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About CAMS Designation
The CAMS certification is well-known around the globe for being the gold standard among Anti-Money Laundering validations which outlines the main aspects of money laundering and its prevention. What is more, such a certificate helps in encouraging a culture of compliance in organizations and demonstrating one's dedication to a structured risk-based approach. It also helps in meeting accepter anti-money laundering training requirements while rewarding and retaining top performers. Finally, the certification also aids in successfully safeguarding against financial damage.
NEW QUESTION # 369
What is one of the indicia of a Black Market Peso Exchange?
- A. A transfer of U.S. dollars to Central or Sourth America to be converted into pesos
- B. A large deposit of pesos converted into U.S. dollars
- C. An illegal entity that exchanges pesos for U.S. dollard for illegal immigrants
- D. A wire transfer from a third party not connected with a transaction
Answer: D
NEW QUESTION # 370
Which of the following customer activities poses the highest risk of money laundering?
- A. Paying a supplier of precious metals at regular quarterly intervals.
- B. Conducting business in a country that represents a high risk of money laundering.
- C. Transferring funds to pay for flight training lessons.
- D. Making multiple cash deposits slightly below a required reporting limit.
Answer: D
Explanation:
The customer activity that poses the highest risk of money laundering is making multiple cash deposits slightly below a required reporting limit. This could indicate a practice known as structuring or smurfing, which is a method of breaking down large amounts of cash into smaller transactions to avoid detection or reporting by financial institutions12. Structuring is a common technique used by money launderers to conceal the source, ownership, or destination of illicit funds3.
The other options are not necessarily indicative of money laundering, although they may require further due diligence or monitoring depending on the customer profile and the nature of the transaction. For example:
* Transferring funds to pay for flight training lessons could be a legitimate educational expense, or it could be related to terrorist financing or other criminal activities. The financial institution should verify the identity and background of the customer and the recipient, and check for any red flags or suspicious indicators4.
* Paying a supplier of precious metals at regular quarterly intervals could be a normal business practice, or it could be a way of moving or storing value in an alternative asset class. The financial institution should assess the customer's source of funds, business rationale, and market conditions, and monitor for any changes or inconsistencies.
* Conducting business in a country that represents a high risk of money laundering could be a legitimate commercial opportunity, or it could be a sign of involvement in illicit activities or tax evasion. The financial institution should apply enhanced due diligence measures, such as verifying the identity and reputation of the customer and the counterparties, obtaining information on the purpose and nature of the business relationship, and screening for any sanctions or adverse media.
References:
* ACAMS CAMS Certification Video Training Course - Exam-Labs3
* Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)4
* ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 2, page 29:
https://www.acams.org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-2.pdf
* ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 6, page 121:
https://www.acams.org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-6.pdf
* ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 7, page 139:
https://www.acams.org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-7.pdf
* ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 4, page 77:
https://www.acams.org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-4.pdf
NEW QUESTION # 371
A new compliance officer is reviewing the bank's anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another financial institution, re-named the internal records group, and streamlined cash handling procedures.
Which factor causes the compliance officer to update the bank's risk assessment?
- A. The cash handling procedures were streamlined
- B. The bank acquired another institution
- C. The risk assessment was completed six months ago
- D. The internal records group has been re-named
Answer: B
NEW QUESTION # 372
While all employees need AML awareness training, which three groups within the institution should receive targeted AML training? Choose 3 answers
- A. The AML officer and the compliance staff
- B. Employees who have contact with customers or transactions
- C. Senior Management and the human resources staff
- D. The Board of Directors and Senior Management
Answer: A,B,C
NEW QUESTION # 373
Typical events to identify and investigate potential AML activities include: (Select Three.)
- A. internal tips from employees of the bank about potential suspicious activity.
- B. accounts going to dormant status.
- C. alerts triggered by the automated AML monitoring system.
- D. blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List.
- E. requests from law enforcement agencies.
- F. subpoenas requesting information for civil cases.
Answer: A,C,D
Explanation:
Explanation
Typical events to identify and investigate potential AML activities include: A) blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List; B) internal tips from employees of the bank about potential suspicious activity; and C) alerts triggered by the automated AML monitoring system [1]. Blocked transactions are those which involve individuals included on the Specially Designated Nationals and Blocked Persons List - this is a list maintained by the Office of Foreign Assets Control of individuals who are subject to economic or trade sanctions [1], or who may be involved in money laundering or terrorist activities [2]. Internal tips are those which are provided by employees of the bank who may have observed suspicious activity, or have reason to believe that certain transactions or activities may be related to potential money laundering. Alerts triggered by the automated AML monitoring system are those which are generated by the banks systems and processes which are designed to detect potential money laundering.
NEW QUESTION # 374
Which should be provided to the board of directors or designated specialized committee when reporting SARs
/STRs?
- A. All possible details of SARs/STRs filed during the reported period.
- B. Statistical data regarding SARs/STRs filed during the reported period.
- C. Copies of all SARs/STRs filed during the reported period.
- D. Names of all customers subject to SARs/STRs filed during the reported period.
Answer: B
Explanation:
The board of directors or designated specialized committee should be provided with statistical data regarding SARs/STRs filed during the reported period, such as the number, type, value, and geographic distribution of the reports, as well as any trends or patterns identified. This information helps the board or committee to oversee the effectiveness of the firm's AML program, assess the level of compliance risk, and allocate appropriate resources and training. Providing all possible details, names of customers, or copies of SARs
/STRs may compromise the confidentiality of the reports, violate data protection laws, or expose the firm to legal liability.
References:
* ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (6th Edition), Chapter 5, Section 5.3.2, page 223.
* The Role of the Money Laundering Reporting Officer - ICAEW, page 14.
Reference: https://www.fia.tc/wp-content/uploads/2018/04/FIA-SARGUIDE-0515-1.0.pdf
NEW QUESTION # 375
In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?
- A. Driving while under the influence
- B. Kidnapping
- C. Protests of government action
- D. Offenses involving dishonesty
Answer: D
Explanation:
Reference:http://www.capitol.hawaii.gov/hrscurrent/vol07_ch0346-0398/HRS0378/HRS_03780003.htm(See 9th point)
NEW QUESTION # 376
What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers
- A. Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering
- B. A large number of predicate crimes for money laundering
- C. Limited types of institutions and persons covered by money laundering laws and regulations
- D. Absence of an effective FIU
Answer: A,C,D
Explanation:
Havens for money laundering and terrorist financing are jurisdictions that offer a high degree of anonymity, secrecy, and protection to criminals who seek to conceal or move their illicit funds. These havens typically have the following three attributes12:
* Limited types of institutions and persons covered by money laundering laws and regulations. This means that only a narrow range of financial activities or entities are subject to anti-money laundering (AML) and combatting the financing of terrorism (CFT) obligations, such as customer due diligence,
* record-keeping, reporting, and supervision. For example, some havens may exclude lawyers, accountants, trust and company service providers, or non-bank financial institutions from AML/CFT requirements.
* Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering. This means that the authorities in these havens lack the political will, resources, or capacity to effectively implement and enforce the AML/CFT laws and regulations. They may also impose low sanctions or fines for non-compliance, or create legal barriers or obstacles for the confiscation or freezing of assets that are the proceeds of, or used in, or intended or allocated for use in, money laundering, terrorist financing, or other crimes.
* Absence of an effective FIU. This means that these havens do not have a central agency that is responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering, terrorist financing, and other crimes. An effective FIU is essential for facilitating domestic and international cooperation and information exchange, as well as for supporting investigations and prosecutions of money laundering and terrorist financing cases.
References:
1: The IMF and the Fight Against Money Laundering and Terrorism Financing, 1 2: IX Special Recommendations, 2
NEW QUESTION # 377
Which statement identifies one of the duties of a government Financial Intelligence Unit?
- A. It administers and enforces economic and trade sanctions based on a government's foreign policy and national security goals.
- B. It prosecutes suspected money launderers and terrorist financiers based on financial institution suspicious transaction report filings.
- C. It serves as the central agency for the receipt of disclosures filed by reporting entities.
- D. It supervises and regulates banking institutions to ensure the safety and soundness of the nation's banking and financial system.
Answer: B
Explanation:
Explanation/Reference: http://fiu.gov.dm/about-us/functions-and-responsibilities
NEW QUESTION # 378
A bank account is established for a new business customer. The business was established five years ago with an address in another state. The business website contains few details other than stating it is a real estate business.
One principal has an international telephone number and appears to be living in another country. The other principal works out of a recreational vehicle.
What warrants enhanced due diligence in this scenario?
- A. Human trafficker
- B. Shell company
- C. Politically exposed person
- D. Money laundering through real estate
Answer: D
Explanation:
Money laundering through real estate is a common method of disguising the source and ownership of illicit funds. Real estate transactions often involve large amounts of money, complex legal structures, and cross-border transfers, which can obscure the true nature and origin of the funds. The new business customer in this scenario raises several red flags that warrant enhanced due diligence, such as:
* The business was established five years ago but has a vague website and no physical presence in the state where it is registered.
* One of the principals has an international phone number and lives abroad, which could indicate a foreign shell company or a politically exposed person.
* The other principal works out of a recreational vehicle, which could suggest a lack of legitimate business activity or income.
* The business claims to be a real estate business, but does not provide any details about its projects,
* clients, or partners.
These factors suggest that the business may be involved in money laundering through real estate, either by purchasing properties with illicit funds, using properties to generate illegal income, or selling properties to launder money. Therefore, the financial institution should conduct enhanced due diligence to verify the identity, background, and source of funds of the business and its principals, as well as the purpose and nature of the account relationship.
References:
* ACAMS Study Guide for the CAMS Certification Examination - 6th Edition, Chapter 2: Money Laundering Risks and Methods, pp. 46-47
* Enhanced Due Diligence in Construction and Real Estate, by James Swenson, Ethixbase 360
* Due Diligence & Legal Considerations in Commercial Real Estate, by Justia
NEW QUESTION # 379
How should a compliance officer respond to law enforcement agencies' request for information on a customer undergoing an investigation?
- A. Collaborate with the financial institution's (FI's) designated department to determine the appropriate course of action to comply with the request.
- B. Gather all requested documentation and send via secure email to the requesting authority.
- C. Freeze account assets and advise the customer that assets will not be released until the investigation has been completed
- D. Share details of the investigation with respective colleagues who deal with this customer type on a daily basis.
Answer: A
Explanation:
A compliance officer should cooperate with the law enforcement inquiry as much as possible, but also ensure that the request is valid, lawful, and does not violate any confidentiality or privacy obligations. Therefore, the compliance officer should collaborate with the FI's designated department, such as the legal counsel, the senior management, or the board of directors, to determine the appropriate course of action to comply with the request12. The compliance officer should also ensure that all communication, written and oral, is funneled through a centralized place, and that the FI maintains a record of the request and the response12.
References:
1: Requests by Law Enforcement for Financial Institutions to Maintain Accounts, FinCEN, 2014
2: Best Practices for Compliance and Enforcement-Related Information Requests, EPA, 2018 Reference: https://www.acams.org/en/resources/aml-glossary-of-terms
NEW QUESTION # 380
What is an aspect of the USA PATRIOT Act that has extraterritorial reach?
- A. To require scrutiny of foreign financial institutions (FIs) and classes of international transactions that are susceptible to criminal abuse.
- B. To implement economic and trade sanctions based on US foreign policy.
- C. To mandate stricter money laundering controls across the continent.
- D. To strengthen US measures to prevent, detect and prosecute international money laundering and financing of terrorism.
Answer: D
NEW QUESTION # 381
Which three statements are true about on-line banking offering a significant money laundering risk to a financial institution?
- A. The ease of access through the internet enables cross border movement of funds
- B. The speed of electronic transaction enables execution of multiple complex transactions within short time frame
- C. Due to client confidentiality, information collected on-line cannot be shared with law enforcement agencies on mere suspicion
- D. The nature of on-line banking can make it difficult to establish who is controlling the account
Answer: A,B,D
Explanation:
On-line banking offers a significant money laundering risk to a financial institution because:
* The nature of on-line banking can make it difficult to establish who is controlling the account. On-line banking allows customers to access their accounts remotely, without face-to-face contact with the financial institution. This can pose challenges for verifying the identity and legitimacy of the account holder, especially if the account is opened on-line or through a third-party intermediary. On-line banking can also facilitate the use of anonymous or fictitious identities, or the use of proxies or nominees to hide the true beneficial owner of the account.
* The ease of access through the internet enables cross border movement of funds. On-line banking allows customers to transfer funds quickly and easily across different jurisdictions, without physical movement of cash or other instruments. This can increase the risk of money laundering, as funds can be moved to or from high-risk countries or regions, or through multiple accounts or financial institutions, to obscure the origin, destination, or purpose of the funds. On-line banking can also enable customers to access or use alternative payment systems or virtual currencies, which may have lower regulatory oversight or transparency standards than traditional banking systems.
* The speed of electronic transaction enables execution of multiple complex transactions within short time frame. On-line banking allows customers to conduct transactions in real time, with minimal or no human intervention or verification. This can increase the risk of money laundering, as customers can execute multiple transactions in a short period of time, or use complex transaction structures or patterns, to avoid detection or reporting thresholds, or to conceal the source, nature, or ownership of the funds.
On-line banking can also enable customers to use automated or algorithmic trading systems, which may generate large volumes of transactions that are difficult to monitor or analyze.
References:
* CAMS Study Guide - 6th Edition, Chapter 5, pages 139-140
* CAMS Certification Exam Outline, Domain 2, Task 2.1, Skill 2.1.1
* Online Banking and Money Laundering, ACAMS Today, September 2012
NEW QUESTION # 382
Which method is indicative of potential money laundering and terrorist financing activity?
- A. An unknown client pays $1,000 in cash for an urgent transfer to a high risk country
- B. A commercial client in the export business regularly receives wire transfers from high risk countries
- C. Client converts 500 Euro in mixed denomination notes to small denomination U.S. bills in a single transaction
- D. An unknown client purchases multiple monetary instruments for one person during the course of one day
Answer: A
Explanation:
This method is indicative of potential money laundering and terrorist financing activity because it involves several red flags, such as:
* The use of cash, which is anonymous and difficult to trace
* The urgency of the transfer, which may suggest a need to move funds quickly before they are detected
* The destination of the transfer, which may be a high risk country with weak anti-money laundering (AML) and counter-terrorism financing (CTF) controls or sanctions
* The lack of information about the client and the beneficiary, which may indicate a lack of due diligence or customer identification These factors may indicate that the client is trying to conceal the source, ownership, or purpose of the funds, or that the funds are related to illicit activities such as money laundering or terrorist financing.
References:
* ACAMS CAMS Certification Video Training Course1, Module 2: Money Laundering Risks and Methods, Lesson 2.2: Money Laundering Methods
* ACAMS CAMS Study Guide, 6th Edition2, Chapter 2: Money Laundering Risks and Methods, Section
2.2: Money Laundering Methods, pp. 35-36
* ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 2: Money Laundering Risks and Methods, Section 2.2: Money Laundering Methods, Slide 14
NEW QUESTION # 383
Under the Wolfsburg AML Principles on Private Banking when establishing a relationship with a trust a financial institution should perform due diligence on which three parties? Choose 3 answers
- A. Those entitled to the funds (e.g., beneficiaries)
- B. Those who have the power to appoint or remove trustees
- C. The provider of funds (e.g., settlor)
- D. Those who have power over the funds (e.g., trustees)
Answer: B,C,D
NEW QUESTION # 384
Which is true about Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?
- A. Tools used by FRSBs include training measures and mutual evaluations of its members.
- B. AFATF-member country cannot also be a member of an FSRB.
- C. FSRBs set standards for their member countries that supplement FATF's standards.
- D. To be a member of an FSRB, a country must have enacted AML and Anti-Terrorist Financing laws.
Answer: A
Explanation:
Explanation
FSRBs are regional bodies that work with FATF to promote the implementation of AML and CFT standards.
FSRBs are made up of member countries that have agreed to work together to combat money laundering and the financing of terrorism [1]. The tools used by FSRBs to promote the implementation of AML and CFT standards include training measures, mutual evaluations of its members, technical assistance, and the sharing of information. FSRBs may also adopt recommendations and best practices based on the FATF's 40 Recommendations.
NEW QUESTION # 385
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