What does designing a country as being of ''prime money laundering concern'' allow the U.S. government to do?

Close some or all correspondent or payable-through accounts

Obtain transactional information from U.S.-owned subsidiary banks located outside the U.S.

Close some or all correspondent or payable-through accounts

Ensure the inclusion of that country onto FATF's Non-Cooperative Country and Territory list

Ensure the inclusion of that country into the office of Foreign Asset Control country sanctions programs

What are three elements of a sound Customer Due Diligence Program?

Determination of what type of customer the financial institution will accept

Training as to how and to what extent to identify prospective customers

Obtaining date of birth and address of a prospective customer

Determination of what type of customer the financial institution will accept

Training as to how and to what extent to identify prospective customers

Obtaining date of birth and address of a prospective customer

Determination of who in the institution should be assigned to the prospective customer as a liaison

On who does the ultimate responsibility for an institution's anti-money laundering program rest?

The institution's Board of Directors

The designated AML Compliance Officer

The institution's Board of Directors

All employees with customer contact

The government regulator examining the AML program

Which statement about U.S. Specified Unlawful Activities (SUA) is true?

At least one SUA must be proven in order to pursue a money laundering conviction

SUAs are generally limited to a small sub-set of crimes

In order to secure a conviction, the defendant must be proven to have known the precise nature of the source of funds

SUAs are limited to crimes that occur within the borders of the U.S. and its territories and possessions

An anti-money laundering specialist has been asked to create internal anti-money laundering policies, procedures and controls for a recently chartered offshore financial institution.Which three should be included? Choose 3 answers

A training program for senior management and staff

An anti-money laundering compliance program, internal audit program, and procedure manual

Compliance requirement of host and charting countries

Basel Committee on Banking Supervision's capital adequacy requirements for the host country

A training program for senior management and staff

An anti-money laundering compliance program, internal audit program, and procedure manual

Compliance requirement of host and charting countries

A customer comes into the bank and appears to be ill-at-ease waiting in the teller line. When the customer gets to the teller, he become exceedingly nervous and asks for a large cashier's check to be cashed and disbursed to him in $100 bills.What should the teller do after completing the transaction?

Monitor the customer's account going forward

Confer with the bank' s account going forward

Monitor the customer's account going forward

File a CTR on the customer by the end of the day

Which three elements should be considered in an institution's enhanced due diligence process to assure itself that it has secured sufficient understanding of its higher risk respondent bank customers according to the Wolfsberg Principles on Correspondent Banking?

The quality of the respondent's AML and client identification controls

A risk-based determination as to whether or not the respondent is a shell bank

Whether a Politically Exposed Person (PEP) has an interest or management role in the respondent

The quality of the respondent's AML and client identification controls

A risk-based determination as to whether or not the respondent is a shell bank

Whether a Politically Exposed Person (PEP) has an interest or management role in the respondent

The sources of wealth for all significant ownership interests

With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

Local Financial Intelligence Unit

A compliance officer is conducting a review of the automated transaction monitoring system. What would be most likely to result in a change in the monitoring system parameters?

The national Financial intelligence Unit issues new risk indicators

The local paper runs stories that sully the institution's reputation in the marketplace

Law enforcement issues a subpoena for a particular customer's account records

The national Financial intelligence Unit issues new risk indicators

The institution's creditworthiness thresholds change

Which three do the Office of Foreign Asset Control regulations cover? Choose 3 answers

All persons and entities within the U.S.

All U.S.-domiciled entities and their foreign branches

All persons and entities within the U.S.

All U.S.-domiciled entities and their foreign branches

All foreign-based entities that have U.S. customers

Which statement is true about when an institute becomes aware that a particular employee is under investigation by law enforcement as a result of a subpoena or warrant?

If an independent investigation provides grounds to interview the employee, they can be interviewed and, if necessary, terminated buy not advised that they are under investigation

Under no circumstances can the employee be interviewed by the institution without the consent of law enforcement for fear of tipping the employee off

If an independent investigation provides grounds to interview the employee, they can be interviewed and, if necessary, terminated buy not advised that they are under investigation

The employee can and should be interviewed, as well as notified of the investigation to demonstrate the seriousness of the offence and to get the employee's full attention and cooperation

The institute has a duty as an employer to inform the employee he or she is under investigation by law enforcement, buy must not inform them that a warrant or subpoena has been received

In relationship to life insurance business, the third European Directive states that Member States may allow the identity verification of the beneficiary under the policy after the business relationship has been established, but before which events?

At or before the time of payout or before the beneficiary intends to exercise rights vested under the policy

At or before a premium payment has been accepted for the policy purchased

At or before the policy is issued to the beneficiary by the insurance company

At or before the time of payout or before the beneficiary intends to exercise rights vested under the policy

At or before 30 days of the relationship being established under the policy

What was the topic the Wolfsberg Group's first guidance addressed?

Enhanced due diligence for high risk customers

AML training for financial institution staff

What is an indicator of suspicious activity?

Large and frequent credit balances on a credit card resulting in request for refunds

A customer who pay back a late loan all at once after collecting on a bad debt

A convenience store that brings in $20s and $10s and requests small bills and change

Large and frequent credit balances on a credit card resulting in request for refunds

An online retailer that uses a third-party payment processor to facilitate its transactions

What is the primary action a financial institution should take before formulating its anti-money laundering program?

It should perform a comprehensive risk analysis

It should determine how extensive and well-trained the compliance staff is

It should consult with its correspondent banks to determine the nature and extent of their AML programs

It should ensure that its training modules for all employees cover all relevant AML issues

When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

The institution should consult its counsel and AML compliance officer and determine whether closing the account is in accord with the institution's procedures

The institution should close the account due to the obvious risk it represents

The institution should keep the account open due to the need to continue to monitor the account

The institution should consult its counsel and AML compliance officer and determine whether closing the account is in accord with the institution's procedures

The institution should not close the account due to the risk of tipping off the customer and upsetting the criminal investigation

What are three factors a financial institution should examine with regard to a new customer who is opening up a new account? Choose 3 answers

The country or location where the customer is from or does business

The type and size of the business the customer runs

The legal structure of the customer's business

The country or location where the customer is from or does business

The type and size of the business the customer runs

The legal structure of the customer's business

The previous financial institutions where the customer has banked

What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S. banks under the Patriot Act? Choose 3 answers

Cancellation of correspondent banking relationships

Forfeiture of funds in a U.S. interbank account

Prohibition of correspondent accounts for shell banks

Cancellation of correspondent banking relationships

Forfeiture of funds in a U.S. interbank account

Prohibition of correspondent accounts for shell banks

U.S. residents maintaining private banking accounts

A client who owns a swimming pool company requests to open 19 accounts at a bank, each with a debit card for its swimming pool technicians. When asked about the purpose of each account, the client explains that each technician needs a separate checking account to purchase pool chemicals.Which available source could be used in the bank's internal investigation on this client's activities?

Internet search showing how such business are typically operated

Local law enforcement investigation report

Interview swimming pool technicians and chemical suppliers

Internet search showing how such business are typically operated

A bank sells reloadable open-loop prepaid cards to both customers and non-customers.What is a red flag associated with these cards that may indicate money laundering?

A non-bank customer regularly loads large amounts of cash onto several prepaid cards.

A bank customer historically purchases several prepaid cards near year-end.

A non-bank customer regularly loads large amounts of cash onto several prepaid cards.

A non-bank customer consistently uses the bank to obtain cash advances using a prepaid card.

A bank customer routinely purchases five prepaid cards in small even-dollar amounts on a monthly basis.

A compliance officer at a large financial institution has been tasked by senior management to lead a team in an internal review and potential revision of the institution's customer onboarding program following a regulatory enforcement action of another institution.Which step should the compliance officer perform first?

Reviewing the institution's risk assessment

Revising training materials for frontline staff

Conducting enhanced due diligence on high risk customers

Resolving substantive discrepancies in customer verification

A bank provides trade financing for a company whose primary export is steel.Which action by the company indicates possible money laundering?

The company regularly understates the value of goods exported.

The company often deals with foreign currency exchanges.

The company regularly understates the value of goods exported.

The company frequently sells above or below its competitors' price.

The company frequently transfers funds to other bank accounts located in other jurisdictions.

An anti-money laundering analyst is reviewing a new customer list to confirm potentially high risk customers have been identified and subject to enhanced due diligence.Which new customer warrants enhanced due diligence?

A medical practice limited partnership

Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?

Local privacy and data protection laws may prevent an affiliate from sharing information.

Certain account documents may be stored only in local language which will prohibit a global assessment.

The institution should consult with the customer and request permission to conduct a full investigation into all the accounts.

Enterprise-wide compliance oversight rules issued in the global institution's headquarters country will override any local limitations in other countries.

Which step should be taken to understand the types of financial institutions to whom the services are being offered when a correspondent bank permits ''nested'' relationships according to the Wolfsberg Group?

Evaluate the distribution of downstream correspondents and identify any direct or indirect issues

Review peer-group clients by risk category

Understand the type and volume of accounts serviced

Evaluate the distribution of downstream correspondents and identify any direct or indirect issues

Obtain independent audits or examination reports for ''nested'' relationships to determine risk levels

What does the Basel Committee's Customer Due Diligence for Banks paper suggest that a bank needs to have in place when establishing an account for a corporate business entity?

An understanding of the structure of the company

A policy requiring all identified beneficial owners to undergo a national police check

A process to ensure that the approval of senior management is obtained prior to opening the account

A fee structure that reflects the banks' costs in monitoring the risks associated with entity's business activities

Which measure to mitigate risk does the Basel Committee's Customer Due Diligence Principles suggest banks apply when accepting business from non-face-to-face customers?

Certification of documents presented

Requiring an in person interview with the customer

Imposing a limit on permissible account activity for a defined period of time

Requiring additional review of account opening documents by senior management

A comprehensive set of risk-based guidelines for maintaining business relationships is being developed.Which situation indicates that the institution should terminate the relationship with a client?

The client exceeds the criteria of an acceptable risk model created by the institution and does not perform acceptable remedial actions.

The client does business in countries with active terrorist organizations.

The client conducts international financial transactions exceeding U.S. $500 million.

The client exceeds the criteria of an acceptable risk model created by another institution that is not similar in size and complexity.

The client exceeds the criteria of an acceptable risk model created by the institution and does not perform acceptable remedial actions.

At a small community bank, the compliance officer identifies unusual activity on a customer, who with his personal and company accounts, is the bank's largest depositor. The customer's companies have significant balances on their outstanding loans. The compliance officer notices that there is a lot of unusual movements of money between the customer's individual and business accounts. After filing a suspicious transaction report (STR), the compliance officer gets a call from law enforcement indicating that they want the bank to keep the account open while they conduct an investigation into the customer.How should the compliance officer escalate this information to the board of directors?

By providing a high level summary of the activity and the interactions with law enforcement

By providing a copy of the STR to the board

By informing the regulator to bring it up with their next meeting with the board

By providing a high level summary of the activity and the interactions with law enforcement

By providing a copy of the letter from law enforcement asking the bank to keep the account open.

What does the Egmont Group's support for its members include?

Expanding and systematizing international cooperation in the reciprocal exchange of information

Issuing due diligence models for financial institutions

Expanding and systematizing international cooperation in the reciprocal exchange of information

Issuing strategic products for law enforcement agencies and FIUs on topics of international interest

Expanding the ability of FIUs to enforce laws and exchange information globally to combat money laundering and terrorist financing

Which statement identifies one of the duties of a government Financial Intelligence Unit?

It serves as the central agency for the receipt of disclosures filed by reporting entities.

It administers and enforces economic and trade sanctions based on a government's foreign policy and national security goals.

It supervises and regulates banking institutions to ensure the safety and soundness of the nation's banking and financial system.

It prosecutes suspected money launderers and terrorist financiers based on financial institution suspicious transaction report filings.

A new accounts representative recently opened an account for individual whose stated employment is tutoring students.Which customer action indicates possible money laundering?

Transferring all funds to another bank on the same day of large cash deposits

Continually making weekly small cash deposits

Periodically initiating wire transfers to another account owned by a relative

Transferring all funds to another bank on the same day of large cash deposits

Opening a savings account and makes frequent transfers from the checking account

ACAMS CAMS Practice Test 6 - Free Online Exam Questions 201-240

A junior account manager within an international private bank in Country A was asked by one of his valued customers, who has held an account for several years in the institution, about depositing a large sum of cash into her account. The junior account manager informed his customer that his bank does not accept cash. The junior account manager later reviewed a customer activity report and noticed a number of smaller dollar wires from banks in neighboring Country B, which has lax currency controls, that totaled about as much as the customer intended to deposit.

What should the junior account manager do?

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