
A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank. Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity?
- A. Ensure the designated entity's confidential information is not shared with other entities.
- B. Obtain additional information about customers permitted to use this account.
- C. Perform enhanced due diligence on the EU bank.
- D. Verify that the EU bank serves the designated entity.
Answer: D
NEW QUESTION # 127
A company contracts a life insurance policy with a savings feature of 100,000 USD for an individual in a high-risk country. The policy receives monthly cash deposits from unknown third parties. A minimal part of the deposit is invested and the rest is withdrawn by the end of the month. Which are the circumstances to consider as a risk for money laundering? (Select Two.)
- A. A company established in a high-risk country contracting a policy for a domestic individual
- B. Unidentified third parties depositing cash to the policy
- C. A policy for an amount of 100,000 USD is to be considered high and suspicious
- D. A life insurance policy with a savings feature for a national from a high-risk country
- E. The regular withdrawals from the policy by the end of the month
Answer: B,E
Explanation:
According to the ACAMS CAMS Study Guide (the 6th edition), one of the common methods of money laundering in the insurance sector is to purchase policies with illicit funds, overpay premiums, and then cancel or surrender the policies to receive refunds or payouts1. This allows criminals to move and disguise the source of their funds through the insurance company. Therefore, the regular withdrawals from the policy by the end of the month could indicate a money laundering scheme. Moreover, the FATF Guidance for a Risk-Based Approach for the Life Insurance Sector states that unidentified third parties depositing cash to the policy could also pose a high money laundering risk, as cash transactions are difficult to trace and third parties may act as intermediaries or nominees for the real beneficiaries2. Therefore, the insurance company should conduct enhanced due diligence on the policyholder and the third parties, and monitor the transactions for any suspicious activity.
References:
ACAMS CAMS Study Guide (the 6th edition), Chapter 2: Money Laundering Risks and Methods, page
671
FATF Guidance for a Risk-Based Approach for the Life Insurance Sector, pages 18-192
NEW QUESTION # 128
Which three entities does the Third European Union Money Laundering Directive apply to?
- A. Financial Institutions
- B. Real Estate Agents
- C. Casinos
- D. Defense Attorneys
Answer: A,B,C
NEW QUESTION # 129
An anti-money laundering consultant audits a bank's current anti-money laundering policies, procedures and controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses. During a review of the custom list, the anti-money laundering consultant determines that he and the bank have mutual clients. The bank's written anti-money laundering program includes a process for the bank to establish the identity of the person with whom they conduct business, but does not address monitoring of customer account activity.
The consultant should recommend the bank:
- A. Focus on high-risk customer acceptance procedures.
- B. Reduce the risk rating on the mutual customers.
- C. Continue to follow the current written anti-money laundering program.
- D. Revise the procedures to better assess ongoing customer activity.
Answer: D
Explanation:
According to the ACAMS Study Guide, an effective AML program should include four key elements:
internal controls, independent testing, designated compliance officer, and training1. Internal controls are policies, procedures, and processes that help prevent, detect, and report money laundering and terrorist financing activities. One of the essential components of internal controls is customer due diligence (CDD), which involves identifying and verifying the customer, understanding the nature and purpose of the customer relationship, and conducting ongoing monitoring of customer transactions and risk profiles2. Ongoing monitoring is crucial for detecting and reporting suspicious activities, updating customer information, and reassessing customer risk ratings3.
In this case, the bank's written AML program does not address monitoring of customer account activity, which is a significant gap in its internal controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses, which are considered high-risk customers for AML purposes4. The bank should have enhanced due diligence (EDD) measures for these customers, such as obtaining additional information, conducting more frequent reviews, and applying stricter transaction limits5.
The fact that the consultant and the bank have mutual clients does not affect the risk rating or the due diligence requirements of those customers. Therefore, the consultant should recommend the bank to revise its procedures to better assess ongoing customer activity and comply with the AML standards.
References:
* 1: ACAMS Study Guide, Chapter 2: Developing an Effective Anti-Money Laundering Program
* 2: ACAMS Study Guide, Chapter 3: Conducting Customer Due Diligence
* 3: ACAMS Study Guide, Chapter 4: Ongoing Monitoring and Suspicious Activity Reporting
* 4: ACAMS Study Guide, Chapter 5: Identifying High-Risk Customers
* 5: ACAMS Study Guide, Chapter 6: Applying Enhanced Due Diligence Measures
NEW QUESTION # 130
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ACAMS CAMS (Certified Anti-Money Laundering Specialists) Certification Exam is a globally recognized certification program for professionals seeking to enhance their knowledge and skills in the field of anti-money laundering (AML) and financial crime prevention. Certified Anti-Money Laundering Specialists certification is offered by the Association of Certified Anti-Money Laundering Specialists (ACAMS), a leading international organization dedicated to the advancement of AML and financial crime prevention. The CAMS certification is highly respected in the industry and is a mark of excellence for professionals working in AML compliance.
ACAMS CAMS (Certified Anti-Money Laundering Specialists) exam is a certification exam that is designed to test the knowledge and skills of individuals involved in anti-money laundering (AML) compliance. CAMS exam covers a broad range of topics related to AML, including the legal and regulatory framework, risk assessment, customer due diligence, transaction monitoring, and reporting. It is a rigorous and challenging exam, and passing it demonstrates a high level of expertise in the field of AML.
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