Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?

Arms and related materials embargo

Which safeguard is in place for Financial Intelligence Units (FIUs) to share information securely according to Egmont?

A computer with access to the Egmont Secure Web is accessible to all members of the FIU.

Information sharing is conducted according to processes contained in Memoranda of Understanding.

Intelligence is shared via messaging applications.

Investigators are allowed to request information from a foreign FIU directly.

Which scenario should be escalated as potentially suspicious activity?

A domestic business account receives a wire transfer from an international business with no history of such activity or business needs.

A retail chain deposits cash into several operating accounts and consolidates the funds into one account.

A domestic business account receives a wire transfer from an international business with no history of such activity or business needs.

A convenience store makes daily deposits or withdrawals primarily in cash.

A corporate account deposits large checks and wire transfers on a frequent basis from existing customers.

A potential client calls a broker-dealer wishing to purchase securities. The client does not appear to be concerned with any fees associated with the account or price of the securities. Further information provided by the potential client indicates the individual may have relatives working for a company in which the potential client wants to invest. Which type of activity is the potential client attempting to commit?

Transfer funds to a third-party

What correspondent banking risk factor increases the risk for a Correspondent Bank?

Major service provider to money service businesses

Multi-national financial institution with global operations

Offers international funds transfer to customers

Major service provider to money service businesses

Limited product offering to customers in high-risk jurisdictions

When performing an investigation, which key steps should be taken to maintain and secure supporting documentation used to perform an investigation of a suspicious activity?

Maintain a record of the transaction activity that generated the alert

Disseminate the rationale for the investigative approach and the objective basis for the determination.

Perform the alerting transaction with alternative thresholds to ensure they are calibrated correctly.

Ensure that a secure archive has information available to the client.

Maintain a record of the transaction activity that generated the alert

Which actions are involved when a prosecutor instructs a bank to freeze the assets and bank accounts held by one of its clients? (Choose three.)

Ensure the client and beneficiaries are unable to access any frozen assets during the freeze order.

An affidavit must accompany the freeze order for the bank to comply with the request.

The institution should obtain a copy of the court order to freeze the assets of the named individuals.

Inform other banks in the same geographical area to freeze the client's assets if they are a member of that bank, too.

Extend the account and asset freeze to the client's family members as a precautionary measure.

Ensure the client and beneficiaries are unable to access any frozen assets during the freeze order.

The institution does not need to comply with the request if the client's assets make the task unusually difficult or complex to access.

An affidavit must accompany the freeze order for the bank to comply with the request.

The institution should obtain a copy of the court order to freeze the assets of the named individuals.

A compliance analyst is reviewing recent activity between a publicly traded company and a company in a high risk jurisdiction. Which detail suggests that escalation is warranted?

Payments to the beneficiary are for large dollar amounts.

The activity is a reputational risk to the financial institution.

It is the first time the originator wires the beneficiary.

Beneficiary is active in a related industry.

Payments to the beneficiary are for large dollar amounts.

An EU Trust and Company Service Provider (TCSP) analyst notices some unusual activity while looking through a customer's financial statements and detailed general ledger. The customer is in the business of importing and exporting machineries. Which transaction indicator warrants further escalation to the compliance officer?

The payment of consultancy fees to unrelated companies and service providers established in a foreign jurisdiction.

Inter-company loans from the holding company to the subsidiary company to finance the shipment of machinery.

The payment of virtual offices services overseas.

The payment of consultancy fees to unrelated companies and service providers established in a foreign jurisdiction.

The payment of company secretarial retainer fees to a foreign company in a tax efficient jurisdiction.

One area of responsibility for the Board of Directors when implementing a successful AML program is to:

ensure the appointment of a qualified chief AML officer.

create a culture of compliance based on the profit expectation.

manage the day-to-day processes of the compliance program.

hire a third-party firm to be responsible for the AML compliance.

An accounting firm opened an account at a bank that is intended to be used as the operational account for the business. After a few months, a comprehensive review of the account was triggered due to unusual activity on the account. Which most likely triggered the review?

The account receives international payments that are substantially higher than other fees they typically receive.

The account sends monthly donations to several charities that operate in the same communities as the accounting firm.

The account receives several payments a day from multiple customers who operate in different industries.

The account receives international wires from companies in the Middle East where the accounting firm has several branches.

Which is a key aspect in the FATF Recommendations that best describes the essential foundation for allocating resources in AML/CFT regimes for countries and financial institutions (FIs)?

Implementing targeted financial sanctions

Performing country peer-to-peer evaluations

Enforcing mutual legal assistance

Which are social/economic consequences of money laundering? (Choose two.)

Weakening financial institutions

Increase in corruption and organized crime

Weakening financial institutions

Increase in corruption and organized crime

Weakening of the country's infrastructure

One of the red flags of microstructuring is:

frequent visits to make cash deposits of nominal amounts.

depositing sequentially numbered checks.

check deposits followed by ATM withdrawals using debt card in retail store.

single activity in an account immediately following the opening of the account.

frequent visits to make cash deposits of nominal amounts.

Which are red-flag indicators of possible money laundering through online gambling? (Choose two.)

The player opens several accounts under the same name using different IP addresses.

The customer logs on to the account from multiple countries.

The player is identified as a Politically Exposed Person (PEP).

The player opens several accounts under the same name using different IP addresses.

The customer uses their credit card to fund an online gambling account.

The player deposits small amounts of funds into their online gambling account.

The customer logs on to the account from multiple countries.

Which is the main objective when a financial institution (FI) conducts an investigation?

Track the movement of the money

Keep policies and procedures updated

Track the movement of the money

Which is a FATF characteristic used to assess a country's effectiveness of its AML regime?

FIs adequately apply preventive measures.

Funds supporting and proceeding from crime or terrorism are prevented from entering the financial sector.

Legal persons are prevented from misuse for money laundering or terrorist financing.

Supervisors appropriately supervise, monitor, and regulate financial institutions (Fls).

FIs adequately apply preventive measures.

According to the Basel Committee on Banking Supervision standards, which statements best describe sound practices in relation to customer due diligence (CDD) policies and procedures? (Choose three.)

Banks should take into consideration the occasional banking transaction or the size/level of assets to build an understanding of the customer's profile and behavior.

Banks should develop and implement clear acceptance policies and procedures to identify the types of customer that are likely to pose a higher risk of financing terrorism or money laundering.

Banks should implement enhanced due diligence measures for entering business relationships with high-risk customers, such as approval by senior management.

Banks should identify its customers based on a general-rules based assessment without considering the expected size and use of the account.

Banks should never allow for verification to be completed after the establishment of the business relationship since it would not be essential for the normal conduct of business.

Banks should take into consideration the occasional banking transaction or the size/level of assets to build an understanding of the customer's profile and behavior.

Banks should develop and implement clear acceptance policies and procedures to identify the types of customer that are likely to pose a higher risk of financing terrorism or money laundering.

Banks should implement enhanced due diligence measures for entering business relationships with high-risk customers, such as approval by senior management.

Banks should use CDD procedures based in another bank's standards when subject to the same criteria for handling funds of a shared customer.

Which information should be gathered as part of enhanced due diligence (EDD) for a high-risk customer?

Details on individuals with control over the account

Explanations for changes in marital status

Details on individuals with control over the account

Plans for traveling in business trips

Which transaction should result in a SAR/STR filing?

A small business owner deposits checks totaling $9,950 USD on a daily basis without providing a legitimate purpose.

A small business owner deposits $25,000 USD in cash proceeds with a business equipment bill of sale.

A national food-chain restaurant with multiple cash transactions at various branch locations.

A national food-chain restaurant makes multiple, anticipated cash transactions that are above the daily reporting threshold.

An anti-money laundering specialist has just developed and implemented an anti-money laundering program. Which of the following is the best resource to evaluate the effectiveness of the program?

a qualified independent party/auditor

the anti-money laundering specialist

a qualified independent party/auditor

A financial institution is reorganizing and the anti-money laundering officer is now required to report to the Sales Director. Which of the following statements about this situation is most correct?

The anti-money laundering officer should be independent of business functions.

The reorganization will ensure communication of anti-money laundering issues to the board.

The reorganization will enhance the compliance framework.

The anti-money laundering officer should be elevated to a position on the Board.

The anti-money laundering officer should be independent of business functions.

A compliance officer at a small local bank reads in the newspaper that a high ranking local public official, who is a long-standing account holder, is being investigated by the competent authorities for accepting bribes from a well-known construction company with offices in the town. The compliance officer immediately checks the official's account and other recently opened accounts at the bank. The official opened a new account at the bank a few weeks ago. The compliance officer's investigation of these accounts discloses that the official's longstanding account had no unusual activity and the recently opened account had no activity since it was opened. Which of the following should the compliance officer do next?

Meet with staff who opened the account to understand its nature and purpose.

Wait until the new account receives funds and confirm their source.

Call the competent authorities to assess the need to file a suspicious transaction report.

Meet with staff who opened the account to understand its nature and purpose.

Call the official's office to confirm the need for multiple accounts.

According to the Financial Action Task Force Special Recommendations on Terrorist Financing, which of the following should an anti-money laundering specialist do if the specialist has reasonable grounds to suspect funds are linked or related to terrorist acts?

Promptly report to the competent authority.

Conduct a full due diligence review of the client.

Inform the institution's managing Board.

Contact the institution's legal advisor.

Promptly report to the competent authority.

According to the 5th EU Money Laundering Directive, member states require entities to apply enhanced customer due diligence measures with respect to business relationships or transactions involving high-risk third country nationals. Which are included in these requirements? (Choose three.)

Obtaining the approval of senior management for establishing or continuing the business relationship

Obtaining information on the reasons for intended or performed transactions

Obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner(s)

Obtaining the approval of senior management for establishing or continuing the business relationship

Obtaining copies of passports for all authorized persons

Establishing and verifying the address of the client

Obtaining information on the reasons for intended or performed transactions

Obtaining tax reference details for the client

Obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner(s)

Which is the first valid step in the Mutual Legal Assistance Treaties (MLAT) international cooperation process?

The central authority of the requesting country sends a commission letter of request to the central authority of the other country.

The central authority that receives the request sends it to a local judicial officer to find out if the information is available.

The central authority of the requesting country sends a commission letter of request to the central authority of the other country.

The investigator may remove the evidence collected without asking permission to do so.

An investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.

Which red flag should a compliance officer prioritize first for investigation?

Several cross-border transfers are received and immediately wired to another beneficiary.

A loan is paid off in full with cash after the sale of the vehicle that was used as collateral for the loan.

Several cross-border transfers are received and immediately wired to another beneficiary.

A customer has 20 monthly transactions that are repetitive but less than $500 USD per transaction.

A convenience store cashes government checks for its customers in amounts less than $1,000 USD per day.

After a FATF mutual evaluation process, which are resulting actions for jurisdictions that are determined to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing? (Choose two.)

Demonstrate a high-level commitment to swiftly resolve the identified deficiencies in the FATF mutual evaluation report.

Report to FATF on the implementation of their progress under the enhanced follow-up mechanism.

Expect private statements from FATF regarding the level of compliance of the jurisdiction, when insufficient progress is made.

Appeal to FATF for a technical compliance re-rating based on the jurisdiction's own experts criteria.

Demonstrate a high-level commitment to swiftly resolve the identified deficiencies in the FATF mutual evaluation report.

Request FATF for an extension of deadlines in order to provide local awareness on the improvements that are necessary to solve the deficiencies.

Report to FATF on the implementation of their progress under the enhanced follow-up mechanism.

Which methods are typically used to launder money using insurance companies? (Choose two.)

The policy holder overpays the policy and moves the funds out of the policy despite paying early withdrawal penalties.

The policy holder uses an offshore company to pay the insurance installments.

The policy holder overpays the policy and moves the funds out of the policy despite paying early withdrawal penalties.

The policy holder enters a sibling as a beneficiary of the insurance policy rather than themselves.

The policy holder purchases a bond and redeems it at a discount prior to its full term.

The policy holder uses an offshore company to pay the insurance installments.

The policy holder is strongly interested in how many costs are incurred when taking out an insurance policy.

Which situations would require a financial institution (FI) to update its ML/TF risk assessment? (Choose two.)

When new products, services or customer types are introduced

When the institution faces a merger or acquisition

When new products, services or customer types are introduced

When new board members are elected

When the AML compliance team hires new employees

When the institution faces a merger or acquisition

When opening a sales point in a new location in the same city

According to the Basel Committee on Banking Supervision, banks should deal with high-risk customers by:

performing enhanced due diligence including enhanced ongoing monitoring of the account activity.

maintaining segregated records to enable easy inspection by law enforcement in case of a subpoena.

assigning those customers to specified private bankers for better monitoring of their offshore transactions.

performing enhanced due diligence including enhanced ongoing monitoring of the account activity.

seeking approval from the board of directors before establishing the relationship.

Which assessments are involved in the processes of mutual evaluation and follow-up by the FATF?

Technical compliance assessments and effectiveness assessment

Risk assessments and technical standards assessments

Technical compliance assessments and effectiveness assessment

Sanction risk assessments and the country's National Risk Assessment

Country audit assessments and transaction monitoring assessments

Which private banking situation requires due diligence actions to be implemented according to the AML principles of the Wolfsberg group?

A wealthy individual from a high-risk country wants to open an account with a private bank.

A local wealthy individual wants to become a customer of a local retail bank.

A beneficial owner of an exchange house wants to open an account with the bank.

A wealthy individual from a high-risk country wants to open an account with a private bank.

A new customer asks to set up an exchange house using the bank as the correspondent.

ACAMS CAMS Practice Test 10 - Free Online Exam Questions 361-400

The findings of an internal audit discover that a large group of employees do not know how to handle Politically Exposed Persons (PEPs). Which is the next course of action that should be taken?

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