Acams CAMS-FCI Exam Practice Test Instant Access

Question 1

An AML investigator at a bank identifies an unusually high number of deposits from a few customers resulting from the encashment of multiple gambling tickets from a legitimate gambling company. It is noted that the transactions are inconsistent with the customers' profiles and that reverse (corrective) transactions did not occur. Which suspicious activity is most likely?

AThe winning tickets are traded to criminals who. in turn, use the customers' accounts.

BThe gambling company created fictitious transactions in an attempt to misrepresent the size of its business activity.

CThe customers are attempting to evade income tax.

DThe customers deposited fake winning tickets.

Answer : A

The correct answer is A because this scenario describes a possible case of ticket laundering, which is a form of money laundering where criminals use gambling tickets to disguise the source of their illicit funds. The customers who deposit the tickets are either complicit or unaware of the scheme, and they receive a commission or a fee for their service. The other options are not likely because they do not explain why the customers would deposit multiple tickets from the same gambling company and withdraw cash the next day.

Question 2

According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)

AThe responsibility and authority in the structure

BThe management structure of the trust

CThe source of funds in the structure

DThe general purpose behind the structure

EThe general nature of business of the trust

Answer : A, D

Here is the exact information from the Financial Action Task Force (FATF) Guidance for a Risk-Based Approach for Trust and Company Service Providers:

'Understanding the management and ownership structure of a trust is crucial in assessing the ML/TF risk it poses. This includes the identity of all settlors, trustees and beneficiaries, and their respective roles and responsibilities, as well as the nature and purpose of the trust.'

'TCSPs should obtain and maintain up-to-date information on the purpose and intended nature of the business relationship, the source of funds and wealth, and where relevant, the source of funds or wealth of the settlor and beneficiaries.'

Based on this information, the correct answers are A and D. Trust and Company Service Providers must understand the responsibility and authority in the structure, as well as the general purpose behind the structure in order to assess the overall risk of the trust and ensure that any transactions with the trust are legitimate.

Question 3

A U.S. financial institution (Fl) receives a grand jury subpoena for a corporate client's account. The Fl should:

Arequest the client's consent for the disclosure of account information.

Breview the corporate account's activity and transactions.

Cfile a SAR/STR.

Dprovide the client with a copy of the subpoena.

Answer : B

The Fl should review the corporate account's activity and transactions. This is because a grand jury subpoena is a legal request for information or testimony that may be used in a criminal investigation or prosecution. The Fl should review the account for any suspicious or unusual activity that may be related to the subpoena or indicate money laundering, terrorist financing, or other financial crimes. The Fl should also document its review and retain any relevant records.

Question 4

Which actions should financial institutions perform to ensure proper data governance? (Select Three.)

AEstablish an appropriate data management method for collecting and storing information.

BEnsure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems.

CFor customers who are determined to be at high risk, review their risk rating and apply risk mitigation measures as appropriate.

DPeriodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records.

EEvaluate the nature of foreign remittance under a risk-based structure of AML/CFT and take necessary measures in accordance with the risk-based approach.

FReview significant discrepancies between the values of the product reported on the invoice and the fair market value.

Answer : A, B, D

Financial institutions should perform the following actions to ensure proper data governance:

Establish an appropriate data management method for collecting and storing information. This is important to ensure that the data is consistent, reliable, and accessible for various purposes, such as risk assessment, compliance reporting, and customer service. Data management methods may include defining data standards, policies, and procedures; implementing data quality controls and validation checks; and using appropriate data storage systems and formats.

Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems. This is important to comply with the anti-money laundering and counter-terrorist financing (AML/CFT) requirements, such as customer due diligence, transaction monitoring, and suspicious activity reporting. Accurate and complete customer and transaction data also enables financial institutions to use IT systems more effectively for data analysis, risk management, and decision making.

Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records. This is important to ensure that the data remains up-to-date, relevant, and reliable over time. Data validation may include verifying the source and quality of the data; identifying and correcting any errors or inconsistencies; and updating or deleting any obsolete or redundant data.

Data Governance for Financial Institutions - Capgemini

Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements - OSFI

Question 5

Which payment method for purchasing luxury items is a red flag for potential money laundering?

APersonal loan

BCash

CWire transfer

DCredit card

Answer : B

According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1].

Question 6

How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

AMutual evaluation

BFATF Evaluation Committee

CBasel Committee

DSeries of internal audits followed by reporting to FATF

Answer : A

'The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a mutual evaluation process. During a mutual evaluation, the FATF assesses a country's legal and institutional framework, its implementation of measures to combat money laundering and terrorist financing, and the effectiveness of its efforts. The FATF then issues a report with recommendations for improvement' [CAMS Study Guide 6th edition, page 15-16].

Question 7

SAR/STR NARRATIVE

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

Client Information:

Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North Americ

a. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

Beneficiary Information:

As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for the purchase of property in another country.

Payment Reference:

ABCXXXXX31PZFG2H

ABCXXXXXX51PQGEH

ABCXXXXXX214QWVG

ABCXXXXXX41PSXA2

ABCXXXXXX815QWS3

Concerns:

* We are unsure about the country of incorporation of the beneficiaries.

* We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

* There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

* Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

* The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in real estate business which again poses a higher risk.

When drafting the SAR/STR narrative, the investigator notes several payment references. What additional information should the investigator include in the narrative?

AThe investigator's concerns based on their subjective opinion

BThe suspicious accounts and transactions identified

CAll relevant tables, spreadsheets, and other supporting documentation

DPersonal tax records pertinent to the owners to indicate tax evasion

Answer : B

The SAR/STR narrative should include the suspicious accounts and transactions identified, as well as the reasons why they are considered suspicious. The narrative should provide a clear and concise description of the activity, the parties involved, the dates, amounts, and frequencies of the transactions, and any other relevant information that would assist law enforcement in understanding the nature and purpose of the activity. The narrative should not include the investigator's subjective opinion, personal tax records, or supporting documentation that is not essential to explain the suspicious activity. Supporting documentation can be attached separately to the SAR/STR form or provided upon request by law enforcement.

Acams Advanced CAMS-Financial Crimes Investigations CAMS-FCI Exam Practice Test