A law enforcement agency submits several requests to a financial institution. Which request is legitimate and requires the bank to respond?

Freeze an account in terms of a court order.

Keep an account open upon verbal request.

Seize privileged documents upon written request.

Produce documents and testimony without a subpoena.

Which action should a financial institution take when it receives a grand-jury subpoena regarding a customer?

Have the institution's assigned legal counsel review the subpoena.

Make copies of the customer's documents and submit the originals to the enforcement agency.

Notify the customer being investigated before submitting documents.

Keep the customer's accounts open at the enforcement agency's verbal request.

Have the institution's assigned legal counsel review the subpoena.

Which action does the Financial Action Task Force call on member countries to take in the most serious cases when countries have significant strategic AML deficiencies?

Contribute to mutual evaluations

Eliminate all financial dealings

Which should be provided to the board of directors or designated specialized committee when preparing suspicious activity reports (SARs)?

Statistical data regarding SARs filed during the reported period

All possible details of SARs filed during the reported period

Names of all customers subject to SARs filed during the reported period

Statistical data regarding SARs filed during the reported period

Copies of all SARs filed during the reported period

Which is an indicator that there is an attempt to conceal a company's true beneficial ownership?

The person filling out an application on the company's behalf indicates that a beneficial owner is a nominee for another person not named in the company's documentation.

The company has a subsidiary in another jurisdiction, and the beneficial ownership of the subsidiary includes a local investor in that jurisdiction.

Recent changes to the company's ownership structure have been documented internally and are reflected in documents filed with local authorities.

Beneficial ownership information from the time that the company was formed several years ago does not match the current beneficial ownership information.

The person filling out an application on the company's behalf indicates that a beneficial owner is a nominee for another person not named in the company's documentation.

A typical red flag regarding potential money laundering in connection with an art purchase occurs when a customer:

asks to pay a large amount in cash without a comprehensible reason.

buys a painting as an anonymous bidder and provides the source of wealth.

asks to pay in installments and pays from two differently named accounts.

asks to pay a large amount in cash without a comprehensible reason.

pays more at an auction for a painting than the estimated maximum price.

Which principle about safeguarding privacy and data should an auditor adhere to when performing an AML investigation?

AML and Data Protection Privacy laws should not be mutually exclusive.

Countries should clarify where AML and Data Protection Privacy laws are not balanced.

AML and Data Protection Privacy laws should not be mutually exclusive.

During evidence gathering, privacy laws are less important than local AML laws.

Terrorist financing is more relevant in the context of data protection and supersedes laws.

A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

Increased organized crime and corruption

According to the Financial Action Task Force, financial institutions should exit the relationship with a client in which case?

The client refuses to update information.

There is a change in ownership structure.

The client is a politically exposed person.

The country of incorporation has been elevated to high-risk.

A precious metals dealer opens a new account with a bank. Which requires a referral to AML investigations for further review?

Payments on the account reference unknown companies from high-risk jurisdictions

International incoming payments from foreign companies in which the precious metals dealer has an established relationship

Payments on the account reference unknown companies from high-risk jurisdictions

International outgoing wires to diamond dealers that are part of the diamond pipeline

Multiple daily point of sale transactions from third parties that appear to be individuals

Which accurately describes the social and economic impacts of money laundering?

Money laundering impacts the financial sector, which is critical for economic growth.

Foreign investors are often attracted to jurisdictions with significant money laundering activity as the same conditions favour legitimate economic activity.

Money launderers generally remit any tax revenue that would be due in the jurisdictions in which they operate via front businesses.

Increased money laundering generally results in greater economic stability as profits are reinvested in the jurisdiction.

The AML investigator is reviewing the transaction monitoring alerts and the customer's historical profile for the past two years. A review of the negative news search from a blog indicates that the customer was previously part of a terrorist group. Which activities warrant further escalation? (Select Two.)

The account received a large cash deposit followed by systematic automated teller machine (ATM) withdrawals until the balance was nominal.

The customer conducts multiple cash transactions on a regular basis which do not match the customer's occupation.

The customer remitted monies in several transactions to the account of a recognized charity non-profit organization.

The customer has bought and sold several real estate properties over the last year.

The credit transactions in the account relate mostly to salary and rental income from property.

The account received a large cash deposit followed by systematic automated teller machine (ATM) withdrawals until the balance was nominal.

The customer conducts multiple cash transactions on a regular basis which do not match the customer's occupation.

A customer puts high-denomination cash notes into a poker machine at a casino. Without placing any bets, the customer collected winnings in the form of a check from the casino.Which money laundering threats could result from the customer's activities?

Misuse of money service business

What is a key objective of the Egmont Group?

Provide enforcement recommendations to national law enforcement agencies pursuant to a memorandum of understanding

Validate Financial Action Task Force implementations in countries and territories through a system of evaluations

Provide enforcement recommendations to national law enforcement agencies pursuant to a memorandum of understanding

Exchange international law interpretations among regulators through plenary sessions

Foster better and secure communications across financial intelligence units through the application of technology

Which action by a prospective customer during the account opening process requires further investigation?

Questioning reporting requirements

Listing a long-distance phone number

Expressing knowledge of the financial industry

Which activities conducted by a lawyer could be a red flag for money laundering? (Select Two.)

The lawyer does not have experience in providing the particular services requested.

The lawyer was paid substantially higher than usual fees.

The lawyer does not have experience in providing the particular services requested.

The lawyer worked unusual hours to perform case duties.

The lawyer was paid substantially higher than usual fees.

The lawyer does not document case notes for the services provided.

The lawyer spent two days working a case.

An existing customer has changed its business scope and jurisdictions it deals with. Which are the steps the bank needs to take to manage sanctions compliance risk for this customer?

Collect further customer reference data and determine what must be screened and at which frequency.

Deploy an independent risk-based test to ensure the screening on this customer is effective.

Collect further customer reference data and determine what must be screened and at which frequency.

Conduct further sanctions screening on the customer's directors and ultimate beneficial owners.

Deploy an independent risk-based test to ensure the screening on this customer is effective.

Perform politically exposed person and negative media screenings.

According to the Financial Action Task Force methodology, which situations would require a financial institution (FI) to consider filing a suspicious activity report?

A beneficiary of a transaction is a politically exposed person.

A transaction involves funds exchanged from crypto to fiat currencies.

A FI identifies the payer is a dealer in precious metals or stones.

A FI is unable to verify the relevant customer due diligence documents.

In order for a terrorist organization to move funds from Cyprus to England through trade-based money laundering, which technique would be used?

An England-based exporter over-invoices a shipment to Cyprus.

An England-based exporter under-invoices a shipment to Cyprus.

An England-based exporter over-invoices a shipment to Cyprus.

A Cyprus-based exporter short-ships a shipment to London.

A Cyprus-based exporter over-invoices a shipment to London.

When an existing customer becomes a politically exposed person (PEP), what should the KYC analyst do during the review/refresh period?

Perform enhanced due diligence for the customer and update the KYC profile.

Seek the compliance officer's advice before marking the authorized signatory as PEP.

Update the new authorized signatories in the customer profile.

Perform enhanced due diligence for the customer and update the KYC profile.

Update the list of signatories and perform enhanced due diligence in the next periodic refresh cycle.

Which is most relevant when examining transactions suspected of being associated with money laundering via real estate?

The beneficial owner of the asset

The financial institutions involved in the transaction

AML training programs should extend beyond basic concepts to deliver targeted training by:

offering internal policies training, such as customer identification and verification procedures and policies.

offering general background and history training pertaining to money laundering controls.

offering periodic refresher training on AML bases (usually annually) for existing employees.

offering appropriate training tailored to the individual's specific roles, such as alerts for investigators and suspicious activity report writers.

The Financial Action Task Force recommends the incorporation of some measures in customer due diligence programs including:

conducting ongoing due diligence on the business relationship and monitoring of transactions.

identifying the number of beneficial owners without the verification of their true identity.

conducting the risk assessment of products and services.

conducting ongoing due diligence on the business relationship and monitoring of transactions.

identifying the products and services and their suitability to customers.

A financial institution (FI) is fined for failure to implement an effective AML program. Which consequences could the regulator impose on the bank's Chief AML Officer? (Select Three.)

Civil and criminal prosecution, fines, and imprisonment

Ban from employment in the financial services industry

Recommend termination of employment from the FI

Loss of professional accounting and legal designations

Civil and criminal prosecution, fines, and imprisonment

Ban from employment in the financial services industry

Recommend termination of employment from the FI

Add to the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List

Prohibition from dealing with goods on the Wassenaar List

A customer's registered business activity is a domestic carpet cleaning company. Besides domestic receipts, there are incoming weekly transactions from an international reputable auction house starting at 15,000 USD and averaging 30,000 USD. The matching cash outgoings amount to 90% of the incoming deposits to non-related individuals. Which is most concerning for potential money laundering?

The customer is paying 90% of the incoming proceeds to non-related individuals in cash.

The customer is a domestic carpet cleaning company.

The customer's international incomings are from an international reputable antique auction house.

The customer's initial international receipt has increased from 15,000 USD to an average of 30,000 USD per transaction per week.

Which economic and social factors could create a dependency on illicit activities and money laundering? (Select Two.)

Wider exposure to organized crime and corruption

Weaker development of economy and job opportunities

Wider exposure to organized crime and corruption

Weakness of public service and governmental funding

Weakness of private sector legitimacy

Weaker development of economy and job opportunities

A high-profile, successful entrepreneur has been a client of a Swiss private bank for more than a decade. Recently, the entrepreneur launched a political career, with rather extremist political views. On which grounds can the bank terminate the client's bank relationship? (Select Two.)

The client is not able (or willing) to provide documentary evidence of tax compliance.

Continuing the client relationship poses an increasing reputational risk, which could negatively affect the bank's future business.

The client is not able (or willing) to provide documentary evidence of tax compliance.

The client's account has an increase in unusual and significant monthly inflows.

A business partner of the account holder requests an asset freeze, stating a business dispute and disagreement over the quality of goods and services sold to the partner.

The client has made his/her fortune in the mining and excavation industry, which the bank has deemed as a high-risk industry.

Continuing the client relationship poses an increasing reputational risk, which could negatively affect the bank's future business.

A well-developed anti-money laundering compliance program is unlikely to achieve institutional goals without

Training appropriate employees.

Verification of account owners.

Endorsement by a competent authority.

During the course of work on behalf of a client, a lawyer participated in the movement of money. If the lawyer suspects an act of money laundering, which of the following should the lawyer do according to European Union Money Laundering Directives?

Adhere to business confidentiality laws.

Report the facts to the competent authorities.

Inform the client of the intent to terminate services.

Adhere to business confidentiality laws.

Once a financial institution has reported suspicious transactions on a valued customer, it should cooperate with competent authorities by

Submitting information upon receiving a legal request from parties involved in a civil law-suit.

Maintaining adequate written documentation of all individuals and transactions reported.

Hinting to the customer that she should come in and explain her behavior.

Submitting information upon receiving a legal request from parties involved in a civil law-suit.

Providing the supporting documentation to competent authorities upon request.

On discovering employees had unintentionally provided assistance to customers who were structuring transactions, an anti-money laundering specialist should recommend

Contacting law enforcement to monitor these employees.

Beginning termination procedures for these employees.

Contacting law enforcement to monitor these employees.

Providing remedial training to these employees.

Transferring these employees to another branch.

Which is a purpose of imposing sanctions?

Accomplish foreign policy and national security goals

Deter countries from choosing a desirable course of action

Accomplish foreign policy and national security goals

Deter countries from choosing a desirable course of action

Limit opportunities for desirable behavior

Which scenario best justifies why a customer's account might be closed by a financial institution?

The account has transactions that triggered multiple suspicious activity reports.

The customer uses a shipping company dealing with specially designated nationals.

The customer is the object of a civil subpoena.

The account shows periodic fixed amount remittances for tuition fees.

ACAMS CAMS Practice Test 16 - Free Online Exam Prep & Questions

Law enforcement is conducting an investigation of a financial institution (FI) and has submitted an overly broad and unduly intrusive request. Which is a Fl's most appropriate response?

Become a Premium Member for full access

Unlock Premium Member

ACAMS CAMS Practice Test 16

Question

ACAMS CAMS Practice Tests

Practice Tests