CAMS exam questions for practice in 2024 Updated 617 Questions
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ACAMS CAMS Exam is a prestigious certification program that provides AML professionals with the knowledge and skills they need to effectively detect and prevent money laundering activities in their organizations. The CAMS certification is recognized globally and is highly respected in the AML industry. It is an excellent way for individuals to demonstrate their commitment to AML compliance and to advance their careers in this growing field.
NEW QUESTION # 228
In the FATF 40 recommendations, the focus of AML efforts has been expanded beyond Financial Institutions. Which three businesses and/or professions are covered? Choose 3 answers
- A. Trust and company service providers
- B. Real estate agents when they are involved in transactions for clients concerning buying andselling properties
- C. Dealers in art, when they engage in any cash transaction with a customer at or above adesignated threshold
- D. casinos, when customers engage in financial transactions equal to or above a designated Threshold
Answer: A,B,C
NEW QUESTION # 229
Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
(Choose two.)
- A. Smuggling cultural artifacts
- B. Engaging in wire transfer activity
- C. Human trafficking
- D. Engaging in civil conflict
Answer: A,C
Explanation:
Art and Antiquities: Conduits for Money Laundering and Terrorist Financing Why Fight the Antiquities Trade?
More recently, groups like Daesh (Islamic State [IS]), al-Qaida, the Taliban and their affiliates have been engaged in ****cultural racketeering and terrorism in Iraq, Syria, Yemen, Afghanistan and elsewhere, converting patrimony into cash for weapons and troops****.
https://www.un.org/press/en/2015/sgsm17427.doc.htm
As Terrorists Diversify Fundraising Tactics, Greater Efforts Needed to Shut Down Illicit Channels, Secretary-General Tells Finance Ministers' Meeting Terrorists continue to adapt their tactics and diversify their funding sources. Today, Da'esh runs a multi-million-dollar economy in territories under its control. Da'esh terrorists raise money through the oil trade, extortion, undetected cash couriers, kidnapping for ransom, trafficking of humans and arms and racketeering. They loot and sell precious cultural property, shamelessly profiting from the destruction of humanity's common heritage.
NEW QUESTION # 230
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?
- A. The local paper runs stories that sully the institution's reputation in the marketplace
- B. The institution's creditworthiness thresholds change
- C. The national Financial intelligence Unit issues new risk indicators
- D. Law enforcement issues a subpoena for a particular customer's account records
Answer: C
Explanation:
An automated transaction monitoring system is a tool that analyzes transactions and customer behavior for signs of money laundering or other financial crimes, and generates alerts when suspicious or unusual activity is detected. The system relies on a set of rules and parameters that define what constitutes normal and abnormal transactions, based on the risk profile and business nature of the financial institution or business.
These rules and parameters need to be periodically reviewed and updated to ensure that they are effective and compliant with the latest regulations and best practices.
One of the factors that would most likely result in a change in the monitoring system parameters is when the national Financial intelligence Unit (FIU) issues new risk indicators. The FIU is a central authority that collects, analyzes, and disseminates financial intelligence related to money laundering, terrorist financing, and other financial crimes. The FIU also provides guidance and feedback to financial institutions and businesses on how to comply with their anti-money laundering (AML) obligations and improve their transaction monitoring systems. The FIU may issue new risk indicators based on its analysis of emerging trends, typologies, and threats in the financial sector, or based on international standards and recommendations. These risk indicators are intended to help financial institutions and businesses identify and report suspicious transactions more effectively and efficiently.
Therefore, when the FIU issues new risk indicators, the financial institution or business should review its existing monitoring system parameters and adjust them accordingly to reflect the new risks and scenarios. For example, the FIU may issue new risk indicators related to the use of cryptocurrencies, virtual assets, or online platforms for money laundering or terrorist financing. In that case, the financial institution or business should update its monitoring system parameters to include new rules, thresholds, or patterns that capture these activities and generate alerts for further investigation.
References:
1: The Complete Guide to Transaction Monitoring: Everything to Know
2: AML Scenarios: Transaction Monitoring Challenges
3: Setting AML Transaction Monitoring Thresholds
4: Automated Transaction Monitoring - Considerations for System Implementation
5: ACAMS (2020). CAMS Certification Package (6th Edition)
NEW QUESTION # 231
What do the Financial Action Task Force (FATF) mutual evaluations of each member assess?
- A. The levels of implementation of the FATF Recommendations
- B. If the member has made any suggestions for updates to the FATF Recommendations
- C. If the member has a large enough economy to maintain its membership
- D. The member's ability to send a representative to the plenary sessions
Answer: A
NEW QUESTION # 232
A financial institution is reorganizing and the anti-money laundering officer is now required to report to the Sales Director. Which of the following statements about this situation is most correct?
- A. The reorganization will ensure communication of anti-money laundering issues to the board.
- B. The anti-money laundering officer should be independent of business functions.
- C. The anti-money laundering officer should be elevated to a position on the Board.
- D. The reorganization will enhance the compliance framework.
Answer: B
Explanation:
The anti-money laundering officer (AML officer) is responsible for overseeing the implementation and effectiveness of the anti-money laundering (AML) program of a financial institution. The AML officer should have sufficient authority, independence, and access to resources to perform this role. Reporting to the Sales Director may compromise the independence and objectivity of the AML officer, as the Sales Director may have conflicting interests or incentives that could influence the AML officer's decisions or actions. The AML officer should report to a senior management level that is independent of business functions and has direct access to the board of directors or a relevant committee. This would ensure that the AML officer can communicate any AML issues or concerns to the board without any interference or undue influence from the business functions.
References: = Some of the references that support this answer are:
ACAMS Study Guide for the CAMS Certification Examination, Chapter 2, Section 2.2.1, page 41: "The AML officer should report to a senior management level that is independent of the business line and has direct access to the board of directors or a relevant committee." Money Laundering Reporting Officer: The Role Of MLRO, Section "Role Of Money Laundering Reporting Officer": "The MLRO should have independent monitoring and should be able to connect directly with people who make business decisions, such as senior management or the board of directors." Money Laundering Reporting Officer (MLRO)? | Dow Jones, Section "What is a Money Laundering Reporting Officer (MLRO)?": "A Money Laundering Reporting Officer (MLRO) is tasked with overseeing a firm's compliance with the Financial Conduct Authority's (FCA) rules on money laundering. ... The MLRO should have sufficient authority and independence within the firm to carry out their responsibilities effectively."
NEW QUESTION # 233
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 are deploying an Azure Machine Learning model to an Azure Kubernetes Service (AKS) container.
You need to monitor the scoring accuracy of each run of the model.
Solution: You modify the Config.json file.
Does this meet the goal?
- A. Yes
- B. No
Answer: B
Explanation:
Instead update the manifest file.
Reference:
https://azure.github.io/learnAnalytics-UsingAzureMachineLearningforAIWorkloads/lab07- deploying_a_scoring_service_to_aks/0_README.html
NEW QUESTION # 234
How should a compliance program respond to an AML audit finding?
- A. By using the findings to identify and assess their money laundering risk
- B. By closing the accounts that were subject to findings
- C. By giving recommendations for each finding as part of an audit report
- D. By nominating an independent party to implement the corrective action
Answer: A
Explanation:
An AML audit is a process of evaluating an organization's compliance with AML regulations and best practices. The audit report should provide feedback on the strengths and weaknesses of the organization's AML program and identify any gaps or deficiencies that need to be addressed. The compliance program should use the audit findings as an opportunity to improve its AML risk management and internal controls, and to implement corrective actions as needed. The audit findings should not be ignored or dismissed, but rather used as a tool to enhance the organization's AML compliance performance and effectiveness.
References:
1: This web page explains what an AML compliance program is, why it is important, and what are the key components of an effective program. It also states that an AML compliance program should involve a regular review of the internal controls and systems used to detect and report financial crime, and measure their effectiveness in meeting compliance standards.
2: This blog post provides an overview of the importance and steps of an AML audit, and how to perform one effectively. It also suggests that an AML audit is a starting point to strengthen and improve the AML program, and that the insights from the audit should prompt action by the compliance team to address the deficiencies discovered.
3: This blog post discusses the best practices for AML audit compliance, and emphasizes the need for an ongoing testing process, including the audit, to keep the AML program current and effective. It also recommends effective communication among all employees who follow the program and procedures.
NEW QUESTION # 235
According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?
- A. Commodities traders
- B. Money services businesses
- C. Hawala operators
- D. Real estate agents
Answer: D
Explanation:
Reference: http://www.fatfgafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%20
(approved%20February%202012)%20reprint%20May%202012%20web%20version.pdf (page 19, DNFBPs: customer due diligence, bulleted point (b))
NEW QUESTION # 236
The marketing department presents to an anti-money laundering specialist a business plan targeting individuals holding important public positions. In addition to obtaining the proper identification and basic information from these customers, what else should the anti-money laundering specialist recommend a financial institution do to check the background and conduct enhanced due diligence based on public information?
1. Determine if a client appears on the Basel Committee on Banking Supervision's list of public officials.
2. Investigate the source of funds.
3. Identify people and companies that are clearly related.
4. Identify a person fully, including their political history.
- A. 1, 2, and 4 only
- B. 1, 2, and 3 only
- C. 1, 3, and 4 only
- D. 2, 3, and 4 only
Answer: D
Explanation:
Explanation
TO BE RECHECKED
NEW QUESTION # 237
Which statements regarding the USA PATRIOT ACT best describe key aspects that have extraterritorial reach? (Choose three.)
- A. It allows foreign banks to voluntarily designate a registered agent in the US to accept service of subpoenas.
- B. 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.
- C. 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.
- D. 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.
- E. It excludes as foreign FIs businesses that would be considered broker-dealers, money transmitters, and currency exchangers.
- F. 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.
Answer: D,E,F
Explanation:
Reference:
https://www.jonesday.com/-/media/files/publications/2007/10/extraterritorial-application-of-the-usa-patriot-ac/fi
https://www.lawfareblog.com/long-arm-us-law-patriot-act-anti-money-laundering-act-2020-and-foreign-banks
NEW QUESTION # 238
A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?
- A. US sanctions
- B. Increased organized crime and corruption
- C. Loss of tax revenue
- D. Reputation risk for the port
Answer: B
Explanation:
Explanation
A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer increased organized crime and corruption as a social/economic consequence. "Weaknesses in the AML/CFT regime can lead to a range of economic and social consequences, including...increased crime and corruption." (CAMS Manual, 6th Edition, page 32)
NEW QUESTION # 239
Law enforcement submitted a request to a bank for information regarding one of its customers.
How should the bank respond according to Financial Action Task Force Guidance?
- A. Ensure the information is necessary to the investigation before responding to the request
- B. Contact the customer informing the person of the investigation to ensure the bank provides correct information
- C. Ensure that the request will not violate any local privacy regulations or legislation
- D. Provide all information requested to support the investigation
Answer: C
Explanation:
According to the ACAMS Study Guide 6th Edition, Chapter 2, page 37, one of the red flags of money laundering or terrorist financing is the use of nominees, trusts, or third parties to hide the identity, ownership, or control of the funds or assets involved in the transaction. Nominees are individuals or entities that act on behalf of the actual or beneficial owners of a company, trust, or account, and may be used to conceal the source, destination, or purpose of the funds or assets. Nominees may also be used to evade taxes, sanctions, or regulatory requirements.
In this case, the compliance officer is unable to verify the identity of the beneficial owners of the company, and only information on the nominee owners was provided. This raises the suspicion that the company may be involved in money laundering or terrorist financing activities, and that the nominee owners may be acting as fronts or intermediaries for the actual or beneficial owners. The compliance officer should conduct further due diligence on the company, the nominee owners, and the beneficial owners, and report any suspicious or unusual activity to the relevant authorities.
References:
ACAMS Study Guide 6th Edition, Chapter 2, page 37
Beneficial Ownership Meaning and Regulation - Investopedia
What is a nominee shareholder? | LawBite
NEW QUESTION # 240
What is suspicious activity or red flag with regard to a customer's activity? Choose 3 answers
- A. Paying the tellers he deals with a regular gratuity
- B. Engaging in wiretransactionswith an offshore account
- C. Exchanging small denomination bills for large ones
- D. Asking about the bank's fee schedule for a series of transactions
Answer: A,B,C
NEW QUESTION # 241
Historically, which of the following vehicles is most often used to hide beneficial ownership?
- A. an offshore company
- B. a charitable organization
- C. a professional association
- D. a limited liability partnership
Answer: B
NEW QUESTION # 242
When creating an anti-money laundering program for a foreign bank with branches in the United States, which of the following are included among the four minimum elements required under the USA PATRIOT Act?
1. The development of a Know Your Customer program.
2. An ongoing employee training program.
3. The designation of a compliance officer.
4. An independent audit function to test the program.
- A. 1, 2, and 4 only
- B. 2, 3, and 4 only
- C. 1, 2, and 3 only
- D. 1, 3, and 4 only
Answer: A
NEW QUESTION # 243
What are two risks to institutions for violating anti-money laundering laws as demonstrated by the 2012 HSBC settlement with United States authorities? (Choose two.)
- A. Imprisonment of bank employees
- B. Civil money penalties
- C. Loss of bank charter/license
- D. Forfeiture of assets
Answer: B,D
Explanation:
Institutions that violate anti-money laundering laws may face various risks and consequences, such as legal, regulatory, reputational, and operational risks. As demonstrated by the 2012 HSBC settlement with United States authorities, two of the most significant risks are:
Forfeiture of assets. This means that the institution may have to surrender some or all of its assets that are related to the money laundering activities or violations. For example, HSBC agreed to forfeit $1.256 billion as part of its deferred prosecution agreement with the US Department of Justice1.
Civil money penalties. This means that the institution may have to pay fines or penalties to the government or other regulatory agencies for violating the anti-money laundering laws or regulations. For example, HSBC agreed to pay $665 million in civil money penalties to various US regulators, including the Office of Foreign Assets Control, the Federal Reserve Board, and the Office of the Comptroller of the Currency1.
The other two options, C and D, are not as common or relevant to the 2012 HSBC settlement. Loss of bank charter/license may occur in extreme cases where the institution is deemed unfit to operate or poses a serious threat to the financial system. Imprisonment of bank employees may occur if the employees are found guilty of criminal charges, such as fraud, conspiracy, or wilful violation of anti-money laundering laws. However, these outcomes are usually reserved for individuals, not institutions, and depend on the specific facts and circumstances of each case.
References:
1: HSBC announces settlements with authorities, 2012,
https://www.hsbc.com/-/files/hsbc/investors/stock-exchange-announcements/2012/december/2012-12-11-h
2: Settlement Agreement between the U.S. Department of the Treasury's Office of Foreign Assets Control and HSBC Holdings plc, 2012, https://ofac.treasury.gov/recent-actions/20121211_33
3: HSBC settles on record US fee, 2012,
https://www.dw.com/en/hsbc-settles-in-us-money-laundering-probe/a-16443391
4: HSBC pays record $1.9bn fine to settle US money-laundering accusations, 2012,
https://www.theguardian.com/business/2012/dec/11/hsbc-bank-us-money-laundering
5: HSBC to pay $1.9bn in US money laundering penalties, 2012,
https://www.bbc.com/news/business-20673466
NEW QUESTION # 244
In the FATF 40 recommendations, the focus of AML efforts has been expanded beyond Financial Institutions.
Which three businesses and/or professions are covered? Choose 3 answers
- A. Trust and company service providers
- B. Real estate agents when they are involved in transactions for clients concerning buying and selling properties
- C. casinos, when customers engage in financial transactions equal to or above a designated Threshold
- D. Dealers in art, when they engage in any cash transaction with a customer at or above a designated threshold
Answer: A,B,D
NEW QUESTION # 245
Which two steps should a financial institution take when it receives a law enforcement request to keep an account open that may be associated with suspicious or criminal activity? (Choose two.)
- A. Stop filing suspicious transaction reports because law enforcement will be monitoring the account
- B. Maintain account records for at least five years after the request expires
- C. Ask for a written request from the law enforcement agency that defines the duration
- D. File a suspicious transaction report on the account owner(s)
Answer: B,C
NEW QUESTION # 246
Which is a red flag for funds transfers?
- A. Funds transfers are repeatedly sent to the same beneficiary out of line with the business purpose.
- B. Funds transfers are to a higher-risk geographic location with a known supplier within the same industry as the originator.
- C. Funds transfers are received in numerous small quantities from entities that are in related industries.
- D. Funds transfers are repetitive and within expected patterns.
Answer: A
Explanation:
Funds transfers are electronic payments that move money from one account to another, either within the same financial institution or across different institutions, countries, or currencies1. Funds transfers are commonly used for legitimate purposes, such as remittances, trade, or investment, but they can also be abused by money launderers, terrorists, or fraudsters to move illicit funds or conceal their origin or destination2. Therefore, financial institutions and other entities that offer funds transfer services are required to apply anti-money laundering and counter-terrorism financing (AML/CFT) measures, such as customer due diligence, transaction monitoring, record-keeping, and reporting of suspicious activities2.
One of the red flags for funds transfers that may indicate money laundering or other criminal activity is when funds transfers are repeatedly sent to the same beneficiary out of line with the business purpose3. This could suggest that the originator and the beneficiary are colluding to layer or integrate illicit funds, or to evade reporting or sanctions requirements. For example, a business may send multiple funds transfers to the same supplier, but the amounts or frequencies do not match the invoices or contracts, or the supplier is located in a high-risk jurisdiction or is subject to sanctions. Alternatively, an individual may send frequent funds transfers to the same person, but the relationship or the reason for the transfers is unclear or inconsistent, or the person is associated with a criminal or terrorist organization. In such cases, the financial institution or the funds transfer service provider should conduct enhanced due diligence, verify the source and purpose of the funds, and report any suspicious activity to the relevant authorities.
References:
1: Wire Transfer Definition - Investopedia
2: International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation - The FATF Recommendations | FATF
3: Wire Transfer Red Flags: Money Laundering & Fraud Risks - Alessa1
Reference: https://www.fmu.gov.pk/docs/Red-flags-for-banks.pdf
NEW QUESTION # 247
......
The CAMS certification exam covers a wide range of topics, including anti-money laundering laws and regulations, risk assessments, customer due diligence, suspicious activity reporting, and sanctions screening. CAMS exam is designed to evaluate a professional's understanding of the latest anti-money laundering trends, best practices, and regulatory requirements. Certified Anti-Money Laundering Specialists certification exam is recognized by regulators, law enforcement agencies, and financial institutions globally, making it a valuable credential for professionals in the financial services industry.
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