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About CAMS Designation
The CAMS certification is well-known around the globe for being the gold standard among Anti-Money Laundering validations which outlines the main aspects of money laundering and its prevention. What is more, such a certificate helps in encouraging a culture of compliance in organizations and demonstrating one's dedication to a structured risk-based approach. It also helps in meeting accepter anti-money laundering training requirements while rewarding and retaining top performers. Finally, the certification also aids in successfully safeguarding against financial damage.
The CAMS certification is awarded by the Association of Certified Anti-Money Laundering Specialists (ACAMS), which is a leading organization in the AML industry. ACAMS was established in 2001 to provide training and resources for AML professionals around the world. Since then, it has grown into a global organization with over 70,000 members in more than 175 countries. ACAMS offers a variety of certification programs and training courses to help individuals advance their careers in the AML industry.
The Certified Anti-Money Laundering Specialist (CAMS) exam is a globally recognized certification program designed to equip individuals with the necessary knowledge and skills to prevent and detect money laundering and terrorist financing. The CAMS certification is administered by the Association of Certified Anti-Money Laundering Specialists (ACAMS), a leading international organization dedicated to the fight against financial crime.
NEW QUESTION # 164
Which are social/economic consequences of money laundering? (Choose two.)
- A. Increase in tax revenue
- B. Weakening of the country's infrastructure
- C. Weakening financial institutions
- D. Increase in corruption and organized crime
- E. Civil war
Answer: C,D
Explanation:
Money laundering has severe social and economic impacts, including increased crime rates, corruption and erosion of public trust. Money laundering fuels criminal activities by providing the necessary financial resources for criminals to continue their operations. As illicit funds circulate within the financial system, they enable the growth of criminal organizations and contribute to an increase in crime rates, including organized crime1. Money laundering also facilitates corruption and undermines public trust in financial institutions and the wider economy. This erosion of public trust is exacerbated by trade-based money laundering, which involves the manipulation of international trade transactions to disguise the origins of illicit funds2. Money laundering also weakens financial institutions by exposing them to reputational, operational, legal and regulatory risks. Money launderers exploit the vulnerabilities of financial systems and compromise their integrity and stability. Money laundering can also distort the allocation of resources, create inflationary pressures, and undermine the effectiveness of monetary policy3.
References:
* 1: Consequences Of Money Laundering Are: Understanding The Social, Economic, and Penalties Impacts1
* 2: Consequences of Money Laundering and Financial Crime2
* 3: Money laundering, its impact and consequences3
Reference: https://www.fatf-gafi.org/faq/moneylaundering/#:~:text=As%20for%20the%20potential%
20negative,and%20exchange%20rates%20due%20to
NEW QUESTION # 165
Combating the Financing of Terrorism (CFT)]
Under the USA PATRIOT Act, in which scenario would the US not have jurisdiction?
- A. Foreign bank with a US correspondent account
- B. US bank subsidiaries located in foreign jurisdictions
- C. Shell banks operating in foreign jurisdictions
- D. Foreign branch of a bank located in the US
Answer: C
Explanation:
shell banks are banks that have no physical presence in any country and are not affiliated with any regulated financial institution. They are often used by money launderers and terrorist financiers to hide their illicit activities and evade regulatory oversight. The USA PATRIOT Act prohibits US financial institutions from opening or maintaining correspondent accounts with shell banks, and requires them to take reasonable steps to ensure that their foreign correspondent banks do not provide services to shell banks12. Therefore, the US does not have jurisdiction over shell banks operating in foreign jurisdictions, unless they are involved in transactions that violate US laws or sanctions.
:
USA PATRIOT Act Section 313: Prohibition on U.S. Correspondent Accounts with Foreign Shell Banks1 Fact Sheet Regarding the Treasury Department's Use of Sanctions Authorities to Combat Money Laundering and Terrorist Financing3 Reference: https://www.congress.gov/107/plaws/publ56/PLAW-107publ56.htm
NEW QUESTION # 166
What reputational risk consequence could a financial entity face for violating AML laws?
- A. Seizure of assets
- B. Monetary penalties
- C. Increased audit costs to monitor behavior
- D. Loss of high-profile customers
Answer: B
Explanation:
Reference:https://www.ifc.org/wps/wcm/connect/e7e10e94-3cd8-4f4c-b6f8-1e14ea9eff80/45464_IFC_AML_Re
NEW QUESTION # 167
Which scenario should be escalated as potentially suspicious activity?
- A. A corporate account deposits large checks and wire transfers on a frequent basis from existing customers.
- B. A domestic business account receives a wire transfer from an international business with no history of such activity or business needs.
- C. A convenience store makes daily deposits or withdrawals primarily in cash.
- D. A retail chain deposits cash into several operating accounts and consolidates the funds into one account.
Answer: B
Explanation:
Reference:
https://www.utica.edu/academic/institutes/ecii/conferences/Conducting%20a%20Money%20Laundering%20Inv
NEW QUESTION # 168
Which of the following scenarios best justifies why a customer's account might be closed by a financial institution?
- A. The account shows periodic fixed amount remittances for tuition fees.
- B. The customer is the object of a civil subpoena.
- C. The account has transactions that triggered multiple suspicious activity reports (SARs).
- D. The customer uses a shipping company dealing with specially designated nationals (SDNs).
Answer: C
Explanation:
Accounts may be closed if they pose high money laundering or sanction risks.
Option A (Correct): Multiple SAR filings indicate high risk, possibly requiring account closure if AML concerns persist.
Option B (Incorrect): Tuition payments are a legitimate purpose for fund transfers.
Option C (Incorrect): Indirect dealings with SDNs require compliance review, but not immediate account closure.
Option D (Incorrect): Civil subpoenas alone do not justify account termination.
NEW QUESTION # 169
Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?
- A. Create an action plan to address the deficiencies without the support of the FATF
- B. Conduct due diligence
- C. Apply counter-measures
- D. Add the jurisdiction to the United Nations' list of sanctioned jurisdictions
Answer: C
Explanation:
Explanation/Reference: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/public- statement-october-2018.html
NEW QUESTION # 170
A money transmitter's nation-wide agent network remits funds to a country in Africa on behalf of an immigrant community based in the United States. A terrorist group is known to operate openly in this African country. In reviewing transaction records, the compliance officer detects a pattern where two customers together visit the same agent each week and remit the same amount of funds, $2,500, to the same recipient in the country in Africa.
What should alert the compliance officer to possible money laundering or terrorist financing activity by the two customers?
- A. The dollar amount of each transaction is just below the record keeping threshold.
- B. The customers always visit together.
- C. The customers always visit the same agent.
- D. The funds are being sent to the same recipient each week.
Answer: A
Explanation:
According to the ACAMS CAMS Study Guide, one of the common methods of money laundering and terrorist financing is to structure transactions to avoid reporting or record keeping requirements. Structuring involves breaking down a large amount of cash into smaller transactions that fall below a specified threshold, or using different accounts, agents, locations, or days to conduct the transactions. Therefore, the fact that the two customers remit the same amount of funds, $2,500, each week to the same recipient in a high-risk country is a red flag for possible money laundering or terrorist financing activity, as it suggests that they are trying to evade the record keeping threshold of $3,000 for money transmitters in the United States12.
Reference:
ACAMS CAMS Study Guide, 6th Edition, page 27
FFIEC BSA/AML Appendices - Appendix F - Money Laundering and Terrorist Financing Red Flags1 AML Red Flags - What are the Top 10 Indicators? - ComplyAdvantage2
NEW QUESTION # 171
What are some of the methods for sharing information and cooperating on an international basis? Choose 3 answers
- A. International Money Laundering Information Network
- B. Issuane subpoenas
- C. Regulatory sharing through Supervisory Channels
- D. Mutual Assistance Legal Treaties
Answer: A,C,D
NEW QUESTION # 172
Combating the Financing of Terrorism (CFT)]
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?
- A. By providing a high level summary of the activity and the interactions with law enforcement
- B. By providing a copy of the letter from law enforcement asking the bank to keep the account open.
- C. By informing the regulator to bring it up with their next meeting with the board
- D. By providing a copy of the STR to the board
Answer: A
Explanation:
The compliance officer should provide a high level summary of the activity and the interactions with law enforcement to the board of directors, as this would be the most appropriate way to escalate the information without compromising the confidentiality of the STR or the ongoing investigation. Providing a copy of the STR or the letter from law enforcement could expose the bank to legal risks or jeopardize the investigation.
Informing the regulator to bring it up with the board would not be sufficient, as the compliance officer has the responsibility to report directly to the board on significant compliance issues.
:
ACAMS CAMS Certification Video Training Course, Module 5: Risk Management, Lesson 5.3: Reporting to Senior Management and the Board1 ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 5: Risk Management, Section 5.3:Reporting to Senior Management and the Board2
NEW QUESTION # 173
An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country.
The service allows customers to transfer funds through a mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identity verification.
Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.)
- A. Cross-border functionality
- B. Limited access to counterparty information
- C. Real time transfer of funds
- D. Servicing the under-banked population
- E. Customer onboarding
Answer: A,B,C
Explanation:
The correct answer is B, C, and E, as these three present the highest anti-money laundering or sanctions risk and will require controls prior to launch. According to the FATF Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers1, P2P transactions pose significant challenges for AML/CFT compliance, as they may involve anonymous or pseudonymous parties, cross-border transfers, real-time settlement, and limited information on the beneficiaries. These factors increase the risk of money laundering, terrorist financing, and sanctions evasion, as well as the difficulty of detecting and reporting suspicious activity. Therefore, the institution should implement appropriate controls to mitigate these risks, such as:
Conducting enhanced due diligence on customers who use the P2P service, especially if they are located in high-risk jurisdictions or are involved in high-risk activities1.
Implementing transaction monitoring systems that can identify and flag unusual or suspicious patterns of behavior, such as large or frequent transfers, transfers to or from sanctioned entities or countries, or transfers that do not match the customer's profile or expected activity12.
Applying the travel rule, which requires the originator and beneficiary VASPs (or financial institutions) to exchange and retain information on the parties involved in the transfer, such as their names, account numbers, addresses, and national identification numbers13.
Establishing information-sharing and cooperation mechanisms with other VASPs, financial institutions, and regulators, to facilitate the exchange of relevant data and intelligence on P2P transactions and customers14.
References: 1: Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers - FATF, page 13-16, 28-29, 32-33, 40-412: AML and Compliance Solution for The P2P Industry - Sanction Scanner3: P2P Money Laundering: How to Comply - ComplyAdvantage4: 2024 National Money Laundering Risk Assessment - U.S. Department of the Treasury, page 17.
NEW QUESTION # 174
Which of the following is a red flag indicating potential money laundering or terrorism financing through dealers of precious metals or high-value items?
- A. A customer wants a handwritten receipt for a cash purchase of a high-end, limited-edition luxury watch.
- B. A customer wants to purchase gold bars with a combination of cash and cryptocurrency.
- C. A customer specifically requests to purchase a Kimberly Process-certified cut diamond.
- D. A customer pays an antique dealer with a credit card for a high-value antique item.
Answer: A
Explanation:
Money launderers use high-value goods (e.g., jewelry, art, and precious metals) to disguise illicit funds.
Option C (Correct): Requesting a handwritten receipt for a cash purchase suggests an attempt to avoid record-keeping, a known money laundering technique.
Option A (Incorrect): Buying gold bars with cash and cryptocurrency is unusual but not inherently illegal unless the amounts are suspicious.
Option B (Incorrect): Credit card payments are traceable and do not raise immediate red flags.
Option D (Incorrect): Kimberly Process-certified diamonds are legally sourced, and requesting them does not indicate suspicious intent.
NEW QUESTION # 175
A bank customer operates a fuel station as a sole proprietorship. The customer places deposits and other credits in a business account. The customer routinely transfers money from the business account to a brokerage account where he invests in money market securities. The customer also routinely makes monthly transfers to a credit card and line of credit to pay off balances. The volume of activity flowing through the business account has doubled in the past 3 months. An internal investigator reviews business account statements and credit card activity for the past 3 months, scans media articles about the customer, and interviews the account officer about the customer and account activity. This internal investigation did not provide an explanation for the increased activity1. Which of the following should the anti-money laundering specialist recommend to the internal investigator?
- A. Review activity in all related customer accounts in the past year.
- B. Concentrate on trades made in the brokerage account.
- C. Analyze account activity for selected accounts since the accounts were opened.
- D. No additional steps are necessary because this was a thorough review of the activity.
Answer: B
Explanation:
the internal investigation did not examine the brokerage account, which could be a potential source of money laundering. According to the CAMS Study Guide, 6th Edition, one of the common methods of money laundering is to use securities brokers to move funds through the purchase and sale of stocks, bonds, or other instruments1. The customer's frequent transfers from the business account to the brokerage account, and the increased volume of activity in the business account, could indicate that the customer is trying to disguise the origin or ownership of illicit funds by investing them in money market securities. Therefore, the anti-money laundering specialist should recommend the internal investigator to concentrate on the trades made in the brokerage account, and to look for any signs of market manipulation, insider trading, or unusual patterns of transactions1.
Reference:
1: CAMS Study Guide, 6th Edition, Chapter 2: Money Laundering Risks and Methods, page 55-56.
NEW QUESTION # 176
What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S.
banks under the Patriot Act? Choose 3 answers
- A. Prohibition of correspondent accounts for shell banks
- B. U.S. residents maintaining private banking accounts
- C. Cancellation of correspondent banking relationships
- D. Forfeiture of funds in a U.S. interbank account
Answer: A,C,D
Explanation:
The Patriot Act, enacted in 2001, introduced several provisions to enhance the anti-money laundering and counter-terrorist financing (AML/CFT) measures for U.S. banks and their foreign correspondent relationships.
Some of the potential issues for foreign financial institutions (FFIs) maintaining correspondent accounts with
U.S. banks under the Patriot Act are:
Cancellation of correspondent banking relationships: The Patriot Act requires U.S. banks to conduct due diligence and enhanced due diligence on their foreign correspondent accounts, and to terminate any account that poses a significant risk of money laundering or terrorist financing. This may result in the cancellation of correspondent banking relationships with FFIs that do not meet the U.S. standards or cooperate with the U.S. authorities. The loss of correspondent banking relationships may affect the FFIs' ability to access the U.S. financial system and provide services to their customers.
Forfeiture of funds in a U.S. interbank account: The Patriot Act authorizes the U.S. government to seize and forfeit any funds in a U.S. interbank account that are involved in or traceable to money laundering or terrorist financing activities. This means that FFIs may face the risk of losing their funds in a U.S.
interbank account if they or their customers are suspected or accused of engaging in illicit activities. The forfeiture of funds may have significant financial and reputational consequences for the FFIs and their customers.
Prohibition of correspondent accounts for shell banks: The Patriot Act prohibits U.S. banks from establishing or maintaining correspondent accounts for shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. This means that FFIs that are shell banks or have relationships with shell banks cannot access the U.S. financial system through correspondent accounts. The prohibition of correspondent accounts for shell banks aims to prevent the use of shell banks as vehicles for money laundering and terrorist financing.
References:
CAMS Study Guide, 6th Edition, Chapter 4: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 81-841 USA PATRIOT Act, Title III: International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Sections 312, 319, and 3132 Wolfsberg Anti-Money Laundering Principles for Correspondent Banking, October 2014, pp. 3-43 Reference: http://www.ffiec.gov/bsa_aml_infobase/pages_manual/olm_027.htm
NEW QUESTION # 177
Which of the following best describes the Black Market Peso Exchange money laundering method?
- A. The best known money laundering method used by known terrorists
- B. A method primarily used by narcotics traffickers to transfer value back to the source country
- C. A method used to smuggle dollars or pesos across the border from the United States to Mexico, and vice versa
- D. An undercover technique to identify politically exposed persons who may assist money launderers
Answer: C
NEW QUESTION # 178
An individual opened an account with a minimal cash deposit at a financial institution. He presented a foreign passport and stated he would be working locally for a few months. He also requested information about making electronic fund transfers. The institution was subsequently unable to verify the employment or residence information provided by the individual. Soon after this, a large transfer was sent to the customer's account. Which of the following is the course of action recommended by the Basel Committee on Banking Supervision's Customer Due Diligence for Banks?
- A. Implement enhanced due diligence procedures to monitor the account for suspicious activity.
- B. Close the account and return the funds to the source from which they were received.
- C. Post the deposit to the account and notify the customer that the deposit has been made.
- D. End the relationship by sending a check (cheque) to the customer for the full amount in the account.
Answer: B
NEW QUESTION # 179
the Financing of Terrorism (CFT)]
Which should be provided to the board of directors or designated specialized committee when reporting SARs
/STRs?
- A. Statistical data regarding SARs/STRs filed during the reported period.
- B. Copies of all SARs/STRs filed during the reported period.
- C. All possible details of SARs/STRs filed during the reported period.
- D. Names of all customers subject to SARs/STRs filed during the reported period.
Answer: A
Explanation:
The board of directors or designated specialized committee should be provided with statistical data regarding SARs/STRs filed during the reported period, such as the number, type, value, and geographic distribution of the reports, as well as any trends or patterns identified. This information helps the board or committee to oversee the effectiveness of the firm's AML program, assess the level of compliance risk, and allocate appropriate resources and training. Providing all possible details, names of customers, or copies of SARs
/STRs may compromise the confidentiality of the reports, violate data protection laws, or expose the firm to legal liability.
:
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (6th Edition), Chapter 5, Section
5.3.2, page 223.
The Role of the Money Laundering Reporting Officer - ICAEW, page 14.
Reference: https://www.fia.tc/wp-content/uploads/2018/04/FIA-SARGUIDE-0515-1.0.pdf
NEW QUESTION # 180
Which of the following is among the Financial Action Task Force criteria defining non-cooperative countries and territories?
- A. the establishment of a system for reporting "unusual" transactions, instead of "suspicious", as mentioned in the Financial Action Task force 40 Recommendations
- B. the presence of bank secrecy provisions reasonably balanced against the government's need for information
- C. effective laws regarding multiple sources of beneficial owner identification by a financial institution
- D. inadequate rules for the licensing and creation of financial institutions, including assessing backgrounds of managers and beneficial owners
Answer: D
Explanation:
One of the criteria that the Financial Action Task Force (FATF) uses to define non-cooperative countries and territories (NCCTs) is the lack of adequate rules for the licensing and creation of financial institutions, especially those with no or minimal presence, and the lack of effective systems for checking the backgrounds of managers and beneficial owners of such institutions. This criterion aims to prevent the establishment and operation of shell banks or other entities that can be used for money laundering or terrorist financing purposes. The FATF requires that countries and territories should have laws and regulations that ensure that financial institutions are subject to adequate licensing or registration procedures, that the authorities have the power to deny or revoke licenses or registrations, and that the authorities have access to information on the identity, reputation, and financial soundness of the managers and beneficial owners of financial institutions.
= Some of the references that support this answer are:
About the Non-Cooperative Countries and Territories NCCT Initiative, Section "The review and listing process": "The FATF established at that time four regional review groups (Americas, Asia/Pacific, Europe, Africa/Middle East) consisting of representatives from the FATF member governments that served as the main points of contact with the reviewed country or territory. ... The review groups gathered relevant laws, regulations and other relevant information, analysed this information against the 25 NCCT criteria, and drafted a report that was sent to the jurisdictions for comment." Annual Review of Non-Cooperative Countries and Territories 2006-2007: Eighth NCCT Review, Annex 1:
"List of Criteria for Defining Non-Cooperative Countries or Territories", Criterion 1: "Licensing and creation of financial institutions, in particular those with no physical presence, and the ability to obtain information on the beneficial ownership and control of such institutions." FATF (Financial Action Task Force) Countries 2024 - World Population Review, Section "Blacklisted Countries": "These are countries which were previously placed on the grey list and advised by the FATF to adopt the recommended financial security procedures, but have either failed or refused to do so. Blacklisted countries may be labeled as Non-Cooperative Countries or Territories (NCCTs)."
NEW QUESTION # 181
A foreign politically exposed person (PEP) requests to add a beneficiary to a file insurance policy.
How should the request be processed to mitigate risk?
- A. Perform due diligence on the beneficiary
- B. Determine the source of wealth and source of funds
- C. Decline the request to add a beneficiary due to increased risk
- D. Decline the request if the beneficiary is a foreign PEP
Answer: A
Explanation:
According to the FATF Recommendation 12, financial institutions should take reasonable measures to determine whether the beneficiaries of a life insurance policy and/or, where required, the beneficial owner of the beneficiary are politically exposed persons. This should occur at the latest at the time of the payout1. The purpose of this requirement is to prevent the abuse of life insurance products for money laundering or terrorist financing by PEPs or their associates. Therefore, the best way to mitigate the risk of adding a beneficiary to a life insurance policy for a foreign PEP is to perform due diligence on the beneficiary, such as verifying their identity, relationship with the PEP, and source of funds2.
The other options are not correct because they either do not comply with the FATF standards, or do not adequately address the risk of adding a beneficiary to a life insurance policy for a foreign PEP. Determining the source of wealth and source of funds is a measure that should be applied to the PEP as the customer, not the beneficiary, as part of the enhanced due diligence process2. Declining the request if the beneficiary is a foreign PEP may not be feasible or proportional, as not all foreign PEPs are involved in money laundering or terrorist financing, and some may have legitimate reasons to add a beneficiary to their life insurance policy.
Declining the request to add a beneficiary due to increased risk may also not be feasible or proportional, as it may violate the contractual rights of the PEP as the customer, and may not be necessary if the due diligence on the beneficiary does not reveal any red flags or suspicions.
References: https://complyadvantage.com/insights/peps-life-insurance/
https://www.cfatf-gafic.org/index.php/documents/fatf-40r/378-fatf-recommendation-12-politically-exposed-pers
NEW QUESTION # 182
Combating the Financing of Terrorism (CFT)]
The Wolfsberg Group has issued a number of documents since its inception aiming to:
- A. provide financial institutions with an industry perspective on effective financial crime risk management.
- B. provide a standardized process amongst its bank members for combatting money laundering and terrorist financing in private banking.
- C. prevent money laundering or terrorist financing by establishing consistent regulatory standards across the EU.
- D. provide advice to regulators around the world on the due diligence requirements for politically exposed persons.
Answer: A
Explanation:
The Wolfsberg Group is an association of thirteen global banks that aims to develop guidance and standards for the management of financial crime risks. The Group has issued a number of documents since its inception to provide financial institutions with an industry perspective on effective financial crime risk management.
NEW QUESTION # 183
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