A U.S. bank recently received a regulatory order to remediate its AML programs, which included several violations of law.What degree of accountability is it possible for the bank's senior management and employees to face?

The bank's designated AML compliance officer and senior management may face personal liability if they failed to take actions while aware of AML violations at the bank.

The bank's designated AML compliance officer is likely to face criminal prosecution because the bank received a regulatory order.

The bank's designated AML compliance officer is the only individual in the company's senior management team that can face personal liability for violation of AML laws.

The bank's designated AML compliance officer and senior management can face civil prosecution but not criminal prosecution for violation of AML laws.

Which statement regarding data privacy is the most accurate in the context of AML investigations?

FIUs should document purposes for which personal data included on Suspicious Activity Reports (SARs) may be shared with other agencies.

Any customer that is the subject of a suspicious report filing has the right to request redaction of their personal data.

Data privacy laws prohibit information sharing between financial institutions for the purposes of AML investigations in all jurisdictions.

Organizations are required to demonstrate that customers have opted into information sharing before submitting SARs to relevant Financial Intelligence Units (FIUs).

A legal instrument that is executed between two nations and governs cross-border information sharing is known as a:

Mutual legal assistance treaty.

A Financial Intelligence Unit (FIU) in a country has received a Suspicious Activity Report (SAR) involving significant suspicious fund transfers, both domestically and internationally. The FIU requires additional information from a foreign country to determine whether the matter needs to be referred for prosecution locally.Which of the following statements is true in this scenario?

Countries that are members of the Egmont Group can request assistance for information from each other.

Sovereignty of nations means that information cannot be accessed from foreign countries.

It is against international laws on data protection to access information from foreign countries.

Any information related to money laundering can be received from any organization at any time, regardless of jurisdiction.

Countries that are members of the Egmont Group can request assistance for information from each other.

Which of the following is a red flag indicating potential money laundering or terrorism financing through dealers of precious metals or high-value items?

A customer wants a handwritten receipt for a cash purchase of a high-end, limited-edition luxury watch.

A customer wants to purchase gold bars with a combination of cash and cryptocurrency.

A customer pays an antique dealer with a credit card for a high-value antique item.

A customer wants a handwritten receipt for a cash purchase of a high-end, limited-edition luxury watch.

A customer specifically requests to purchase a Kimberly Process-certified cut diamond.

An AML compliance officer receives an independent audit report with a number of findings.An appropriate response to the report would include:

Defining remedial actions based on the findings' root cause analysis.

Reperforming the testing for the controls mentioned in the findings to confirm the results of the audit.

Assigning responsibility for reviewing the action plan to the board of directors.

Drafting detailed action plans for the audit team to execute to close the findings.

Defining remedial actions based on the findings' root cause analysis.

A bank is preparing for a regulatory exam after a previous regulatory exam identified weaknesses in its AML program. Since the last exam, the bank has:Improved its written AML programHired an experienced AML compliance officerDemonstrated a stronger culture of complianceFocused on clearing its transaction monitoring case backlog and enhancing its sanctions screening programWhich of the following are correct? (Select Two.)

The bank may face the risk of regulatory orders to remediate its AML program despite addressing many of the previous concerns.

The bank may face civil or criminal penalties if it is unable to demonstrate sustained improvement in addressing the previous concerns.

The bank is likely to face secondary sanctions from global financial institutions despite addressing many of the previous concerns.

The bank is protected from reputational risk arising from any regulatory action because regulatory orders must remain confidential.

The bank may face the risk of regulatory orders to remediate its AML program despite addressing many of the previous concerns.

The bank may face civil or criminal penalties if it is unable to demonstrate sustained improvement in addressing the previous concerns.

The regulatory agency may require the bank's board of directors to publicly share the actions taken to address the previous concerns in order to limit its reputational risk.

What are the roles of a government Financial Intelligence Unit (FIU)? (Select Three.)

Analyze all suspicious transaction and suspicious activity reports received from reporting institutions or obliged institutions.

Disseminate the analysis of suspicious transaction and suspicious activity reports to local law enforcement agencies and foreign FIUs to combat money laundering.

Receive reports of suspicious transactions and suspicious activities from reporting institutions or obliged institutions.

Investigate and, where appropriate, prosecute all suspicious transaction and suspicious activity reports received from reporting institutions or obliged institutions.

Analyze all suspicious transaction and suspicious activity reports received from reporting institutions or obliged institutions.

Disseminate analysis of suspicious transaction and suspicious activity reports to foreign judicial systems to enhance their anti-money laundering and terrorist financing investigations and prosecutions.

Disseminate the analysis of suspicious transaction and suspicious activity reports to local law enforcement agencies and foreign FIUs to combat money laundering.

Receive reports of suspicious transactions and suspicious activities from reporting institutions or obliged institutions.

A U.S. bank recently received a regulatory order to remediate its AML programs, which included several violations of law.What degree of accountability is it possible for the bank's senior management and employees to face?

The bank's designated AML compliance officer and senior management may face personal liability if they failed to take actions while aware of AML violations at the bank.

The bank's designated AML compliance officer is likely to face criminal prosecution because the bank received a regulatory order.

The bank's designated AML compliance officer is the only individual in the company's senior management team that can face personal liability for violation of AML laws.

The bank's designated AML compliance officer and senior management can face civil prosecution but not criminal prosecution for violation of AML laws.

An AML compliance officer is drafting plans to address deficiencies identified in an independent audit.Which approach is the best option?

Draft action plans that will take many months to fully implement to address the root cause of the deficiencies.

Draft action plans in consultation with the jurisdiction's FIU to remain aligned with other similar companies.

Only commit to action plans that can be implemented and closed within the three-month management reporting cycle.

Draft action plans that will take many months to fully implement to address the root cause of the deficiencies.

Only commit to action plans that require no new investment to maximize shareholder value.

An employee in a corporation's finance department hears news of an internal investigation into potential fraud within the company, quits their job, and disappears.If they had been observed before their resignation, which characteristics of the employee would have been considered red flags? (Select Two.)

The employee was constantly evasive about the reasons for leaving their previous corporate finance job.

The employee had a lavish lifestyle for their income.

The employee was constantly evasive about the reasons for leaving their previous corporate finance job.

The employee was originally from a high-risk jurisdiction.

The employee had friends in high-risk industries.

The employee had a lavish lifestyle for their income.

Which statement is the most accurate in describing who must comply with Office of Foreign Assets Control (OFAC) sanctions?

All U.S. citizens and permanent residents regardless of where they are located, all U.S.-incorporated entities and their foreign branches, and all individuals and entities within the United States.

All U.S. citizens and permanent residents regardless of where they are located, all U.S.-incorporated entities excluding their foreign branches, and all individuals and entities within the United States.

All U.S. citizens except those with dual nationality, U.S. permanent residents, all U.S.-incorporated entities, and all individuals within the United States.

All U.S. citizens and permanent residents while located in the U.S., all U.S.-incorporated entities and their foreign branches, and all individuals within the United States.U S. Sanctions Compliance Framework by OFAC

A newly appointed senior money laundering reporting officer (MLRO) at a digital bank has been instructed to implement an effective AML transaction monitoring system.What are important considerations for selecting and implementing the AML system? (Select Two.)

Whether the monitoring system is adequate with respect to the bank's size, activities, complexity, and risks.

Whether the monitoring system can be configured to enable the bank to execute trend analysis of transaction activity and to identify unusual business relationships and transactions.

Whether the monitoring system is adequate with respect to the bank's size, activities, complexity, and risks.

Whether the vendor has documented appropriate internal controls for designing the system and data integration schema.

Whether the permissions and user access settings for reviewing, investigating, and reporting details of alerts generated by the system are commensurate with those in use at other banks.

Whether the monitoring system can be configured to enable the bank to execute trend analysis of transaction activity and to identify unusual business relationships and transactions.

A Financial Intelligence Unit (FIU) in a country receives a SAR involving potential money laundering. The FIU wants to share this information with a foreign FIU.Which mechanism allows secure information sharing between FIUs?

Mutual Legal Assistance Treaty (MLAT)

Which operational situation might indicate that money laundering is occurring at or through a deposit-taking financial institution?

The institution has observed an increase in customer demand for large-denomination banknotes.

The institution has observed an increase in the adoption of its digital products and services.

The institution has observed a reduced settlement time in the transaction services that support the rapid movement or remittance of funds.

The institution maintains a sequentially numbered log of the monetary instruments it sells.

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.

Which practices should financial institutions (FIs) adopt for the process of terminating customer relationships? (Select Three.)

Implementing a standardized procedure for customer termination that includes risk assessments and necessary documentation.

Performing a final review of a customer's transaction history and records to address any unresolved issues prior to termination.

Keeping records of the termination process, including the justification for the decision and any correspondence with the customer.

Utilizing a flexible communication style that adapts to different customer situations during the termination process.

Implementing a standardized procedure for customer termination that includes risk assessments and necessary documentation.

Performing a final review of a customer's transaction history and records to address any unresolved issues prior to termination.

Keeping records of the termination process, including the justification for the decision and any correspondence with the customer.

Notifying the customer of the termination decision only after completing the termination process to prevent possible disputes.

Which of the following scenarios best justifies why a customer's account might be closed by a financial institution?

The account has transactions that triggered multiple suspicious activity reports (SARs).

The account shows periodic fixed amount remittances for tuition fees.

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

The customer is the object of a civil subpoena.

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.

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

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

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

Which of the following are key metrics that provide valuable data to senior management about the effectiveness of an FI's AML controls?

The ratio of true positives to false positives generated by the automated monitoring system.

The number of money laundering alerts generated by the watchlist screening system.

The number of clients exited for commercial reasons.

The number of high-risk customers onboarded each month.

The ratio of true positives to false positives generated by the automated monitoring system.

A bank in the Netherlands has been requested to share information about a series of transactions and related customers with a bank in Italy. Both banks are subject to European Union jurisdiction.Which factor is the most important to consider before the Dutch bank shares the requested information with the Italian bank?

The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate, in line with applicable laws and regulations.

The Dutch bank's legal obligations to protect customer privacy and bank secrecy prohibit it from sharing any such information.

The Dutch bank should require a production order from the Italian bank and receive approval from its legal department before sharing the requested information.

The need to fight financial crime outweighs the EU's data protection and privacy regulations.

The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate, in line with applicable laws and regulations.

Which of the following are money laundering red flags when reviewing business operations of a money services business (MSB)? (Select Two.)

A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.

A customer using multiple accounts under different names to conduct transactions.

A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under the reporting threshold.

Cash-intensive businesses, such as convenience stores or restaurants, making large cash deposits.

A customer completing frequent small-dollar international money transfers to their native country.

A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.

A customer using multiple accounts under different names to conduct transactions.

When a government imposes economic sanctions on a target, the purpose is to:

Alter the behavior of the state or non-state target that threatens the interests of that government or violates international norms.

Indicate that the use of military force is likely unless the target complies with the government's interests.

Encourage non-governmental organizations (NGOs) to increase the provision of humanitarian and charitable aid to the target.

Protect the rights of the citizens of the target country against their own government and improve financial stability in the region.

Alter the behavior of the state or non-state target that threatens the interests of that government or violates international norms.

From an international standards perspective, both the EU and FATF consider data sharing a crucial component of effective anti-money laundering measures because data sharing:

Promotes financial transparency and protects the integrity of financial systems.

Allows Financial Intelligence Units (FIUs) to enact sanctions against perpetrators of financial crime.

Helps financial institutions to be more effective in fighting crime with data analysis.

Needs to be approved by the FIU before sharing between financial institutions.

A Financial Intelligence Unit (FIU) in a country has received a SAR involving significant suspicious fund transfers, not only within its jurisdiction but also in a foreign country. Further information is required from the foreign country to determine whether the matter needs to be referred for prosecution locally.Which of the following statements is true in this scenario?

Countries that are members of the Egmont Group can request assistance for information from each other.

Sovereignty of nations means that information cannot be accessed from foreign countries.

It is against international laws on data protection to access information from foreign countries.

Any information related to money laundering can be received from any organization at any time, regardless of jurisdiction.

Countries that are members of the Egmont Group can request assistance for information from each other.

Which of the following activities are considered money laundering red flags when reviewing business operations of a money services business (MSB)? (Select Two.)

A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.

A customer using multiple accounts under different names to conduct transactions.

A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under the reporting threshold.

Cash-intensive businesses, such as convenience stores or restaurants, making large cash deposits.

A customer completing frequent small-dollar international money transfers to their native country.

A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.

A customer using multiple accounts under different names to conduct transactions.

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.

A bank in the Netherlands has been requested to share information about a series of transactions and related customers with a bank in Italy. Both banks are subject to European Union jurisdiction.Which factor is most important to consider before the Dutch bank shares the requested information with the Italian bank?

The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate, in line with applicable laws and regulations.

The Dutch bank's legal obligations to protect customer privacy and bank secrecy prohibit it from sharing any such information.

The Dutch bank should require a production order from the Italian bank and receive approval from its legal department before sharing the requested information.

The need to fight financial crime outweighs the EU's data protection and privacy regulations.

The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate, in line with applicable laws and regulations.

Which risk factors should a financial institution (FI) examine for a new corporate customer intending to open a bank account? (Select Three.)

The type of business the corporate customer is engaged in.

The identity of senior managing officials and all individuals authorized to operate the account.

The country or location where the customer is from or conducts business.

The type of business the corporate customer is engaged in.

The employment profiles and information of all employees of the new customer.

All the financial institutions where the new customer currently banks or banked previously.

The identity of senior managing officials and all individuals authorized to operate the account.

The country or location where the customer is from or conducts business.

Which of the following indicates potential money laundering activity by a lawyer?

A lawyer's trust account regularly receives wire transfers from unknown remitters from a higher-risk country and immediately transfers the same amount of funds to a known beneficiary's account in a low-risk country.

A lawyer located in a higher-risk country deposits their firm's bank draft issued from their trust account to another lawyer's trust account located in a low-risk country for legal services rendered.

A lawyer's trust account receives a large-value wire transfer from a regulated insurance company and immediately transfers the same amount of funds received to the beneficiary's bank account in a low-risk country.

A lawyer's trust account receives a large wire transfer deposit from a client that wanted to purchase a piece of property and then transfers the same amount to the property seller's lawyer's trust account.

Which of the following are key AML measures that a regulated asset management company in the European Union (EU) should implement? (Select Two.)

Performing negative news checks of prospective customers.

Understanding the source and origin of assets.

Performing negative news checks of prospective customers.

Rejecting any politically exposed persons (PEPs) as customers.

Inviting prospective customers for an onboarding interview.

Understanding the source and origin of assets.

Producing financial stability reports on interesting customers.

Which practices should financial institutions (FIs) adopt when determining the timeline for completing an internal AML investigation and filing a Suspicious Activity Report (SAR) to the 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.

Which of the following is a core function of a Financial Intelligence Unit (FIU) as described in FATF Recommendation 29?

Serving as a national center for the collection and analysis of suspicious activity.

Prosecuting significant cases of money laundering or terrorist financing under national jurisdiction.

Sponsoring the research and development of advanced technological surveillance tools for AML investigations.

Sharing real-time criminal intelligence gathered from national law enforcement agencies with the private sector.

Which measures should financial institutions (FIs) take when complying with sanctions requirements?

Adopt automatic screening systems to detect designated persons and entities.

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

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

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

Which of the following statements best describes the role of the Board of Directors in overseeing an institution's AML governance and compliance framework, according to the Basel Committee on Banking Supervision?

The Board of Directors should establish a compliance function and approve the bank's policies for identifying, assessing, monitoring, reporting, and advising on compliance risk.

The compliance function should report directly to the CEO concerning the bank's compliance with applicable laws, rules, and standards and only update the Board of Directors on the bank's efforts in managing compliance risk when required.

The compliance function must have sufficient authority, stature, independence, and resources to be effective on its own and should not have access to the Board of Directors.

The Board of Directors should be responsible for overseeing the management of the bank's compliance risk but not be involved in establishing a compliance policy that explains the processes by which compliance risks are to be identified and managed throughout the organization.

The Board of Directors should establish a compliance function and approve the bank's policies for identifying, assessing, monitoring, reporting, and advising on compliance risk.

A financial institution (FI) is conducting a complex investigation of unusual patterns of activity involving multiple businesses, triggered by an automated monitoring system alert.Which techniques would be most efficient for conducting the investigation? (Select Two.)

Perform a control and ownership assessment of the businesses involved, using the information available in the client files.

Contact the account manager and ask for the reasons behind the patterns of activity highlighted in the AML alerts.

Perform a control and ownership assessment of the businesses involved, using the information available in the client files.

Contact local law enforcement and request that they assist in the analysis and investigation.

Contact the account manager and ask for the reasons behind the patterns of activity highlighted in the AML alerts.

Review the information presented in the automated monitoring system's alert description and decline any future transactions.

Use social media platforms to connect with the businesses and request details about the account activity.

ACAMS CAMS Practice Test 18 - Free Online Exam Prep & Questions

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