The Head of Compliance was informed by external auditors of a finding that indicates an element of AML policy failed to comply with the regulatory requirement. Which action should the Head of Compliance take next?

Submit a corrective action plan with a target timeline.

Make necessary updates to AML policy documents.

Inform the compliance team about the finding.

Agree immediately and provide corrective actions.

Submit a corrective action plan with a target timeline.

Which statements relate to the role of financial intelligence units (FIUs) in combatting financial crime on a national and international level? (Select Three.)

FIUs are legally empowered to use a wide range of investigative techniques, both in the public and in the private sector.

FIUs have a broad range of financial information to assess suspicious activity alerts.

FIUs are able to cooperate both with foreign counterparts and national institutions.

FIUs can only engage in cross-border collaboration where there exists a reasonable suspicion that is confirmed by a court-issued document.

FIUs are legally empowered to use a wide range of investigative techniques, both in the public and in the private sector.

FIUs use a limited range of investigative techniques.

FIUs have a broad range of financial information to assess suspicious activity alerts.

FIUs can only command data and information requests from public sector entities.

FIUs are able to cooperate both with foreign counterparts and national institutions.

Based on the AML principles outlined by the Wolfsberg Group, what do private and correspondent banks have in common when monitoring for terrorist financing?

Account and transactional activity are monitored after the proper identification and verification of customers.

Numbered or alternate name accounts will only be accepted if the bank has established the identity of the client and beneficial owner.

Account and transactional activity are monitored after the proper identification and verification of customers.

Cash access from a pre-paid card increases the potential that the card will be used for money laundering purposes.

Transaction monitoring examines the relationship between due diligence information and account closings.

Which activities could be considered a potential spear phishing scam? (Select Three.)

A courier delivers a duplicate invoice to a business that contains updated payment details of an existing supplier.

Payroll receives an external email from an employee looking to update their bank account information.

An employee receives an email that asks to download an attachment, but the attachment is a malware.

An employee receives a phone call requesting that money be sent to assist someone in trouble.

A courier delivers a duplicate invoice to a business that contains updated payment details of an existing supplier.

Payroll receives an external email from an employee looking to update their bank account information.

A business sends its employees an email warning that email passwords must be changed to prevent cyber-fraud.

An employee receives an email that asks to download an attachment, but the attachment is a malware.

Members of a religious organization receive a donation request by email claiming to be from their leader.

A senior government official is trying to open an account in a financial institution (FI) that operates in a different country from where the official is domiciled. The official is using an asset manager intermediary to represent them. According to the Wolfsberg Group, which next steps should the FI take regarding the opening of the account? (Select Three.)

Reasonably establish if the source of wealth and funds of the official is legitimate.

Perform due diligence procedures on the managing intermediary.

Determine whether the intermediary representative is acting on the officer's behalf.

Report to authorities that a possible suspicious activity is being undertaken by a politically exposed person.

Screen for applicable sanctions only for the official in the name of the person for whom the account will be opened.

Reasonably establish if the source of wealth and funds of the official is legitimate.

Perform due diligence procedures on the managing intermediary.

Determine whether the intermediary representative is acting on the officer's behalf.

Ensure the official's client file is updated so that the information is maintained in a consistent and complete manner.

A UK national has accounts with a bank in Belgium, who maintains a branch in New York. The UK national has been recently added and screened against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List. Which action should the Belgian bank take?

Freeze the assets of the customer and report to OFAC.

Allow all transactions up to the limit imposed by OFAC and report the transactions to the local financial intelligence unit.

Freeze the assets of the customer and report to OFAC.

Close the account and ask the customer to send the funds to a bank account in the US.

Continue performing transactions as the bank's headquarters is in Belgium.

Money laundering red flags associated with money service businesses include: (Select Two.)

the same customer conducts transactions in multiple locations in a short time period.

two or more customers use the same identification for separate and unrelated transactions.

cash payments on insurance policies by a third party.

the same customer conducts transactions in multiple locations in a short time period.

repeated receipt of funds transfers from virtual currency exchanges.

an employee lives a lavish lifestyle supported by his or her salary.

two or more customers use the same identification for separate and unrelated transactions.

In order to demonstrate commitment to AML compliance within a bank, the Board of Directors should:

establish a written AML policy that contains the basic principles to be followed by staff from the top down.

monitor the fulfilment of AML compliance duties within the bank.

keep senior management apprised of key developments in the AML regime and the impact of applicable laws and legislations.

ensure senior management maintains accountability for the effectiveness of the AML program implementation.

establish a written AML policy that contains the basic principles to be followed by staff from the top down.

Which is an example of structuring with regards to money laundering?

A person deposits substantial sums of currency into a number of local branches by making several cash transactions of less than 10,000 USD.

A person uses the hawala system to transfer 10,000 USD from Australia to a family member in China.

A person deposits 100,000 USD in cash at a bank.

A person deposits substantial sums of currency into a number of local branches by making several cash transactions of less than 10,000 USD.

A person deposits a large amount of more than 100,000 USD in cash and transfers it to another person's account.

A financial institution's (Fl's) policy is to apply enhanced due diligence (EDD) for every new client to ensure the effectiveness of the program. How should a consultant advise the Fl's management team?

Suggest the FI needs to implement a risk-based approach for EDD.

Suggest the management team select the clients that are chosen for EDD.

Suggest the management team ask the regulator for advice on EDD measures.

Suggest EDD for 50% of the clients is appropriate.

Suggest the FI needs to implement a risk-based approach for EDD.

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.)

The regular withdrawals from the policy by the end of the month

Unidentified third parties depositing cash to the policy

The regular withdrawals from the policy by the end of the month

Unidentified third parties depositing cash to the policy

A company established in a high-risk country contracting a policy for a domestic individual

A policy for an amount of 100,000 USD is to be considered high and suspicious

A life insurance policy with a savings feature for a national from a high-risk country

What are the rules imposed by the Office of Foreign Assets Control (OFAC) for legal entities and persons related to the US? (Select Two.)

Nationals of the US must comply with OFAC rules, regardless of where they are located in the world.

Any foreign corporation is also penalized if it conducts transactions with sanctioned countries under OFAC rules.

A subsidiary of a legal entity of the US, which is formally registered in a foreign country, is exempt from OFAC rules.

Nationals of the US must comply with OFAC rules, regardless of where they are located in the world.

A foreign individual visiting the US for a short vacation is obligated to follow OFAC rules.

Any foreign corporation is also penalized if it conducts transactions with sanctioned countries under OFAC rules.

The head office of a foreign legal entity which has a branch in the US does not need to comply with OFAC rules.

Which statements describe risks that are associated with international business corporations? (Select Two.)

They are created in a tax haven.

They are established with nominee directors.

They are inexpensive to acquire.

They are established as an off-shore company.

They are created in a tax haven.

They facilitate asset protection.

They are established with nominee directors.

A customer of a bank is an established art dealer. Within the KYC due diligence processes, which constitutes a triggering event that requires ongoing due diligence on this client?

The customer moves their headquarters from New Zealand to China and opens a branch in Malaysia.

The customer specializes in art sale and hire, and recently started an art selection consulting service.

The customer keeps adding artwork service providers to the payment beneficiary list.

The customer moves their headquarters from New Zealand to China and opens a branch in Malaysia.

The owner wants to exchange foreign currency for an overseas business travel.

When deficiencies are identified in the Financial Action Task Force (FATF) mutual evaluation report, the assessed country needs to:

address the shortcomings identified in the report and agree to post-assessment monitoring by FATF.

request exception from the relevant FATF-style regional body by submitting a report with the reasons.

pay a penalty for the delay in adopting the FATF 40 recommendations accurately and timely.

prepare a report to defend its position against the FATF secretariat, which is comprised of the assessors.

Which step should financial institutions take when complying with sanctions requirements?

Freeze the funds or assets of designated persons and entities once this decision is approved by the Board.

Adopt automatic screening systems to detect designated persons and entities.

Conduct enhanced due diligence for prohibited entities on the sanctions list.

Change the risk profile to 'high-risk' if an existing customer becomes a sanctioned entity and continue monitoring further transactions.

Freeze the funds or assets of designated persons and entities once this decision is approved by the Board.

The Office of Foreign Assets Control requirements have an extraterritorial reach because compliance is required by:

intermediaries of a transaction with a US nexus.

foreign financial intelligence units.

According to the Basel Committee, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to:

address variations in risk among each line of business within the organization.

address KYC deficiencies in account opening procedures.

ensure policies and procedures are reviewed every three months.

address structure changes strictly related to new employees.

address variations in risk among each line of business within the organization.

Which approach ensures the successful implementation of a transaction monitoring system?

Performing systems integration testing at key steps of development and user acceptance testing prior to going live with the transaction monitoring system

Taking great care to minimize changes to transaction monitoring system rules and parameters once these have been certified as accurate

Performing systems integration testing at key steps of development and user acceptance testing prior to going live with the transaction monitoring system

Implementing third-party transaction monitoring software, taking great care not to adjust pre-programmed rules and alerting thresholds

Ensuring all checks of a transaction monitoring system's rules and parameters use actual live data after the system is operational

When investigating an AML event, which techniques would be used to investigate suspected mule accounts? (Select Three.)

Determine if the suspected accounts are being accessed by a common person, telephone number, or device.

Reconcile the stated purpose of the account with actual transaction history and compare with peer groups.

Establish the frequency with which the funds are moved in and out of the accounts.

Determine if the suspected accounts are being accessed by a common person, telephone number, or device.

Reconcile the stated purpose of the account with actual transaction history and compare with peer groups.

Submit a suspicious activity report to the national financial intelligence unit.

Review the account history and determine if there are previous payments to charity accounts.

Establish the frequency with which the funds are moved in and out of the accounts.

Contact the appropriate law enforcement agency and report the account activity.

While conducting a review of a medium-risk customer, an analyst noted that a newly added authorized signatory is a foreign politically exposed person (PEP). Which is the appropriate next step for the analyst to take?

Review beneficial ownership to finalize the risk category of the customer.

Remove the PEP as the authorized signatory.

Re-categorize the customer as high-risk.

Categorize the authorized PEP signatory as high-risk.

How should a compliance program respond to an AML audit finding?

By using the findings to identify and assess their money laundering risk

By closing the accounts that were subject to findings

By giving recommendations for each finding as part of an audit report

By nominating an independent party to implement the corrective action

Law enforcement is confidentially investigating 20 individuals suspected of belonging to a criminal network allegedly involved in laundering tens of millions of euros for cybercriminals. Which actions need to be taken by the AML Specialist at a bank upon learning the alert? (Select Two.)

Involve the bank's legal and compliance function to address the gravity of the matter.

Perform a search on the bank's client data platform to determine if the bank has had any business with the named individuals.

Involve the bank's legal and compliance function to address the gravity of the matter.

Perform a search on the bank's client data platform to determine if the bank has had any business with the named individuals.

N Send out an email to all of the bank's client advisors to request information on any of the individuals.

Report findings back to law enforcement only if they are of any significance.

Respond to law enforcement that their request without a judicial order would breach the bank's General Data Protection Regulation duty with respect to its clients.

A bank received a subpoena regarding one of its clients. The financial intelligence unit of the bank should review the subpoena and:

perform a transaction review and respond fully to the subpoena.

adjust the client's risk score and close the case.

file a suspicious activity report (SAR), including the receipt of the subpoena in the SAR narrative.

close the client's account by informing the client of the subpoena.

perform a transaction review and respond fully to the subpoena.

According to the USA PATRIOT Act, under which condition would US financial institutions (Fls) maintain correspondent accounts for foreign shell banks?

US Fls cannot maintain correspondent bank accounts for foreign shell banks.

US Fls can open correspondent bank accounts for foreign shell banks but only in certain countries.

US Fls must undertake a rigorous, risk-based approval process to open correspondent bank accounts for foreign shell banks.

US Fls must be certified by the Financial Action Task Force to maintain correspondent accounts for foreign shell banks.

To understand if the customer operates in line with the firm's risk appetite for a specific industry segment, a financial institution must:

obtain sufficient customer information to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile.

obtain identifying information for beneficial owners through a completed certification form from the individual opening the account on behalf of the legal entity customer.

obtain the name and address, country identification number and date of birth of a non-customer who purchases a monetary instrument.

obtain the name, date of birth for an individual, address and identification number from each customer before opening the account.

A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds. Which allows the US authorities to seize the funds of the foreign bank held with the US bank?

The Financial Crimes Enforcement Network Customer Due Diligence Final Rule

Regulations of the Office of Foreign Assets Control, US Department of Treasury

Before providing suspicious activity report documentation to an authorized requestor, the institution should first:

independently verify the requestor.

contact a local financial intelligence unit for authorization.

independently verify the requestor.

What should a bank do if it suspects one of its employees may be involved in mortgage loan fraud?

Conduct an investigation by gathering and analyzing information on the employee.

File a suspicious activity report on the employee's activities if management thinks it is suspicious.

Conduct an investigation by gathering and analyzing information on the employee.

Automatically file a police report about the employee's potential misconduct.

Initiate civil litigation against the employee to recover damages for losses incurred.

What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?

Designate a person responsible for the internal investigation in preparation of documents for the request.

Verify the officer's identification and ask for the law enforcement request to be served when the Chief Executive Officer is available to sign for it.

Designate a person responsible for the internal investigation in preparation of documents for the request.

Ask for an extension to review the Fl's privacy policy and confidentiality policy before providing any information under the law enforcement request.

Keep senior management informed at all times to strategically organize a defense to terminate the law enforcement request.

A customer has borrowed the cash surrender value of their life insurance policies. Which requires a further investigation and filing of the suspicious activity report?

The customer directs the payment of the money borrowed to an unrelated third party.

The customer uses multiple currency equivalents from different sources to pay the monthly life insurance policy premiums.

The customer has paid the monthly life insurance policy premiums with cash.

The customer directs the payment of the money borrowed to an unrelated third party.

The customer cancels the insurance contract without concern for the penalties after the money is borrowed.

Which factors should lead to a reassessment of the current AML program? (Select Two.)

Expansion of business to new territories

Appointment of a new Chief Financial Officer

Change of internal audit team members

What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (Fls) that are based outside of the US?

Subpoena documents from Fls that have no presence in the US.

Allow all US regulators to place a non-US FI on the Specially Designated Nationals and Blocked Persons List.

Subpoena documents from Fls that have no presence in the US.

Revoke the banking licenses of non-US Fls in countries outside the US.

Sanction a country when an individual FI does not comply with US law.

ACAMS CAMS Practice Test 15 - Free Online Exam Prep & Questions

A compliance analyst has recently investigated an account where money was deposited in amounts below the reporting limit and almost entirely withdrawn in a foreign country. Which type of money laundering is the compliance analyst potentially identifying?

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ACAMS CAMS Practice Test 15

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