Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

Issue country-specific Mutual Evaluation reports

Identify jurisdictions with weak AML/CFT regimes

Issue country-specific Mutual Evaluation reports

Address AML/CFT technical assistance of individual members

Identify jurisdictions with weak AML/CFT regimes

Establish AML/CFT standards and typologies

Protect the reputation and standing of FATF

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

Payments received on the account reference unknown companies in the instructions.

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

Payments received on the account reference unknown companies in the instructions.

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

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

Under the USA PATRIOT Act, in which scenario would the US not have jurisdiction?

Shell banks operating in foreign jurisdictions

US bank subsidiaries located in foreign jurisdictions

Foreign branch of a bank located in the US

Foreign bank with a US correspondent account

Shell banks operating in foreign jurisdictions

FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:

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

conducting the risk assessment of products and services.

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

identifying the products and services and their suitability to customers.

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

What are four key elements that a KYC program should contain according to the Basel Committee requirements?

Customer identification, risk assessment, customer screening, monitoring

Customer onboarding, sanction monitoring, customer acceptance, customer due diligence

Customer identification, risk assessment, customer screening, monitoring

Customer onboarding, risk monitoring, customer acceptance, enhanced due diligence

Customer identification, risk management, customer acceptance, monitoring

A Money Laundering Reporting Officer's (MLRO) lack of action led to deficiencies in the bank's AML program and a civil monetary penalty being levied against the MLRO. Why was this direct action taken against the MLRO?

MLROs can be held to an individual accountability standard and face potential penalties for contributing to AML program deficiencies.

The MLRO is the only individual that can be held responsible for AML program deficiencies.

MLROs can be held to an individual accountability standard and face potential penalties for contributing to AML program deficiencies.

The MLRO agreed to the civil penalty so that the bank would not be found liable for the AML program deficiencies.

Action was brought against the MLRO because banks cannot be found liable for AML program deficiencies.

Which is a key goal of EU Directives on money laundering?

Establish a consistent regulatory environment across the EU to prevent money laundering

Address control of payments in EU countries to reduce money laundering

Allow member states to discuss the draft legislation with the cooperation of the EU Financial Intelligence Units (FIUs)

Build a network of financial institutions (FIs) that work together to prevent money laundering across the EU

An AML training program should include which requirement?

New staff should receive training during employee orientation or shortly thereafter on bank procedures.

New tellers should receive training after their first year on the identification of suspicious or unusual activity.

New lending staff should receive annual training on the preparation of currency transaction reporting.

New staff should receive training during employee orientation or shortly thereafter on bank procedures.

New operational staff should receive training shortly after hire on currency transaction reporting exemptions.

Which statement best describes a key aspect of the AML Directive of the EU regarding business relationships and transactions with high-risk third countries?

Obliged entities should implement additional mitigating measures complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach.

Obliged entities should voluntarily consider the implementation of increased external audit requirements for branches and subsidiaries located in high-risk countries.

Obliged entities, in accordance with the member state regulations, should determine at a national level the measures that can be used for enhanced due diligence.

Obliged entities should implement additional mitigating measures complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach.

Obliged entities should not take into account specific circumstances when performing enhanced due diligence measures.

Enhanced due diligence (EDD) may be bypassed for which situation?

On-boarding a casino headquartered in the EU or US that is part of an international hotel chain, provides less than 50% of overall revenue and that fully complies with group-wide policies and procedures.

On-boarding a branch or majority-owned subsidiary of an EU or US FI located in a high-risk third country that fully complies with group-wide policies and procedures.

On-boarding a subsidiary in a high-risk country with a complex ownership structure of a long-standing and reputable customer based in the EU or US.

On-boarding a casino headquartered in the EU or US that is part of an international hotel chain, provides less than 50% of overall revenue and that fully complies with group-wide policies and procedures.

On-boarding a reputable Politically Exposed Person (PEP) from the EU onto the wealth management arm of a US financial institution (FI).

What core objective does the Egmont Group suggest would lead to an effective national Financial Intelligence Unit (FIU)?

The FIU must have absolute trust amongst national and international stakeholders before sensitive information will be exchanged with confidence.

The FIU must operate from physically separated premises from other law enforcement agencies and government offices.

The FIU meets the Egmont Group assessment criteria.

The FIU must have absolute trust amongst national and international stakeholders before sensitive information will be exchanged with confidence.

The FIU must be able to promote the value of the government's commitment to embed a corruption free society within the country.

A new AML Officer for a US-based money service business (MSB) is drafting procedures around types of activity that require further review. Which should be included? (Choose two.)

A customer visiting multiple branches of the MSB on the same day in order to transfer funds internationally.

A customer attempting to buy money orders under $3,000 USD in cash multiple times a day.

A customer visiting multiple branches of the MSB on the same day in order to transfer funds internationally.

A customer buying several money orders totaling over $10,000 USD using debit card on the same day using government-issued identification.

A customer sending funds to a family member living in a high-risk jurisdiction that is subject to civil unrest.

A customer buying multiple money orders for $250 totaling $2,000 USD.

A customer attempting to buy money orders under $3,000 USD in cash multiple times a day.

Which is a key role of FATF-Style Regional Bodies (FSRBs)?

Support the system of mutual evaluation

Setting regional standards for combatting money laundering

Bring additional terrorist financing laws into action in the region

Enforce the specific FATF laws in the region

When implementing a risk-based approach related to casinos, which risks are related to the customer as an individual? (Choose two.)

Customer from a high-risk country

Improper use of third parties as customers

Customer from a high-risk country

Use of casino deposit accounts by the customer

A financial institution (FI) is being investigated for possible money laundering. When cooperating with law enforcement agencies, which additional steps should the FI ensure are taken? (Choose two.)

Centralized control is maintained over all requests and responses to ensure completeness and timely responses.

Subpoenas and other information requests should be reviewed by senior management and an investigations group or counsel.

Centralized control is maintained over all requests and responses to ensure completeness and timely responses.

Make employees, including corporate officers, unavailable for interviews and refuse documents upon receipt of a subpoena.

Subpoenas and other information requests should be reviewed by senior management and an investigations group or counsel.

Address the document destruction policy to ensure the relevant documents are destroyed.

Inquiries from the media are not answered directly, but rather are addressed by replying, 'No comment.'

When should a financial institution (FI) exit a relationship? (Choose two.)

The suspicious conduct of the account holder

The FI's stated policies and procedures for closing an account

The reputational risk to the FI posed by closing the account

The request from law enforcement to close the account

The FI's requirements for opening an account

The suspicious conduct of the account holder

The FI's stated policies and procedures for closing an account

Which statement is true regarding the FATF standards for SARs/STRs information sharing within a financial group?

Financial institutions (FIs) should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.

FIs must retain copies of SARs/STRs and supporting documentation for five years from the date of filing the STRs

FIs cannot share customer information at all since it is confidential.

Financial institutions (FIs) should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.

FIs must require approval from regulators to share SARs/STRs information and supporting documentation.

Which statements regarding the USA PATRIOT ACT best describe key aspects that have extraterritorial reach? (Choose three.)

It allows for the US Attorney General to subpoena records from a foreign bank with US correspondent accounts, including those that are located outside the US.

It allows foreign banks to voluntarily designate a registered agent in the US to accept service of subpoenas.

It allows the Secretary of the Treasury to order a US financial institution (FI) to close a correspondent account when a subpoena has not been responded by a foreign bank in a timely manner.

It allows for the US Attorney General to subpoena records from a foreign bank with US correspondent accounts, including those that are located outside the US.

It allows foreign banks to voluntarily designate a registered agent in the US to accept service of subpoenas.

It allows the Secretary of the Treasury to order a US financial institution (FI) to close a correspondent account when a subpoena has not been responded by a foreign bank in a timely manner.

It obliges the government to trace the origin of the funds when a seizure of assets occurs in a correspondent account that has been opened and maintained for a foreign bank in the US.

It excludes as foreign FIs businesses that would be considered broker-dealers, money transmitters, and currency exchangers.

It allows federal banking supervisors to require records of the identity of the owners of a foreign bank from a Fl operating in the US.

The ultimate goal of economic sanctions is to:

protect the reputation of the country.

prevent terrorists from profiting from trade.

reduce the profits of sanctioned countries.

Why do organized crime groups often use front companies? (Choose two).

Because using multiple front companies can make it easier to control an entire sector of the economy.

Because they can use the company's bank accounts to comingle deposits with those of legal businesses.

Because they are not registered, front companies are not subject to income and other sales taxes.

Because using multiple front companies can make it easier to control an entire sector of the economy.

Because they are generally subject to lighter due diligence requirements by banks and other financial services providers.

Because front companies generally charge higher prices than legitimate companies, so profit margins are higher.

Because they can use the company's bank accounts to comingle deposits with those of legal businesses.

Which unusual or suspicious activity by a financial institution's (FI's) employee requires additional investigation and scrutiny?

The employee avoids taking periodic vacations despite having accrued vacation time.

The employee assists with transactions of a disclosed ultimate beneficiary.

The employee lives a lavish lifestyle within their means.

The employee is involved in a minimal number of unresolved exceptions.

After review of the financial institution's enterprise-wide anti-money laundering risk assessment, the new compliance officer identifies several deficiencies that need attention.Which deficiency could lead to the highest potential for unmitigated risk?

The risk assessment is several years old and does not cover all current products and services.

The risk assessment is revisited too frequently thereby diverting critical resources from other compliance tasks.

The risk assessment is managed by a different team from the previous assessment therefore disrupting continuity of institutional knowledge.

The risk assessment does not anticipate potential risks even though the financial institution has no immediate plans involving those risks.

What are the European Union Directives on Money Laundering?

They require members to implement certain laws of prevent money laundering

They are voluntary codes of best practice for the financial sector

They are written by the Wolfsberg Group

They require members to implement certain laws of prevent money laundering

They require financial institutions to report suspicious activity to the Egmont Group in Brussels

An anti-money laundering specialist has just developed and implemented an anti-money laundering program. What is the most effective resource to evaluate the effectiveness of the program?

A qualified independent party/auditor

The anti-money laundering specialist

A qualified independent party/auditor

Which action should an FIU consider taking when it has information that might be useful to another FIU?

Supply the information to the other FIU spontaneously as soon as the relevance of sharing the information is identified

In accordance with Wolfsberg guidelines, submit the information to the other FIU in written form

Supply the information to the other FIU spontaneously as soon as the relevance of sharing the information is identified

Take no action until contacted by the other FIU

Request approval from the Egmont Group prior to sharing the information with the other FIU

When should new business products to evaluated for AML concerns?

Before they are launched into the market

After they have been implemented so there is empirical data to review

Before they are launched into the market

At the time of the next enterprise risk assessment

How should a financial institution deter money laundering through new accounts? Choose 3 answers

Document the identity of the party opening the account

Determine the beneficial owner(s) of the account

Seek to determine the source of deposited funds

Document the identity of the party opening the account

Query owner's names against FATF database

Determine the beneficial owner(s) of the account

Seek to determine the source of deposited funds

In order to protect investigative materials from disclosure when conducting an internal Investigation of any employee of a financial institution, legal counsel of that financial should________?

Request formal company authorization to conduct the investigation. Such authorization should be granted, if possible, by the board of directors or audit committee

Refuse to provide any records or documents to law enforcement because the bank has client privilege with its bank customers

Let the bank hire any and all contract investigators to conduct the internal investigation. That way Legal is not a party to the action and may remain independent

Not mark files or documents with privileged and Confidential: Attorney-Client Privilege and/or Work-Product. Those marks will only encourage law enforcement

What does the Financial Action Task Force (FATF) urge its members and all other jurisdictions to do when a jurisdiction is identified as having lax anti-money laundering / counter financing of terrorism controls?

Apply counter-measures to that jurisdiction

Consider customers from that jurisdiction as high risk

Cease doing business with that jurisdiction immediately

Apply economic sanctions until otherwise notified by FATF

A quarterly review is conducted on a retail customers account at a bank located in a jurisdiction with currency reporting thresholds. A number of large deposits of financial instruments drawn on other institutions in amounts under thresholds were noted. This activity did not fit the accounts historical profile. A suspicious transaction report will most likely be filed if what also occurred?

The deposited financial instruments were sequentially numbered

The customer has defaulted on a large loan with the bank

The deposited financial instruments were sequentially numbered

Four deposits were made during this period that exceeded the thresholds

The customer purchased financial instruments exceeding the threshold on three occasions

What are three indicators of money laundering associated with using electronic funds transfers? Choose 3 answers

Funds transfers to or from a financial secrecy haven without an apparent business reason

Funds transfers are received or sent from the same person to or from different accounts

Payment or receipts with no apparent link to legitimate contracts, goods or services

Funds transfers to or from a financial secrecy haven without an apparent business reason

Regular and frequent transfers from the account of a large company said to be payment for goods bought on credit

Funds transfers are received or sent from the same person to or from different accounts

Payment or receipts with no apparent link to legitimate contracts, goods or services

A local law enforcement officer notifies the bank compliance officer that he is working on an insurance fraud scheme that appears to be running transactions using the account of a bank employee. The law enforcement officer refers to a kiting suspicious transaction report filed by the compliance officer and requests further information.What action should the compliance officer take?

Provide the information to the law enforcement in response to a formal written request

Call the employee and demand an explanation

Allow access to the bank's documents immediately

Provide the information to the law enforcement in response to a formal written request

When providing reporting of STRs to the board, which of the following should be provided?

A numerical summary of all the STRs and a summary of key STRs, including PEPs, key employees

A numerical summary of all the STRs

A numerical summary of all the STRs and a summary of key STRs, including PEPs, key employees

A summary of all key STRs, including PEPs and key employees

All the STRs filed with the national FIU

An anti-money laundering specialist working at a bank just received a legal request from a law enforcement agency mandating the release of all financial transaction records relating to an account at the bank. The specialist immediately recognizes the account as one owned by the bank Chief Executive Officers brother. During research to gather the requested documents, the specialist finds several internal memos he had sent to the bank president with concerns regarding possible suspicious activity relating to this account. The specialist recalls the bank president verbally responded to each memo with an explanation of the activity and indicated there was no cause for concern. What should the specialist do with respect to these internal memos?

Advise the bank's senior legal advisor of the situation

Place these memos in his personal files in case they are subsequently requested

Ask the bank president to document his instructions to the specialist

Call the law enforcement agent and suggest he modify the legal request to include these memos

Advise the bank's senior legal advisor of the situation

A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international banks located there.During on-boarding, the client's wealth was estimated at $7 million. Shortly thereafter, the client's father became president of Country B. During a routine client review two years later, it was identified that client's wealth had grown to $510 million.What are two red flags that indicate money laundering or financial terrorism? (Choose two.)

The client is from a country known for corruption.

The client is a family member of a PEP from a country known for corruption.

The client is from a country known for corruption.

The substantial growth in wealth during a short period of time.

The client is a family member of a PEP from a country known for corruption.

The holding company is in Country A with a bank account in one of the international banks.

What should an effective anti-money laundering training program include?

Real-life money laundering examples

Computer-based modules titles differently for each job description in the bank

Random testing of employees to ensure proper understanding of policies

Real-life money laundering examples

Lists of anti-money laundering regulations

To ensure that an institution's anti-money laundering program is current, which step should be taken?

The program should be reassessed at least annually

The program should be evaluated and updated at least every six months be the Board of Directors

The program should be reviews by a federal law enforcement officer for gaps in controls

The program should be sent to the institution's government regulator on a periodic basis

The program should be reassessed at least annually

According to experts, what is the most effective way to prevent money laundering through financial institutions?

Implementing a sound customer due diligence program

Ensuring that transaction monitoring systems can identify terrorist financing

Collecting information on beneficial owners and foreign customers

Instituting a policy prohibiting the acceptance of funds intended for terrorist financing

Implementing a sound customer due diligence program

ACAMS CAMS Practice Test 8 - Free Online Exam Questions 281-320

Which factor should a financial institution (FI) consider prior to sharing customer records within the same jurisdiction?

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