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NEW QUESTION # 359
To ensure compliance with economic sanctions established by governmental authorities in the jurisdictions where it operates, a financial institution requires that all new and existing customers be screened at onboarding and quarterly thereafter.
Is this step sufficient to ensure compliance?
- A. Yes, this is recommended by the international guidance
- B. No, it is necessary to screen and perform enhanced due diligence on new relationships
- C. Yes, screening all existing customer relationships ensures the institutions is not dealing with a sanctioned individual or entity
- D. No, screening should occur promptly after list updates
Answer: D
Explanation:
Screening customers at onboarding and quarterly thereafter is not sufficient to ensure compliance with economic sanctions, as sanctions lists may change frequently and the financial institution may not be aware of the latest updates. Screening should occur promptly after list updates to ensure that the financial institution is not dealing with a sanctioned individual or entity, or facilitating a prohibited transaction. This is recommended by the international guidance from the Financial Action Task Force (FATF) and the Wolfsberg Group12.
Screening and performing enhanced due diligence on new relationships is also important, but not the only step to ensure compliance.
References:
CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Sanctions, page 86 The Wolfsberg Group Correspondent Banking Due Diligence Questionnaire 2014, Section 5: Sanctions Policy, page 12 ACAMS CAMS Certification Video Training Course - Exam-Labs, Video 3.1: Sanctions Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 109 The European Union Fourth Anti-Money Laundering Directive (4th AMLD) is a legal framework that aims to prevent the use of the Union's financial system for the purposes of money laundering and terrorist financing.
One of the provisions of the 4th AMLD is to lower the currency threshold for cash payments from €15,000 to
€10,000. This means that any person who makes or receives cash payments of €10,000 or more, whether in a single transaction or in several linked transactions, is subject to customer due diligence and record-keeping obligations. The 4th AMLD also extends its applicability to providers of gambling services, which are now listed as 'obliged entities'.
References:
Directive - 2015/849 - EN - Fourth Anti-Money Laundering Directive - EUR-Lex, Article 11 and Recital 23.
EUR-Lex - 02015L0849-20210630 - EN - EUR-Lex, Article 11 and Recital 23.
Key elements of the 4th EU Anti-Money Laundering Directive, Section: Cash payments.
Anti-money laundering and countering the financing of terrorism legislative package, Section: New EU AML/CFT Regulation.
NEW QUESTION # 360
A financial institution (FI) has decided to revamp its compliance program to be more risk-based. Which option should the FI use as part of the new risk-based compliance program?
- A. Data-based
- B. Transaction-based
- C. Predictive-based
- D. Leadership-based
Answer: A
Explanation:
A risk-based compliance program is one that identifies and prioritizes the highest compliance risks to the FI and implements controls, policies and procedures to mitigate them. A data-based option is the most suitable for a risk-based compliance program, as it allows the FI to collect, analyze and monitor relevant data on its customers, transactions, products, services, geographies and other risk factors. A data-based option also enables the FI to measure the effectiveness of its compliance program and adjust it as needed to respond to changing risks and regulatory expectations12.
References:
1: Risk-Based Approach to Compliance Management2
2: A Risk-Based Approach to Regulatory Compliance1
Reference:
https://www.ifc.org/wps/wcm/connect/e7e10e94-3cd8-4f4c-b6f8-1e14ea9eff80/45464_IFC_AML_Report.pdf?M
NEW QUESTION # 361
Historically, a tour guide has made monthly cash deposits averaging $10,000. Over the past three months, the monthly deposits have averaged $100,000. When the financial institution questions the increased deposits, the tour guide explains that there have been numerous conventions in town so business has increased substantially.
Which further action(s) should the financial institution take?
- A. Perform further investigation, it appropriate report the activity to the authorities and consider terminating the relationship
- B. Schedule a periodic review of activity
- C. Perform further investigation, if appropriate report the activity to the authorities and place a limit on future transactions
- D. Immediately terminate the relationship
Answer: A
NEW QUESTION # 362
You need to configure versioning and logging for Azure Machine Learning models.
Which Machine Learning service application should you use?
- A. Experiments
- B. Models
- C. Pipelines
- D. Activities
- E. Deployments
Answer: E
Explanation:
Explanation/Reference:
References:
https://docs.microsoft.com/en-us/azure/machine-learning/service/how-to-enable-logging#logging-for-deployed- models
NEW QUESTION # 363
Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?
- A. Filing a suspicious transaction report when you know or suspect money laundering is taking place
- B. Discussing your suspicions with a client, thus giving the client the opportunity to switch service providers and to cover his tracks in future transactions
- C. Knowingly financing a resort development with the proceeds of arms trafficking
- D. Assisting a client in a property conveyance by effecting the transfer of ownership from the seller to the purchaser when you don't know the purchaser
Answer: C
Explanation:
Option B is closest to the definition of money laundering provided by the United Nations Convention against Transnational Organized Crime and Other Protocols, which states that money laundering is "the conversion or transfer of property, knowing that such property is the proceeds of crime, for the purpose of concealing or disguising the illicit origin of the property or of helping any person who is involved in the commission of the predicate offence to evade the legal consequences of his or her action". In this scenario, the person is knowingly financing a resort development with the proceeds of arms trafficking, which is a crime, and thus concealing or disguising the illicit origin of the property.
References: =
* CAMS Certification Package - 6th Edition | ACAMS1
* CAMS Certifications: How to Get CAMS Certified | ACAMS2
* ACAMS CAMS Certification Video Training Course - Exam-Labs3
* Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)4
* United Nations Convention against Transnational Organized Crime and the Protocols Thereto
NEW QUESTION # 364
A profitable commercial customer who operates an import-export business has multiple accounts with the same institution at branches m different locations. The customer receives funds from a jurisdiction perceived as highly corrupt according to Transparency International ratings. The customer makes frequent transfers among the accounts and prefers to manage the accounts separately. What should the institution do to mitigate the risk associated with these accounts?
- A. Diminish the importance of the subjective Transparency International rating
- B. Conduct a trade-pnce manipulation analysis
- C. Develop a system to monitor all the activity
- D. File a suspicious transaction report
Answer: D
NEW QUESTION # 365
A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer's accounts, you notice that credit card receipts have increased with no .
The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.
Which red flag should trigger additional investigation?
- A. Lower cash deposits
- B. Increased credit card receipts
- C. Privately-owned ATM
- D. Construction of the new patio dining area
Answer: B
NEW QUESTION # 366
When a bank performs a risk assessment, what areas should an institution focus on?
- A. The type and location of the institution's clients
- B. The nature and breadth of the services and products the institution provides
- C. The geographic locations where the institution does business
- D. The amount of the money the institution earns prior to taxes
Answer: A,B,C
NEW QUESTION # 367
What is a major money laundering risk associated with a number of prepaid cards as opposed to credit or debit cards?
- A. The risk of losing the prepaid cards
- B. The global access to cash through ATMs
- C. The anonymous access to funds
- D. The inability to load the card with cash
Answer: C
NEW QUESTION # 368
The branch manager calls the compliance officer and informs her that a law enforcement officer has just left the branch and was asking a lot of questions and left a business card.
What should the compliance officer do?
- A. File a suspicious transaction report
- B. Require the branch manager to write a detailed memo about the request
- C. Verify that the reported officer was an actual authorized representative
- D. Follow up to verify that the officer received all necessary information
Answer: C
NEW QUESTION # 369
Which is a FATF characteristic used to assess a country's effectiveness of its AML regime?
- A. Legal persons are prevented from misuse for money laundering or terrorist financing.
- B. Funds supporting and proceeding from crime or terrorism are prevented from entering the financial sector.
- C. Supervisors appropriately supervise, monitor, and regulate financial institutions (Fls).
- D. FIs adequately apply preventive measures.
Answer: D
Explanation:
The FATF is an inter-governmental body that sets standards and promotes effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. The FATF conducts mutual evaluations of its members and other jurisdictions to assess their compliance with the FATF Recommendations and the effectiveness of their AML/CFT regimes1.
The FATF defines effectiveness as "the extent to which a country's AML/CFT regime is achieving the defined outcomes of an effective regime that allows them to mitigate their risks and threats of ML/TF"2. The FATF assesses effectiveness based on 11 immediate outcomes, which are grouped into three thematic goals:
financial system integrity, legal system and operational issues, and international cooperation2.
One of the immediate outcomes under the financial system integrity goal is that "FIs adequately apply preventive measures commensurate with their risks, and report suspicious transactions" (IO.4)2. This outcome measures how well FIs implement the FATF Recommendations on customer due diligence, record-keeping, internal controls, risk assessment, and suspicious transaction reporting. These preventive measures are essential for FIs to identify and mitigate the risks of being misused for money laundering or terrorist financing, and to provide useful information to the authorities for investigation and prosecution2.
Therefore, the correct answer is D. FIs adequately apply preventive measures, as this is one of the FATF characteristics used to assess a country's effectiveness of its AML regime.
References:
* FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems
* An effective system to combat money laundering and terrorist financing
NEW QUESTION # 370
A prospective AML officer comes highly recommended by a banks up-stream correspondent institution of similar size and make-up, located in a different city in the same country. The bank is interested in hiring the individual. What should be the next step taken by the Board of Directors?
- A. Hire the individual, relying on the recommendation of its correspondent
- B. Hire the individual on a probationary basis so that the institution can determine if the individual is sufficiently experienced and capable
- C. Confer with its regulatory agency to determine whether it is appropriate to hire the person
- D. Do a thorough background check
Answer: D
Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) study guide, one of the best practices for hiring an AML officer is to do a thorough background check, including verifying the candidate's credentials, qualifications, references, and reputation1. This is because the AML officer plays a crucial role in ensuring the compliance and integrity of the financial institution, and therefore must have the necessary skills, knowledge, experience, and ethics to perform the job effectively and professionally. A background check can also help to identify any potential conflicts of interest, criminal records, or regulatory sanctions that may affect the candidate's suitability for the position1. The other options are incorrect because:
* B. Confering with the regulatory agency may not be necessary or appropriate, as the hiring decision is ultimately the responsibility of the financial institution, and the regulatory agency may not have any specific or relevant information or guidance on the candidate2.
* C. Hiring the individual, relying on the recommendation of the correspondent, may not be sufficient or prudent, as the correspondent may have different standards, expectations, or interests than the financial institution, and may not have conducted a comprehensive or objective assessment of the candidate3.
* D. Hiring the individual on a probationary basis may not be feasible or fair, as the AML officer role
* requires a high level of trust, authority, and responsibility, and the financial institution may not be able to evaluate the candidate's performance or potential in a short period of time4.
References:
* 1: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 147
* 2: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 148
* 3: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 147
* 4: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 148
NEW QUESTION # 371
Which is true about Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?
- A. To be a member of an FSRB, a country must have enacted AML and Anti-Terrorist Financing laws.
- B. Tools used by FRSBs include training measures and mutual evaluations of its members.
- C. FSRBs set standards for their member countries that supplement FATF's standards.
- D. AFATF-member country cannot also be a member of an FSRB.
Answer: B
Explanation:
FSRBs are regional bodies that work with FATF to promote the implementation of AML and CFT standards.
FSRBs are made up of member countries that have agreed to work together to combat money laundering and the financing of terrorism [1]. The tools used by FSRBs to promote the implementation of AML and CFT standards include training measures, mutual evaluations of its members, technical assistance, and the sharing of information. FSRBs may also adopt recommendations and best practices based on the FATF's 40 Recommendations.
NEW QUESTION # 372
An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction.
What action should the employee take?
- A. Report the conversation to the compliance officer
- B. Ignore the situation because the colleague is the relationship manager for that customer
- C. Tell the colleague that it is against policy to give such advice
- D. Report the conversation to the local police
Answer: A
Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) resources, the employee should report the conversation to the compliance officer because the colleague is engaging in tipping off, which is a serious violation of anti-money laundering laws and regulations. Tipping off is the act of informing a person or entity that they are the subject of a suspicious transaction report or an investigation, or providing any information that may compromise or impede the investigation. Tipping off can result in criminal penalties, civil liabilities, and disciplinary actions for the individual and the institution. Therefore, the employee has a duty to report the colleague's misconduct to the compliance officer, who is responsible for ensuring compliance with the anti-money laundering policies and procedures, and taking appropriate corrective actions.
References:
* CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), page 97
* CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Examination Preparation, page 8
* ACAMS CAMS Certification Video Training Course - Exam-Labs, Module 3: Compliance Standards for Anti-Money Laundering and Combating the Financing of Terrorism, video 3.4: Tipping Off and Confidentiality
* Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 8, Answer B
NEW QUESTION # 373
A periodic review of the account of a small household goods business reveals multiple shipments of goods to a country classified by the bank as high risk. They were transshipped through another country prior to the final destination. In the past three months, volumes over 25,000 units. The business has been a customer of a bank for 10 years.
Records show previous shipments to destinations primarily in Europe involving quantities of 5,000 units or less. Recent shipments are listed as being received by the same company as the earlier shipments and payments are being received from the same originator, but the unit price of the goods is three times higher than before.
Which two red flags indicate potential trade-based money laundering? (Choose two.)
- A. The goods are shipped to a jurisdiction that the bank classifies as "high risk" for money laundering activities.
- B. The size of the shipments appear inconsistent with the exporter's previous business activities.
- C. The goods are transshipped through one or more jurisdictions for no apparent economic reason.
- D. The shipments of the same goods are now going to a different location.
Answer: B,C
NEW QUESTION # 374
Note: This question is part of a series of questions that present the same scenario. Each question in the series contains a unique solution that might meet the stated goals. Some question sets might have more than one correct solution, while others might not have a correct solution.
After you answer a question, you will NOT be able to return to it. As a result, these questions will not appear in the review screen.
You have an app named App1 that uses the Face API.
App1 contains several PersonGroup objects.
You discover that a PersonGroup object for an individual named Ben Smith cannot accept additional entries.
The PersonGroup object for Ben Smith contains 10,000 entries.
You need to ensure that additional entries can be added to the PersonGroup object for Ben Smith. The solution must ensure that Ben Smith can be identified by all the entries.
Solution: You migrate all the entries to the LargePersonGroup object for Ben Smith.
Does this meet the goal?
- A. No
- B. Yes
Answer: B
Explanation:
LargePersonGroup and LargeFaceList are collectively referred to as large-scale operations.
LargePersonGroup can contain up to 1 million persons, each with a maximum of 248 faces. LargeFaceList can contain up to 1 million faces. The large-scale operations are similar to the conventional PersonGroup and FaceList but have some differences because of the new architecture.
References:
https://docs.microsoft.com/en-us/azure/cognitive-services/face/face-api-how-to-topics/how-to-use-large-scale
NEW QUESTION # 375
Which statement is true regarding the Financial Action Task Force standards for suspicious activity reports (SARs) information sharing within a financial group?
- A. Financial institutions cannot share customer information at all since it is confidential.
- B. Financial institutions must retain copies of SARs and supporting documentation for five years from the date of filing the SARs.
- C. Financial institutions should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.
- D. Financial institutions must require approval from regulators to share SARs information and supporting documentation.
Answer: C
Explanation:
Explanation
According to the Financial Action Task Force (FATF) standards for suspicious activity reports (SARs) information sharing within a financial group, "Financial institutions should establish adequate procedures to ensure that confidentiality of information is maintained and that information is only used for purposes permitted under national law. Where the parent institution is located in a country that does not permit such sharing, financial institutions should take measures to address this limitation" (CAMS Manual, 6th Edition, page 476). Therefore, financial institutions must establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.
NEW QUESTION # 376
Which three areas do FATF's 40 recommendations cover? Choose 3 answers
- A. Financial systems and their regulation
- B. The criminal justice system
- C. International Cooperation
- D. Prescriptive sentences for predicate offenses
Answer: A,B,C
Explanation:
Explanation/Reference:
NEW QUESTION # 377
To ensure that an institution's anti-money laundering program is current, which step should be taken?
- A. The program should be reassessed at least annually
- B. The program should be reviews by a federal law enforcement officer for gaps in controls
- C. The program should be evaluated and updated at least every six months be the Board of Directors
- D. The program should be sent to the institution's government regulator on a periodic basis
Answer: A
Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) by ACAMS, an institution's anti-money laundering program should be reassessed at least annually to ensure that it is current, effective, and compliant with the applicable laws and regulations. The reassessment should include a review of the institution's risk assessment, policies and procedures, internal controls, training, and independent testing. The reassessment should also consider any changes in the institution's products, services, customers, geographic locations, or business environment that may affect its exposure to money laundering and terrorist financing risks1.
The other options are not consistent with the best practices of maintaining an up-to-date anti-money laundering program. For example:
The program should be evaluated and updated at least every six months by the Board of Directors.
While the Board of Directors has the ultimate responsibility for overseeing the institution's anti-money laundering program, it is not required to evaluate and update the program every six months. This may be too frequent and impractical, especially for large and complex institutions. The Board of Directors should, however, approve the program and any significant changes, and ensure that senior management implements and enforces the program effectively1.
The program should be reviewed by a federal law enforcement officer for gaps in controls. While federal law enforcement agencies may conduct investigations or examinations of the institution's anti-money laundering program, they are not responsible for reviewing the program for gaps in controls. This is the role of the institution's internal audit function or an external independent party, who should conduct periodic testing of the program's adequacy and effectiveness1.
The program should be sent to the institution's government regulator on a periodic basis. While the institution's government regulator may request or review the institution's anti-money laundering program as part of its supervisory or enforcement activities, the institution is not obligated to send the program to the regulator on a periodic basis. The institution should, however, report any suspicious or unusual transactions or activities to the relevant authorities, such as the Financial Crimes Enforcement Network (FinCEN) or the Office of Foreign Assets Control (OFAC)1.
References:
Anti-Money Laundering Specialist (the 6th edition) by ACAMS
NEW QUESTION # 378
After a FATF mutual evaluation process, which are resulting actions for jurisdictions that are determined to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing? (Choose two.)
- A. Expect private statements from FATF regarding the level of compliance of the jurisdiction, when insufficient progress is made.
- B. Report to FATF on the implementation of their progress under the enhanced follow-up mechanism.
- C. Demonstrate a high-level commitment to swiftly resolve the identified deficiencies in the FATF mutual evaluation report.
- D. Request FATF for an extension of deadlines in order to provide local awareness on the improvements that are necessary to solve the deficiencies.
- E. Appeal to FATF for a technical compliance re-rating based on the jurisdiction's own experts criteria.
Answer: B,C
Explanation:
According to the FATF Procedures for the Fourth Round of AML/CFT Mutual Evaluations1, jurisdictions that are determined to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing are subject to the FATF's International Cooperation Review Group (ICRG) process. The ICRG process involves the following actions for such jurisdictions:
* Demonstrate a high-level commitment to swiftly resolve the identified deficiencies in the FATF mutual evaluation report. This commitment should be made in writing to the FATF President and should include an action plan with specific deadlines and milestones to address the deficiencies.
* Report to FATF on the implementation of their progress under the enhanced follow-up mechanism. The FATF will monitor the progress of the jurisdiction through regular reports and on-site visits, and will decide whether the jurisdiction has made sufficient progress to exit the ICRG process or whether further actions are required, such as public statements, counter-measures, or suspension of membership.
The other options are not resulting actions for jurisdictions with strategic deficiencies, as they are either not part of the FATF procedures or not consistent with the FATF's objectives and principles. For example, the FATF does not issue private statements regarding the level of compliance of a jurisdiction, nor does it allow a jurisdiction to appeal for a technical compliance re-rating based on its own criteria. The FATF also does not grant extensions of deadlines for jurisdictions to improve their regimes, as this would undermine the credibility and effectiveness of the mutual evaluation process.
References:
* 1: Mutual Evaluations - Financial Action Task Force
* 2: Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations Reference:
https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitor
NEW QUESTION # 379
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