Acams CAMS Exam Practice Test Instant Access

Question 1

The AML investigator is reviewing the transaction monitoring alerts and the customer's historical profile for the past two years. A review of the negative news search from a blog indicates

that the customer was previously part of a terrorist group. Which activities warrant further escalation? (Select Two.)

AThe customer remitted monies in several transactions to the account of a recognized charity non-profit organization.

BThe customer has bought and sold several real estate properties over the last year.

CThe credit transactions in the account relate mostly to salary and rental income from property.

DThe account received a large cash deposit followed by systematic automated teller machine (ATM) withdrawals until the balance was nominal.

EThe customer conducts multiple cash transactions on a regular basis which do not match the customer's occupation.

Answer : D, E

1. D. The account received a large cash deposit followed by systematic automated teller machine (ATM) withdrawals until the balance was nominal.

This pattern of behavior, known as ''structuring'' or ''smurfing,'' is often associated with money laundering. The large cash deposit followed by smaller withdrawals in a systematic manner raises red flags and requires further investigation.

2. E. The customer conducts multiple cash transactions on a regular basis which do not match the customer's occupation.

Conducting frequent cash transactions that do not align with the customer's stated occupation or income source is suspicious. It suggests potential attempts to hide the true origin of funds or evade reporting requirements1.

D . Large Cash Deposit Followed by ATM Withdrawals:

The large cash deposit followed by systematic ATM withdrawals is indicative of structuring, a common money laundering technique. Structuring involves breaking down large sums of money into smaller transactions to avoid detection. In this case, the customer's behavior warrants further scrutiny to determine the purpose behind these transactions.

E . Inconsistent Cash Transactions:

When a customer conducts multiple cash transactions that do not align with their stated occupation or income source, it raises suspicions. Such behavior may indicate an attempt to obscure the true origin of funds or evade reporting requirements. Investigating the reasons behind these inconsistent cash transactions is essential to assess potential money laundering risks1.

Question 2

Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?

AThe investigator may remove the evidence collected without asking permission to do so.

BThe central authority of the requesting country sends a letter of request to the central authority of the other country.

CAn investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.

DThe central authority that receives the request sends it to a local judicial officer to find out if the information is available.

Answer : B

The first valid step in the Mutual Legal Assistance Treaty (MLAT) international cooperation process is for the central authority of the requesting country to send a letter of request to the central authority of the other country. The letter of request should provide a summary of the facts and information required,the reasons for the request, and any specific legal or procedural requirements that need to be met. (CAMS Manual, 6th Edition, Page 233).

Question 3

When assessing and managing money laundering risks while operating in foreign jurisdictions different from that of the head office, an effective AML monitoring program should:

Aprovide all foreign jurisdiction reports to the head office for approval.

Bbe tailored to the higher of standards between the jurisdictions.

Cbe consistent with the head office audits.

Dconform to the foreign jurisdiction policies to align with the head office policies.

Answer : D

When assessing and managing money laundering risks while operating in foreign jurisdictions different from that of the head office, an effective AML monitoring program should conform to the foreign jurisdiction policies to align with the head office policies. This ensures that the organization's AML/CFT risk management remains consistent across all jurisdictions, while allowing local compliance staff to assess and manage the risks specific to their jurisdiction. Additionally, the program should be tailored to the higher of standards between the jurisdictions, and should be consistent with the head office audits. Providing all foreign jurisdiction reports to the head office for approval is not necessary, as long as the program is consistent with the head office policies.

Question 4

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

AThe regulator authorities

BA member of senior management

CThe anti-money laundering specialist

DA qualified independent party/auditor

Answer : D

A qualified independent party/auditor is the most effective resource to evaluate the effectiveness of an anti-money laundering program. This is because an independent auditor can provide an objective and unbiased assessment of the program, identify any weaknesses or gaps, and make recommendations for improvement. An independent auditor can also verify the compliance of the program with the relevant regulations and best practices, and test the adequacy and functionality of the internal controls, customer due diligence processes, and transaction monitoring systems. An independent auditor can also help an organization prepare for regulatory examinations and audits, and avoid potential penalties or sanctions.

= The main references for this question are the following sources:

The document titled ''Frequently Asked Questions Conducting Independent Reviews of Money Services Business Anti-Money Laundering Programs'' published by the Financial Crimes Enforcement Network (FinCEN) in July 2010. You can access it by clickinghere.

The document titled ''AML Audit: How to Effectively Assess Your Compliance Program'' published by Alessa in May 2023. You can access it by clickinghere.

The document titled ''Mutual Evaluations'' published by the Financial Action Task Force (FATF). You can access it by clickinghere.

Question 5

Which statement is themost accuratein describing who mustcomply with Office of Foreign Assets Control (OFAC) sanctions?

AAll U.S. citizens and permanent residents regardless of where they are located, all U.S.-incorporated entities and their foreign branches, and all individuals and entities within the United States.

BAll U.S. citizens and permanent residents regardless of where they are located, all U.S.-incorporated entities excluding their foreign branches, and all individuals and entities within the United States.

CAll U.S. citizens except those with dual nationality, U.S. permanent residents, all U.S.-incorporated entities, and all individuals within the United States.

DAll U.S. citizens and permanent residents while located in the U.S., all U.S.-incorporated entities and their foreign branches, and all individuals within the United States.

US. Sanctions Compliance Framework by OFAC

Answer : A

OFAC sanctions apply extraterritorially, meaning U.S. persons must comply regardless of their location.

Option A (Correct):OFAC sanctions apply to all U.S. citizens, permanent residents, entities incorporated in the U.S. (including foreign branches), and individuals/entities within U.S. jurisdiction.

Option B (Incorrect):Foreign branches of U.S.-incorporated entities must comply with OFAC sanctions.

Option C (Incorrect):OFAC sanctions apply to all U.S. citizens, including dual nationals.

Option D (Incorrect):U.S. citizens and permanent residents must comply with OFAC sanctions even when located abroad.

Best Practices for OFAC Compliance:

Screen all transactions against the Specially Designated Nationals (SDN) list.

Ensure compliance programs extend to foreign branches and subsidiaries.

Monitor international business activities for potential sanctions violations.

OFAC Sanctions Guidelines (U.S. Treasury Department)

FATF Recommendation 7 (Targeted Financial Sanctions Compliance)

Question 6

What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers

ALimited types of institutions and persons covered by money laundering laws and regulations

BLittle enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering

CA large number of predicate crimes for money laundering

DAbsence of an effective FIU

Answer : A, B, D

Havens for money laundering and terrorist financing are jurisdictions that offer a high degree of anonymity, secrecy, and protection to criminals who seek to conceal or move their illicit funds.These havens typically have the following three attributes12:

Limited types of institutions and persons covered by money laundering laws and regulations. This means that only a narrow range of financial activities or entities are subject to anti-money laundering (AML) and combatting the financing of terrorism (CFT) obligations, such as customer due diligence, record-keeping, reporting, and supervision. For example, some havens may exclude lawyers, accountants, trust and company service providers, or non-bank financial institutions from AML/CFT requirements.

Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering. This means that the authorities in these havens lack the political will, resources, or capacity to effectively implement and enforce the AML/CFT laws and regulations. They may also impose low sanctions or fines for non-compliance, or create legal barriers or obstacles for the confiscation or freezing of assets that are the proceeds of, or used in, or intended or allocated for use in, money laundering, terrorist financing, or other crimes.

Absence of an effective FIU. This means that these havens do not have a central agency that is responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering, terrorist financing, and other crimes. An effective FIU is essential for facilitating domestic and international cooperation and information exchange, as well as for supporting investigations and prosecutions of money laundering and terrorist financing cases.

1: The IMF and the Fight Against Money Laundering and Terrorism Financing,12: IX Special Recommendations,2

Question 7

Which elements can trigger a review of the existing relationship during the opening of a new account? (Select Two.)

ARegular checks on the flow of funds

BRecent adverse media on the client

CA false positive result for name screening

DIncoming transfers from high-risk jurisdictions

EEstimated total income decrease

Answer : B, D

According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, elements that can trigger a review of the existing relationship during the opening of a new account include recent adverse media on the client (page 60) and incoming transfers from high-risk jurisdictions (page 61). The other elements listed, such as regular checks on the flow of funds, a false positive result for name screening, and an estimated total income decrease, are not triggers for a review.

Acams Certified Anti-Money Laundering Specialist v6 CAMS Exam Practice Test