Financial institutions (FIs) perform AML risk assessments to ensure:

proper controls surrounding higher-risk products, services, customers, and geographic locations.

a record for regulators indicating an AML risk assessment was completed at least once.

internal audit assurance that all AML-related policy and procedures are board approved.

satisfaction of the board of directors' approved risk appetite.

proper controls surrounding higher-risk products, services, customers, and geographic locations.

Which key factor would result in the decision for a financial institution (FI) to exit a client relationship?

After assessing all risk factors the level of residual client risk exceeds the FI's risk appetite.

The client is a registered charity known to remit funds to high risk geographies where there is limited due diligence information available.

Closing the client accounts will help reduce the number of transaction monitoring alerts.

Client transactions generate ongoing transaction monitoring alerts that did not result in any SAR/STR filings.

An analyst reviewing trade finance transactions notices an increase in price of 25% over 12 months for commodities with the same specification and quantity. Which action should the analyst take?

Produce an investigation report that considers client activity and factors that may have legitimately affected transaction cost.

Produce an investigation report that finds evidence to substantiate the analyst's suspicion and submit a SAR/STR.

Produce an investigation report that considers client activity and factors that may have legitimately affected transaction cost.

Produce an updated due diligence record for the client so that monitoring can be enhanced.

Produce a SAR/STR that describes apparent trade-based money laundering and submit to the Financial Investigation Unit (FIU).

A SAR/STR should be filed when the accountable institution identifies that:

cash transactions have values which avoid reporting thresholds.

a customer makes a cash deposit in round dollars.

cash transactions have values which avoid reporting thresholds.

an alert is generated by a transaction monitoring system.

an employee is not clearing alerts in a timely manner.

The bank's Compliance Officer is tasked with designing standards based on Basel's KYC principles. Which essential elements should be included in the program? (Choose two.)

Documenting a customer acceptance policy

Establishing on-going monitoring of high-risk accounts

Appointing an independent audit function

Conducting a money laundering risk assessment

Documenting a customer acceptance policy

Establishing on-going monitoring of high-risk accounts

The main purpose of the US Treasury Department for OFAC's extraterritorial reach is to:

accomplish the foreign policy and national security goals of the US.

defend the US against questionable trade practices of its economic rivals.

protect allied nations of the US from the economic threats of non-allied nations.

align OFAC's and other countries' extraterritorial reach requirements.

Which trading pattern may be indicative of money laundering in capital markets?

Remittance of a round dollar amount

Transacting with multiple counterparties

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?

Customer activity is unreasonable

According to the Basel Committee's principles on customer due diligence, a bank should:

obtain the information to establish the identity of a customer, beneficial owners, and any person acting on behalf of the customer,

maintain systems to detect suspicious transactions based on a customer's velocity and volume patterns.

refuse to conduct ongoing business with a customer who fails to provide proper identification documentation.

obtain the information to establish the identity of a customer, beneficial owners, and any person acting on behalf of the customer,

file a suspicious activity report when there is reason to believe the bank is being used for criminal activity.

Which transaction monitoring processes would alert a bank for red flag activity?

A charity account receives multiple electronic transfers and then sends a wire transfer to a higher-risk country.

A client who does not typically make extravagant credit card purchases books an airline ticket on a travel website.

The company has a name that is similar to that of a company whose directors are named on the bank's internal blacklist.

A client makes a prepayment on their credit card and a week later makes multiple cash withdrawals using an automated teller machine (ATM) in a foreign country.

A charity account receives multiple electronic transfers and then sends a wire transfer to a higher-risk country.

A company is endorsing the execution of terrorism through different activities, such as developing content for pro-terrorist television messages, encouraging the support of terrorist activities via the web, advertising the use of cryptocurrencies, and paying producers and reporters for television and web messaging. What specific action should be considered financing of terrorism?

Paying producers and reporters for television and web messaging

Encouraging supportive web messages

Paying producers and reporters for television and web messaging

Developing pro-terrorist content

Advertising the use of cryptocurrencies

The Chief Compliance Officer (CCO) of a financial institution has been asked by a manufacturing customer reliant upon imported raw materials if there will be repercussions to his business following the weak assessment of the recent publicly issued Financial Action Task Force (FATF) Mutual Evaluation Report (MER). How should the CCO respond?

Delayed processing of cross-border transfer of funds between countries may occur due to increased scrutiny to determine the legitimacy of each transfer.

Citing inaccurate content of the MER. the president of the country has called upon the FATF to publicly withdraw the MER and commission an independent review of findings.

Mandate termination of all cross-border trading until evidence can be provided to show an improved position of compliance for the weaknesses stated in the MER.

Negative consequences will not occur because the manufacturing customer has been trading with reputable countries and suppliers for many years without incident.

Which is a key aspect of the first EU Directive on Money Laundering?

IT expanded the definition of criminal activity to all serious crimes.

It defined money laundering as a separate crime.

It established drug trafficking as a predicate offense of money laundering.

It extended the scope beyond drug-related crimes.

What should an employee do after witnessing suspicious activity from a coworker?

Escalate to the company's conflict line or compliance department.

Request that the coworker provide justification for their actions.

Escalate to the company's conflict line or compliance department.

Request help from colleagues in determining that the best course of action.

Discuss the suspicious activity with your supervisor.

Which is true about Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

Tools used by FRSBs include training measures and mutual evaluations of its members.

FSRBs set standards for their member countries that supplement FATF's standards.

Tools used by FRSBs include training measures and mutual evaluations of its members.

AFATF-member country cannot also be a member of an FSRB.

To be a member of an FSRB, a country must have enacted AML and Anti-Terrorist Financing laws.

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?

Data protection and privacy laws

Technological inconsistencies and challenges

Which does the USA PATRIOT Act stipulate for foreign banks concerning correspondent banking?

Illicit funds deposited with a foreign bank can be seized by the US government by confiscating the same amount of funds deposited in a correspondent account in the US.

US banks that maintain correspondent accounts for foreign banks must keep identification records of foreign bank owners with 50% or more ownership in the bank

A subpoena issued to a foreign bank that maintains a correspondent account in the US can require the bank to submit any records except for records in a foreign jurisdiction.

The US federal banking agency can require foreign banks to produce records or information related to any account opened in the US or other countries.

Illicit funds deposited with a foreign bank can be seized by the US government by confiscating the same amount of funds deposited in a correspondent account in the US.

Typical events to identify and investigate potential AML activities include: (Select Three.)

blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List.

internal tips from employees of the bank about potential suspicious activity.

alerts triggered by the automated AML monitoring system.

blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List.

internal tips from employees of the bank about potential suspicious activity.

alerts triggered by the automated AML monitoring system.

subpoenas requesting information for civil cases.

requests from law enforcement agencies.

accounts going to dormant status.

When a financial institution is requested to provide data and information to a law enforcement agency for matters related to financing of terrorism, assistance:

cannot be refused on the grounds of bank secrecy.

can be refused on the grounds of tipping-off.

cannot be refused on the grounds of tipping-off.

can be refused on the grounds of bank secrecy.

cannot be refused on the grounds of bank secrecy.

Why should a financial institution (Fl) require an update of its AML risk assessment?

To ensure an accurate reflection of the Fl's money laundering and other illicit financial activity risks

To identify risk considerations for sharing information based on Fl changes

To ensure an accurate reflection of the Fl's money laundering and other illicit financial activity risks

To satisfy law enforcement when reporting suspicious activity

To ensure the Fl's alignment with the board-approved strategic plan

Which are key objectives of the Egmont Group? (Select Two.)

Setting international standards that aim to prevent

Serving as a united body of financial intelligence units across the world

Setting international standards that aim to prevent

AML Providing a platform for the secure exchange of financial intelligence

Serving as a prudential regulator for global financial institutions

Serving as an authoritative body in the field of anti-corruption

Serving as a united body of financial intelligence units across the world

Which of the following employee behaviors would not trigger an AML red flag?

An employee generates high earnings on investments made on the stock market.

An employee lives a lavish lifestyle that could not be supported by his or her salary.

An employee is involved in an excessive number of unresolved exceptions.

An employee uses company resources to further private interests.

An employee generates high earnings on investments made on the stock market.

When assessing and managing money laundering risks while operating in foreign jurisdictions different from that of the head office, an effective AML monitoring program should:

conform to the foreign jurisdiction policies to align with the head office policies.

provide all foreign jurisdiction reports to the head office for approval.

be tailored to the higher of standards between the jurisdictions.

be consistent with the head office audits.

conform to the foreign jurisdiction policies to align with the head office policies.

When using virtual assets such as Bitcoin to finance terrorism, which tactic may be used to ensure that the virtual assets are not easily seized by law enforcement?

Using self-hosted wallets to create many different donation addresses that are updated continuously

Posting donation addresses that are linked to accounts at centralized virtual asset service providers

Using the same donation address across multiple donation campaigns and media types

Forming relationships with virtual asset service providers that have strong KYC processes in place to avoid suspicion

Which is an extraterritorial function of Office of Foreign Assets Control sanctions?

Prohibiting transactions and requiring the blocking of assets of designated persons and organizations

Interrupting the Ell's economic and financial relations with third countries

Implementing targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions

Prohibiting transactions and requiring the blocking of assets of designated persons and organizations

Requiring all appropriate elements of the financial services industry to report potential money laundering

According to the Financial Action Task Force, which action must a financial institution take to fulfill customer due diligence obligations?

Verify the customer is not on any sanction lists.

Secure a written declaration from the customer confirming the source of the funds.

Obtain information on the intended nature of the banking relationship.

Identify shareholders listed on the stock exchange of corporate entities holding fifty percent of the shares.

Verify the customer is not on any sanction lists.

Who bears the ultimate responsibility for approving a financial institution's relationship with a politically exposed person?

Enhanced due diligence compliance officer

Which risks are involved in a correspondent banking client's ownership and management structure? (Select Two.)

Status as a state, publicly, or privately held entity

Transparency of the ownership structure

Size of the management structure

Status as a state, publicly, or privately held entity

Length of time since the last Wolfsberg Group review

Transparency of the ownership structure

In its paper. Customer Due Diligence for Banks, the Basel Committee on Banking Supervision identified which risks on banking institutions as a result of an inadequate KYC program?

Legal, reputational, operational, concentration

Outsourcing, legal, concentration, reputational

Security, information, local, operational

Legal, reputational, operational, concentration

Credit, operational, market, concentration

A US casino customer has won 55,518 USD. The customer goes to the casino cashier cage to execute some transactions. Which ^transactions are an indicator of money laundering? (Select Two.)

The customer transfers 100.000 USD to another personal bank account located outside the customer's resident country,

The customer requests the cashing out of the winnings in checks under 10.000 USD.

The customer transfers 100.000 USD to another personal bank account located outside the customer's resident country,

The customer requests the cashing out of the winnings in checks under 10.000 USD.

The customer transfers all the winnings to another personal bank account located outside the customer's resident country.

The customer requests the cashing out of the winnings in a single check.

The customer transfers 50.000 USD to another personal bank account located in the customer's resident country.

A new business opened an account at a bank. After a month of activity, the account is referred to AML Investigations for potential human trafficking activity. Which red flags most likely triggered the referral? (Select Two.)

Several cash deposits along the country's border that are quickly withdrawn by third parties _ Multiple purchases of virtual currency at or just below the reporting threshold

Several lodging and food payments made on the same day at unusual hours for a business

Trade in large volumes conducted with countries that are part of the diamond pipeline

Several cash deposits along the country's border that are quickly withdrawn by third parties _ Multiple purchases of virtual currency at or just below the reporting threshold

Several lodging and food payments made on the same day at unusual hours for a business

Conducting the businesses transactions online without visiting a branch

Who meets the standard to perform the AML audit? (Select Two.)

An internal auditor with the requisite knowledge and expertise of AML

Qualified bank staff if not involved in the AML function being tested

An internal auditor with a family member employed in the AML department

An internal auditor with the requisite knowledge and expertise of AML

A consultant previously employed in the AML department within the past 2 years

Qualified bank staff if not involved in the AML function being tested

A consultant with limited knowledge and experience in AML but many years of internal audit experience

Which is a characteristic of the Financial Action Task Force (FATF) 40 recommendations?

They comprise global standards for countering money laundering, recognized by government bodies across the world.

They enable FATF's active engagement in law enforcement matters, investigations, or prosecutions.

They are automatically transposed into local law across the EU member states and the US.

They provide a list of mandatory requirements for an effective AML regulatory framework.

They comprise global standards for countering money laundering, recognized by government bodies across the world.

An example of an external factor that will affect an organization's AML risk is:

political system changes in a specific jurisdiction.

acceptance of new customer types.

political system changes in a specific jurisdiction.

introduction of a new product which will be offered to a wide range of clients.

introduction of mobile banking for all clients.

ACAMS CAMS Practice Test 11 - Free Online Exam Prep & Questions

What national agency is responsible for analyzing and assessing the information it receives to substantiate possible existence of money laundering or terrorist financing activities?

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