Which of the following are risk factors a financial institution should examine when onboarding a new corporate customer? (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 of all employees of the new customer.

All the financial institutions where the new customer currently banks or has 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 measures help limit the collection and use of personal data when performing AML-related controls?

Implementing data minimization strategies to collect only the personal data necessary for transaction monitoring.

Regularly reviewing and updating data processing policies to ensure they align with industry standards.

Allowing unrestricted access to customer data across departments to facilitate quick decision-making.

Implementing data minimization strategies to collect only the personal data necessary for transaction monitoring.

Regularly reviewing and updating data processing policies to ensure they align with industry standards.

Allowing repurposing of collected data to avoid redundant processes.

Which information should be provided to the Board of Directors or a designated specialized committee when preparing a Suspicious Activity Report (SAR) report summary?

Statistical data regarding SARs filed during the reported period.

All possible details of SARs filed during the reporting period.

Copies of all 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.

According to the Financial Action Task Force (FATF) methodology, which situations would require a financial institution (FI) to consider filing a Suspicious Activity Report (SAR)?

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

A beneficiary of a transaction is a politically exposed person (PEP).

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

A transaction involves funds exchanged from crypto to fiat currencies.

An AML/CFT unit often compiles information about customer activity and product usage that might be of interest to other parts of the organization.Before allowing the unit to communicate such information internally, the organization must review:

Applicable data privacy laws in relevant jurisdictions and the organization's data security and privacy policies for any limitations.

Enterprise-wide risk assessments and the employee handbook for any limitations on sharing commercially sensitive customer data.

The risk rating of the customers to avoid sharing data relating to higher-risk customers.

The organization's AML compliance policies to ensure that customer data can be easily shared internally and internationally.

Which scenario best justifies why a financial institution (FI) might close a customer's account?

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

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.

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.

Restructuring of the FI's risk and compliance functions.

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.

What is the purpose of a Risk Appetite Statement (RAS) and its linkages while implementing organizational controls? (Select Two.)

An RAS sets limits for risk-taking by means of quantitative and qualitative metrics so that the business does not take up risk in excess of the organization's risk tolerance.

An RAS establishes a management-approved policy that identifies the organization's risk tolerances with strategic objectives, risk profile, and risk management capabilities.

An RAS formalizes a risk appetite statement from management and informs the Board of Directors on the risk assessment performed.

An RAS establishes a desired level of risk exposure in qualitative terms, covering all areas of compliance.

An RAS sets limits for risk-taking by means of quantitative and qualitative metrics so that the business does not take up risk in excess of the organization's risk tolerance.

An RAS establishes a management-approved policy that identifies the organization's risk tolerances with strategic objectives, risk profile, and risk management capabilities.

An RAS sets limits in terms of residual risk and thus is strongly intertwined with the efficacy of the system of internal controls.

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

Financial Intelligence Units (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).

What 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.

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.

Gatekeepers, including accountants, can be well-positioned to identify and detect changes in the type of work or the nature of a client's activities.In order to do so, they need to understand the risks associated with: (Select Two.)

The subject matter of requested services.

The seasoning of accounting clients.

The subject matter of requested services.

Short-term client relationships.

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

A privately held company originates fund 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.

The Basel Committee on Banking Supervision published guidelines on the 'Sound Management of Risks Related to Money Laundering and Financing of Terrorism.'With regard to identifying and accepting customers, it recommends that banks: (Select Two.)

Establish policies and procedures for customer due diligence that vary based on risk.

Establish policies and procedures to identify and verify customers, beneficial owners, and any individuals that can transact on behalf of their customers.

Establish policies and procedures for customer due diligence that vary based on risk.

Are prohibited from offering numbered accounts to customers, even if procedures are established to gather and maintain due diligence information.

Establish policies and procedures to identify and verify customers, beneficial owners, and any individuals that can transact on behalf of their customers.

Establish policies and procedures to ensure due diligence activities are identical for all customers.

Establish policies and procedures that encourage processing transactions while due diligence information is being established and verified.

The manager of a bank's KYC team discovers that a high-risk customer's activity was not reviewed last quarter as required by the bank's internal compliance schedule.What should the KYC team manager do?

Evaluate the KYC review process to understand why the review did not occur as required and take corrective action as necessary.

Submit a referral to file a Suspicious Activity Report (SAR).

Remove the customer from the bank's high-risk list.

Contact the customer's relationship manager to suspend account access until the periodic KYC review is completed.

Evaluate the KYC review process to understand why the review did not occur as required and take corrective action as necessary.

The goal of the Egmont Group of Financial Intelligence Units (FIUs) is to provide a forum for FIUs to: (Select Three.)

Improve global cooperation between FIUs.

Securely share sensitive information in the fight against money laundering and the financing of terrorism.

Establish an environment to foster trust among countries.

Improve global cooperation between FIUs.

Sign memoranda of cooperation that recognize and allow room for case-by-case solutions to specific problems.

Securely share sensitive information in the fight against money laundering and the financing of terrorism.

Propose legislation to combat financial crime, including money laundering and the financing of terrorism.

Establish an environment to foster trust among countries.

An AML analyst at a bank is investigating cases triggered by transaction monitoring alerts.Which circumstances might cause the analyst to suspect a case involves terrorist financing? (Select Two.)

Transactions involving non-profit organizations with no internet presence.

Small-dollar payments sent to higher-risk jurisdictions with no prior history.

Transactions involving non-profit organizations with no internet presence.

Small-dollar payments sent to crowdfunding initiatives with detailed descriptions of the project being financed.

Small-dollar payments sent to higher-risk jurisdictions with no prior history.

Transactions involving domestic non-profit organizations providing charitable aid to refugees from higher-risk countries.

Transactions involving structured currency deposits below the reporting threshold to avoid paying taxes.

A bank organized under foreign law and located outside of the U.S. maintains a correspondent banking relationship with a U.S.-based bank to handle financial transactions in U.S. dollars for its clients.In compliance with the USA PATRIOT Act of 2001, all U.S. banks and broker-dealers in securities must obtain a signed certification from all non-U.S. foreign bank clients conducting business with them.What information does the USA PATRIOT Act of 2001 require the foreign bank to certify to the U.S. bank? (Select Three.)

The ownership details of the foreign bank.

The jurisdictions in which the foreign bank maintains a physical presence.

The foreign bank will not allow indirect use of the correspondent bank accounts by shell banks.

The ownership details of the foreign bank.

The foreign bank will not allow indirect use of the correspondent bank accounts by Politically Exposed Persons (PEPs).

The jurisdictions in which the foreign bank maintains a physical presence.

The foreign bank's operations will be limited to the country of incorporation.

The foreign bank will not allow indirect use of the correspondent bank accounts by shell banks.

What is the importance of a risk-based approach (RBA) and building controls commensurate with risks?

An RBA allows organizations to adopt a more flexible set of measures and to use resources more effectively to control specific risks.

An RBA makes it easier for organizations to implement controls faster to counter all applicable risks.

An RBA is internationally accepted by customers and stakeholders, making it a more appropriate risk control mechanism.

An RBA more clearly dictates which resources are to be used to control an organization's overall residual risks.

An international bank is investigating a payment requested by one of its correspondent relationships that generated an alert in the automated transaction monitoring system.The payment originated from a corporation located in Hong Kong, and the final beneficiary is an individual in New York.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 practices are crucial for ensuring that an organization effectively limits the collection and use of personal data when performing AML-related controls?

Implementing data minimization strategies to collect only the personal data necessary for transaction monitoring.

Regularly reviewing and updating data processing policies to ensure they align with industry standards.

Allowing unrestricted access to customer data across departments to facilitate quick decision-making.

Implementing data minimization strategies to collect only the personal data necessary for transaction monitoring.

Regularly reviewing and updating data processing policies to ensure they align with industry standards.

Allowing repurposing of collected data to avoid redundant processes.

What are the most effective measures that can be taken to boost risk appetite awareness across an organization after a Risk Appetite Statement (RAS) has been set and a risk appetite framework has been drafted? (Select Three.)

Integrate the unalignment with risk appetite into internal reporting procedures.

Embed the risk appetite into everyday processes and governance.

Provide training to staff to understand the role risk appetite and its limits play for the safe conduct of business.

Integrate the unalignment with risk appetite into internal reporting procedures.

Train all managers to understand the importance and benefits of ''good'' risk-taking.

Describe risk controls for business colleagues.

Embed the risk appetite into everyday processes and governance.

Provide training to staff to understand the role risk appetite and its limits play for the safe conduct of business.

Which red flags could indicate increased terrorist financing and money laundering risks related to cultural objects and high-value art? (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.U S. FinCEN Guidance on Art and Antiquities Trade AML Risks

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 that has no activity in a tax haven jurisdiction.

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

A limited liability company incorporated in a foreign jurisdiction.

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

UN sanctions are the most effective and legitimate non-violent multilateral tools to respond to international security threats when they:

Are swiftly adopted by all member states together with a strong enforcement mechanism.

Can be implemented faster than other sanctions regimes.

Are swiftly adopted by all member states together with a strong enforcement mechanism.

Can be applied internationally while being enforced at the domestic level.

Are more clearly articulated than other sanctions regimes.

According to FinCEN, which red flags within a bank account may, taken together, be indications of modern slavery, human trafficking, and exploitation? (Select Two.)

Frequent payments for online advertisements or non-local classified ads.

Incoming fund transfers from third-party payment processors, with limited originator information.

Transactional activity with a registered virtual currency exchange.

Frequent payments for online advertisements or non-local classified ads.

Incoming fund transfers from third-party payment processors, with limited originator information.

Large amounts of cash payments to migrant agricultural workers.

Which of the following scenarios warrants enhanced due diligence (EDD)? (Select Three.)

A bank located in a higher-risk country trying to establish a correspondent-respondent banking relationship with a bank in a lower-risk country.

An individual with a current bank account who resides in one country becoming the ambassador of another country.

The current prime minister of a country trying to open a bank account in another country.

The former personal secretary to the minister of transport in a low-risk country 25 years ago opening a bank account at a bank in a neighboring low-risk country.

An existing local league footballer trying to open a bank account with a bank in their local jurisdiction.

A bank located in a higher-risk country trying to establish a correspondent-respondent banking relationship with a bank in a lower-risk country.

An individual with a current bank account who resides in one country becoming the ambassador of another country.

The current prime minister of a country trying to open a bank account in another country.

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

Mutual Legal Assistance Treaty.

Request for Urgent Information.

Section 319(a) of the USA PATRIOT Act:

Allows the appropriate federal banking agency to require a financial organization to produce, within 120 hours, records or information related to the organization's AML compliance or related to a customer of the organization or any account opened, maintained, administered, or managed in the U.S. by the financial organization.

Provides the U.S. Department of Treasury with the authority to apply graduated, proportionate measures against a foreign jurisdiction, foreign financial organization, type of international transaction, or type of account.

Permits the U.S. Government to seize funds from a correspondent bank account in the U.S. that has been opened and maintained for a foreign bank in the same amount as has been deposited with the foreign bank.

Requires due diligence, and in certain situations enhanced due diligence (EDD), for foreign correspondent accounts, which includes virtually all account relationships that organizations can have with a foreign financial organization and private banking for non-citizens of the U.S.

A team overseeing the governance and effectiveness of a bank's transaction monitoring approach should implement which strategies? (Select Two.)

Periodic and ad hoc cooperation with the legal team to appropriately investigate and monitor the transactions of subjects of subpoenas or government inquiries.

Periodic review of the transaction monitoring scenarios and their productivity to ensure that appropriate AML typologies are reflected.

Periodic review of suspicious activity reports (SARs) filed with FinCEN to determine whether any should be withdrawn.

Periodic and ad hoc cooperation with the legal team to appropriately investigate and monitor the transactions of subjects of subpoenas or government inquiries.

Periodic review of client profiles to ensure that the most up-to-date information is on file for high-risk clients in line with the bank's internal policies and procedures.

Periodic review of the transaction monitoring scenarios and their productivity to ensure that appropriate AML typologies are reflected.

A recruitment manager in the human resources department of a bank has shortlisted a candidate for the position of relationship manager in its private banking division.The bank's compliance policy requires proper background checks to protect against fraud and money laundering risks.Which resources would be most useful for identifying potential negative information regarding the shortlisted candidate? (Select Three.)

Internet and public media searches.

Personal references from close associates.

Internet and public media searches.

How can awareness be raised within countries that do not have sanctions regulatory regimes? (Select Two.)

AFC (Anti-Financial Crime) and sanctions-related seminars, webinars, and training within these countries.

Bilateral conversations and cooperation between governments.

Restrict trade between countries that have robust AML/CFT and sanctions regulatory regimes and those that do not.

AFC (Anti-Financial Crime) and sanctions-related seminars, webinars, and training within these countries.

Enforcement and pecuniary fines against these countries.

Bilateral conversations and cooperation between governments.

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?

Update all job descriptions to include anti-money laundering responsibilities

Respond that only compliance personnel have anti-money laundering responsibilities

Send an email to all staff stating that personnel must observe the anti-money laundering policy

Reply that a description of anti-money laundering responsibilities is included in the annual training

Which key metric would provide the most valuable data to senior management about the effectiveness of its 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.

As emphasized in the Basel Committee guidance for 'Sound Management of Risks Related to Money Laundering and Financing of Terrorism', the third line of defense (audit function) should:

Report to the audit committee of the board of directors to maintain independence.

Conduct AML audits no less often than every 12 months for consistency in annual reporting.

Report to the audit committee of the board of directors to maintain independence.

Remain independent from expressing opinions on the sufficiency of remediation or action plans to address findings and recommendations.

Be involved in the day-to-day operations of the AML program to immediately prevent control failures.

Which step should financial institutions 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.

An AML analyst at a financial institution is examining an alert generated by the automated transaction monitoring system to determine whether the alert should be escalated to the AML unit 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 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.

ACAMS CAMS Practice Test 19 - Free Online Exam Prep & Questions

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