Which activity associated with new or developing technologies does the Financial Action Task Force recommend financial institutions pay special attention to?

Non-face-to-face business relationships or transactions

High volumes of cash transactions

Complex or unusually large transactions

Financial intermediaries performing transactions for customers

Non-face-to-face business relationships or transactions

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 tipping-off.

can be refused on the grounds of tipping-off.

cannot be refused on the grounds of bank secrecy.

cannot be refused on the grounds of tipping-off.

can be refused on the grounds of bank secrecy.

A law enforcement agent is conducting an investigation into a possible money laundering event. During the investigation, the officer will use:

a risk-based approach alert generating system.

confirmed evidence obtained from financial intelligence units.

a process to identify suspicious activity.

Which situation involving a vendor presents increased AML and/or sanctions risk to an organization?

The vendor provides services to end users located in an area subject to economic sanctions.

The vendor's sales representative was a refugee from a sanctioned jurisdiction as a child.

The vendor has no individuals that own or control more than 10% of the company.

The vendor is organized as a privately held company.

The vendor provides services to end users located in an area subject to economic sanctions.

Country A's anti-corruption authority has been investigating the movement of potential proceeds of bribery and corruption to Country B and is now preparing to take the case to a local court.Which method of obtaining the required evidence to prosecute the case would be most effective?

Make a request for the required evidence using Country A's Mutual Legal Assistance Treaty (MLAT) with Country B.

Use the Egmont Secure Web to obtain the required evidence from Country B's Financial Intelligence Unit (FIU).

Use the International Criminal Police Organization (INTERPOL) network to obtain the required evidence from Country B.

Make an official request directly from the head of Country A's anti-corruption authority to Country B's corresponding law enforcement authority.

Which red flags could indicate increased terror financing and money laundering risks related to cultural objects? (Select Three.)

Use of art storage facilities located in tax-free zones.

Engagement of third-party art advisors as representatives at art auctions.

High-quality single pieces of significant value sold on social media platforms.

Use of art storage facilities located in tax-free zones.

Paying fair market value or premium prices for valuable art, gems, or precious metals at auction.

Engagement of third-party art advisors as representatives at art auctions.

High-quality single pieces of significant value sold on social media platforms.

Use of art and antiquity experts to verify an item's authenticity.

A bank received a subpoena regarding one of its clients. The Financial Intelligence Unit (FIU) of the bank should review the subpoena and:

Perform a transaction review and respond fully to the subpoena.

File a Suspicious Activity Report (SAR), including the receipt of the subpoena in the SAR narrative.

Perform a transaction review and respond fully to the subpoena.

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

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

When under a regulator's consent order or similar action, who at an organization is ultimately accountable for the remediation of any violations of AML/CFT laws and regulations?

Designated AML Compliance Officer

What is the relationship between the EU Anti-Money Laundering Directives (AMLDs) and local AML regulations in European Union (EU) member states? (Select Two.)

Local AML regulations may impose additional or more stringent requirements than the EU AMLD.

The EU AMLD provides a framework that member countries must implement through local AML regulations.

Local AML laws and regulations override the requirements of the EU AMLD.

Local AML regulations may impose additional or more stringent requirements than the EU AMLD.

The EU AMLD provides a framework that member countries must implement through local AML regulations.

The EU AMLD and local AML regulations are separate and unrelated legal frameworks.

The EU AMLD and local AML regulations must have identical requirements.

Which actions should be taken by a financial institution (FI) 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.

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

Notify the customer being investigated before submitting documents.

Which statement about the extraterritorial reach of U.S. laws and legislation is accurate?

Section 319(b) of the USA PATRIOT Act permits the seizure of funds from a correspondent bank account in the U.S. that has been opened and maintained for a foreign bank.

The Office of Foreign Assets Control's (OFAC's) economic and trade sanctions may pose extraterritorial risks for financial institutions and businesses outside of the U.S.

The Bank Secrecy Act (BSA) extraterritorial reach requires that the Travel Rule be applied to all financial institutions globally, including all USD transactions.

The Anti-Money Laundering Act of 2020 (AML Act) extraterritorial reach covers all USD transactions throughout the global economy.

Section 319(b) of the USA PATRIOT Act permits the seizure of funds from a correspondent bank account in the U.S. that has been opened and maintained for a foreign bank.

The Office of Foreign Assets Control's (OFAC's) economic and trade sanctions may pose extraterritorial risks for financial institutions and businesses outside of the U.S.

Which of the following measures is one that the FATF recommends that Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) take to mitigate risks arising from business relationships with foreign politically exposed persons (PEPs)?

Establish processes to understand the PEP's source of wealth and source of funds, and to refresh that understanding regularly.

Subscribe to commercial databases to assist in the detection of PEPs.

Raise transaction monitoring thresholds for PEP accounts in automated systems to account for higher transaction values and complex legal vehicles.

Require approval from the prudential regulator for entering into or continuing the business relationship.

Establish processes to understand the PEP's source of wealth and source of funds, and to refresh that understanding regularly.

A financial institution (FI) is investigating an alert generated by the automated transaction monitoring system. The AML analyst must determine whether the alert should be escalated for further investigation or archived as a false positive.Which action might be reasonable for the AML analyst to take?

Request information from the relationship manager assigned to the account that caused the alert.

Perform below-the-line testing to ensure the automated monitoring system is operating effectively.

Send a request for information (RFI) to the counterparty bank involved in the transaction that caused the alert.

Request information from the relationship manager assigned to the account that caused the alert.

Restrict the client's access to the account.

Which of the following corporate structures present a higher money laundering risk due to reduced transparency? (Select Three.)

A company with nominee shareholders and directors in a local jurisdiction.

A company with bearer shares incorporated in a tax haven jurisdiction.

A private investment company incorporated in a tax haven jurisdiction with strict secrecy laws.

A company with nominee shareholders and directors in a local jurisdiction.

A private company with no activity in a tax haven jurisdiction.

A company with bearer shares incorporated in a tax haven jurisdiction.

A limited liability company (LLC) incorporated in a foreign jurisdiction.

A private investment company incorporated in a tax haven jurisdiction with strict secrecy laws.

According to the Financial Action Task Force (FATF) report on terrorism financing, charities and nonprofit organizations are often vulnerable to terrorist financing because they: (Select Two.)

Have a global presence that provides a framework for national and international operations and financial transactions that are often in or near areas most exposed to terrorist activity.

Enjoy the public trust and have access to considerable sources of funds, and their activities are often cash-intensive.

Have a global presence that provides a framework for national and international operations and financial transactions that are often in or near areas most exposed to terrorist activity.

Are usually legitimate establishments and will not use the funds collected through donations for the profit of individuals or entities.

Collect donations from various sources, and their primary objective is philanthropy and social well-being.

Enjoy the public trust and have access to considerable sources of funds, and their activities are often cash-intensive.

Which piece of information identified by customer screening would be the most likely reason to trigger consideration of exiting a business relationship with a customer because of financial crime concerns?

The customer is linked to an organized crime group.

The customer is a shareholder of a corporation declared bankrupt.

The customer is linked to an organized crime group.

The customer is a politically exposed person (PEP).

The customer allegedly violated a construction permit limit.

Money laundering has social and economic impacts, especially within developing countries. A high volume of money laundering in a country may: (Select Two.)

Reduce confidence in the country's financial sector.

Dissuade government tax incentive programs.

Reduce volatility in exchange and interest rates.

What is the first step that an investigator should take when beginning a financial investigation into a potential suspicious activity?

Gathering and assessing internal sources of information, including information obtained from the customer, transactions, and value and volume.

Contacting the country's financial intelligence unit (FIU) officers to seek advice on whether the potential suspicious activity is indeed suspicious.

Determining whether the potential suspicious activity is consistent with the customer's transactional behavior, nature of business, and occupation.

Gathering and assessing internal sources of information, including information obtained from the customer, transactions, and value and volume.

Identifying and reviewing external information, including online presence, customer-related entities, and relevant media.

According to the Basel Committee principles, which actions would make a customer identification program at a bank more robust? (Select Two.)

Understanding the nature and purpose behind a new business opening an account at the bank.

Understanding why a customer has selected a particular financial institution for banking.

Limiting the online activities of a new customer during the first two months.

Understanding the nature and purpose behind a new business opening an account at the bank.

Verifying the identity of a customer with reputable online source documentation.

Understanding why a customer has selected a particular financial institution for banking.

An international bank is headquartered in Madrid, Spain, with an office in New York City (NYC), US. The Madrid office is investigating a transaction originating from a customer of the NYC office and inquires whether the NYC office can share any relevant further information on the individual. Upon further research, the NYC office finds that they have filed a Suspicious Activity Report (SAR) on the individual in the previous year.Which factors need to be considered before sharing the requested information? (Select Two.)

The bank should consider jurisdictional privacy requirements and its own policies and procedures to determine what information to share.

The information should only be shared on a need-to-know basis.

The bank should consider jurisdictional privacy requirements and its own policies and procedures to determine what information to share.

The information should only be shared on a need-to-know basis.

The bank should report this to the Financial Crimes Enforcement Network (FinCEN) and receive formal guidance before sharing the information.

The foreign bank must always request approval by its national anti-financial crime authority to share any information cross-border.

Which of the following are included in the 11 Immediate Outcomes outlined in the Financial Action Task Force (FATF) methodology for assessing technical compliance with the FATF Recommendations and the effectiveness of AML/CFT/CPF systems during mutual evaluations? (Select Three.)

International cooperation provides actionable information to use against criminals.

Supervisors regulate financial institutions and non-bank financial institutions and their risk-based AML/CFT programs.

Money laundering offenses are investigated and criminally prosecuted.

International cooperation provides actionable information to use against criminals.

Supervisors regulate financial institutions and non-bank financial institutions and their risk-based AML/CFT programs.

Financial intelligence information is collected by authorities and shared with the FATF for further investigation.

Those convicted of money laundering offenses are denied access to basic banking services.

Money laundering offenses are investigated and criminally prosecuted.

A credit institution has been served with a preliminary findings report highlighting major deviations from AML obligations in its country and stating that it faces the possibility of withdrawal of its banking license.Which authorities could have issued the report?

A banking sector self-regulatory body

Financial Action Task Force (FATF)

The EU's 6th Anti-Money Laundering Directive (6AMLD):

Strengthened provisions relating to the accuracy of data submitted to central beneficial ownership registries.

Extended AML oversight to crowdfunding platforms and professional football clubs.

Eliminated the requirement for the European Commission to conduct a risk assessment.

Created a central EU watchdog to combat money laundering.

Strengthened provisions relating to the accuracy of data submitted to central beneficial ownership registries.

The product department of an insurance company proposes launching a special life insurance product with investment elements that allow clients to instruct payments to unknown third parties via partner financial institutions. The product department seeks fast-track approval from compliance to ensure quick market launch.What is the best course of action from a compliance perspective?

Do not sign off on the product because it contains the option to make payments to unknown third parties, which carries a high money laundering risk.

Sign off on the product because client KYC is complete, and unknown individuals can be added or removed throughout the duration of the contract.

Do not sign off on the product because the compliance department was not involved from the beginning of the product development process, which is a severe governance violation.

Sign off on the product quickly to gain a competitive advantage while evaluation by compliance can be completed later.

A financial institution is designing an Enterprise-Wide Risk Assessment (EWRA).According to the Wolfsberg Group's risk-based approach to AML, an effective EWRA should:

Include appropriate measures and controls to mitigate money laundering risks stemming from higher-risk customers, products, and geographies.

Use a framework provided by a third-party vendor and used by other FIs in the jurisdiction.

Include appropriate measures and controls to mitigate money laundering risks stemming from higher-risk customers, products, and geographies.

Focus on understanding the risks presented by new clients within the assessment period and the controls to mitigate associated money laundering risks.

Focus on the inherent risk in the FI's product and service offerings and the controls to mitigate potential money laundering risks.

An agent of a wealthy individual from a high-risk country (as per the EU's high-risk jurisdictions list) approaches a notary in an EU country to dispose of assets recently acquired at an auction through an offshore company. The agent holds power of attorney from a law firm in another EU country. The transfer price is significantly lower than the auction price, but the agent refuses to explain the discrepancy.Which red flags should the notary consider? (Select Two.)

The agent acted on behalf of an individual residing in a high-risk jurisdiction.

The agent requested a disposal of assets at a lower price than recently acquired.

The agent acted on behalf of an individual residing in a high-risk jurisdiction.

The power of attorney was issued by a law firm in a different EU country from where the transaction took place.

The assets acquired through an auction were put in the name of an offshore company.

The agent requested a disposal of assets at a lower price than recently acquired.

An international bank is investigating a payment requested by a correspondent banking partner. The payment originated from a corporation located in Hong Kong, and the final beneficiary is an individual in New York. The transaction triggered an alert in the bank's automated transaction monitoring system.Which steps should the bank take first to address the alert? (Select Three.)

Confirm that neither the beneficiary nor the originator are sanctioned parties.

Request supporting documents, including invoices and contracts, to confirm the purpose of the payment.

Check for negative news in public sources on the sender and receiver.

Call the receiving individual to review identity verification documents.

Confirm that neither the beneficiary nor the originator are sanctioned parties.

Request supporting documents, including invoices and contracts, to confirm the purpose of the payment.

Check for negative news in public sources on the sender and receiver.

Send a 314(b) request to the corporation's bank in Hong Kong.

Which of the following approaches is best when determining the timeline to complete an internal investigation and report a suspicious activity report (SAR) to the local Financial Intelligence Unit (FIU)?

Follow local regulatory requirements for reporting periods.

Use a matrix based on the complexity of an investigation.

Act on the professional judgment of a senior manager.

A bank is completing a periodic KYC profile review for a small digital marketing company based in New York City.Which of the following would be a red flag?

The account activity includes deposits made in multiple branches around New York City into the same account.

The account activity includes deposit activity into both savings and checking accounts.

The account activity includes incoming funds transfers at irregular intervals from small businesses located in New York.

The account activity includes frequent purchases of tickets to industry conferences and other events.

The account activity includes deposits made in multiple branches around New York City into the same account.

When the Financial Action Task Force (FATF) places a jurisdiction on the list of 'jurisdictions under increased monitoring', also known as the 'grey list', the jurisdiction:

Has committed to swiftly resolving the deficiencies identified in a FATF mutual evaluation.

Poses a high money laundering, terrorist financing, and proliferation financing risk and must be restricted from accessing the international financial system.

Accepts to participate in an off-cycle FATF mutual evaluation to be held within the next 12 months.

Must pay a fine to be removed from the list before the next FATF plenary.

Which of the following statements is true regarding the 2012 Financial Action Task Force (FATF) 40 Recommendations and/or 11 Immediate Outcomes?

The cornerstone of the 40 Recommendations is the adoption of a risk-based approach by each jurisdiction.

Each jurisdiction can reach out to the FATF for private access to the interpretive notes to the 40 Recommendations.

The 40 Recommendations have not been updated to reflect the impact of new technology.

The 11 Immediate Outcomes are recommendations specific to high-risk jurisdictions requiring enhanced monitoring.

Which suspicious activity may be the strongest indicator of money laundering through a casino?

A privately held company originates funds transfers through the casino into the betting accounts of multiple patrons.

A patron routinely places multiple bets on the same sporting events.

A patron purchases a large amount of chips at a blackjack table using cash.

A patron requests the casino to transfer their winnings to another gambling operator.

Which changes at a financial institution (FI) should trigger an enterprise-wide reassessment of its inherent AML risk exposure? (Select Three.)

Introduction of new products or services.

Use of new technologies for delivering existing products.

Introduction of new products or services.

Restructuring of the FI's risk and compliance functions.

Changes in the individuals overseeing the FI's product lines and sales strategies.

Use of new technologies for delivering existing products.

Which persons must always comply with all Office of Foreign Assets Control (OFAC) regulations? (Select Three.)

U.S. citizens regardless of location.

U.S.-incorporated entities and their foreign branches.

Permanent U.S. resident aliens regardless of location.

U.S. citizens regardless of location.

Non-U.S. financial institutions that offer accounts in USD regardless of location.

Merchants that offer U.S.-origin goods for sale regardless of location.

U.S.-incorporated entities and their foreign branches.

Permanent U.S. resident aliens regardless of location.

The Wolfsberg Group's AML Principles on Private Banking:

Advise banks to accept only those clients whose source of funds and beneficial ownership is understood.

Require banks to better manage reputational risk and protect the privacy of wealthy clients.

Establish rules for private bankers on how to deal with politically exposed persons (PEPs) and persons residing in high-risk countries.

Advise banks to accept only those clients whose source of funds and beneficial ownership is understood.

Assist financial institutions conducting business in jurisdictions with high data privacy standards in working with industries susceptible to money laundering.

ACAMS CAMS Practice Test 17 - Free Online Exam Prep & Questions

Findings from a regulatory examination report states that the job descriptions of personnel outside of the compliance department do not include references to anti-money laundering responsibilities.

Which action should the firm take?

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ACAMS CAMS Practice Test 17

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