How To Pass Certified Anti-Money Laundering Specialist (CAMS) Exam Successfully?

1. As a result of an audit, a policy exception was identified that had been approved by the compliance officer.

The auditor determined that the policy exception is a violation of a regulatory requirement.

What should the auditor do?

2. Which are red-flag indicators of possible money laundering through online gambling? (Choose two.)

3. 1.An organization uses an automated surveillance system that generates a very large volume of anti-money laundering alerts. The monthly volume of alerts has increased over the last year causing the compliance staff to fall significantly behind reviewing the alerts. As a result, the system settings are under review to determine if they are appropriate.

Which action should be included in the evaluation of system settings?

4. 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.)

5. What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

6. A local law enforcement officer notifies the bank compliance officer that he is working on an insurance fraud scheme that appears to be running transactions using the account of a bank employee. The law enforcement officer refers to a kiting suspicious transaction report filed by the compliance officer and requests further information.

What action should the compliance officer take?

7. What core objective does the Egmont Group suggest would lead to an effective national Financial Intelligence Unit (FIU)?

8. Which statements regarding the USA PATRIOT ACT best describe key aspects that have extraterritorial reach? (Choose three.)

9. Which three measures are contained in Financial Action Task Force 40 Recommendations for reporting suspicious activity? (Choose three.)

10. A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?

11. Which three entities does the Third European Union Money Laundering Directive apply to?

12. What action should a bank CEO's assistant take when the bank CEO expenses large sums of money to a charitable organization run by the bank CEO's direct family member?

13. With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

14. Bank A is a non-United States (U.S.) bank that has $5 million in a correspondent account at a bank in New York City. The Worldwide Terrorist Syndicate (WTS) has $1 million in its account at a non-US branch of Bank A. The U.S. government has initiated forfeiture action against the WTS.

Which potential action can the U.S. take under the USA PATRIOT ACT pursuant to the issuance seizure warrant?

15. The Board of Directors for a small private bank has asked the management to no longer apply the identity requirements for high net worth individuals to protect their privacy.

Which of the following Financial Action Task =once 40 Recommendations should cause an anti-money laundering specialist the most concern?

16. One area of responsibility for the Board of Directors when implementing a successful AML program is to:

17. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.

18. When should the anti-money laundering risk assessment be updated?

19. A local law enforcement officer, who is conducting a criminal investigation, requests information about a customer.

Which two actions should the bank take? (Choose two.)

20. Which statement about U.S. Specified Unlawful Activities (SUA) is true?

21. All security trading activities for that individual since 2004.

22. Who has the ultimate responsibility within a bank for ensuring that the bank has a comprehensive and effective Bank Secrecy Act / anti-money laundering (BSA/AML) program and oversight framework that is reasonably designed to ensure compliance with applicable regulations?

23. Which are common types of economic sanctions? (Choose three.)

24. Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)

25. Which method to finance terrorism involves falsifying transaction-related documents?

26. A division anti-money laundering officer for a financial institution has been conducting a monthly self-assessment.

The officer reviews the accounts opened for compliance with a long standing Know Your Customer policy.

The self-assessment for the latest month shows a significant increase in compliance deficiencies for the first time in more than a year.

Which of the following is the next course of action for the anti-money laundering officer to take?

27. Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws triggered an alert.

Which of the following should cause the most suspicion of money laundering?

28. An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. Because it is an o line bank the most important recommendation for the expert to make is that the bank

29. Which practices are dealers in antiques, precious metals, precious stones, jewelry, and art advised to follow to reduce the element of money laundering risk? Choose 3 answers

30. One of the red flags of microstructuring is:

31. What was the topic the Wolfsberg Group’s first guidance addressed?

32. FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:

33. Which three areas do FATF’s 40 recommendations cover? Choose 3 answers

34. Which two factors should increase the risk of a correspondent bank customer and require additional due diligence according to the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking? (Choose two.)

35. In order to protect investigative materials from disclosure when conducting an internal Investigation of any employee of a financial institution, legal counsel of that financial should________?

36. What is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled?

37. Based on the USA PATRIOT Act, what action might the US take to demonstrate extraterritorial reach?

38. A remittance company received a money order from a senior political figure m the Philippines to transfer a large sum of money to a charity group in the Philippines. A review of the charity group revealed a director having dose ties with a known terrorist group primarily financed through kidnapping and extortion.

What is a key risk indicator associated with terrorism financing?

39. The ultimate goal of economic sanctions is to:

40. 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?

41. A compliance analyst is reviewing recent activity between a publicly traded company and a company in a high risk jurisdiction.

Which detail suggests that escalation is warranted?

42. According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

43. Which statement identifies one of the duties of a government Financial Intelligence Unit?

44. Financial Action Task Force (FATF)-style regional bodies are created and obliged to understand the inherent money laundering and terrorist financing risks in the region of the world they serve.

What is one of the methods they use to understand these risks?

45. Which three should real estate agents include in the criteria to assess their company’s potential money laundering and terrorist financing risks when implementing a reasonable risk-based approach?

46. A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank’s jurisdiction.

Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.)

47. An anti-money laundering analyst is reviewing a new customer list to confirm potentially high risk customers have been identified and subject to enhanced due diligence.

Which new customer warrants enhanced due diligence?

48. What is a key objective of the Egmont Group?

49. A suspicious transaction report has been filed on an account owned by the wife of the bank’s ChiefExecutive Officer.

Which of the following is the most important consideration when deciding whether to recommend closing the account?

50. A bank account is established for a new business customer. The business was established five years ago with an address in another state. The business website contains few details other than stating it is a real estate business.

One principal has an international telephone number and appears to be living in another country. The other principal works out of a recreational vehicle.

What warrants enhanced due diligence in this scenario?

51. A potential client calls a broker-dealer wishing to purchase securities. The client does not appear to be concerned with any fees associated with the account or price of the securities. Further information provided by the potential client indicates the individual may have relatives working for a company in which the potential client wants to invest.

Which type of activity is the potential client attempting to commit?

52. Which of the following is the financial stage of money laundering?

53. 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?

54. A Money Laundering Reporting Officer's (MLRO) lack of action led to deficiencies in the bank's AML program and a civil monetary penalty being levied against the MLRO.

Why was this direct action taken against the MLRO?

55. Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers

56. Which statement best describes a key aspect of the AML Directive of the EU regarding business relationships and transactions with high-risk third countries?

57. Which is a key aspect in the FATF Recommendations that best describes the essential foundation for allocating resources in AML/CFT regimes for countries and financial institutions (FIs)?

58. A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international banks located there.

During on-boarding, the client's wealth was estimated at $7 million. Shortly thereafter, the client's father became president of Country B. During a routine client review two years later, it was identified that client's wealth had grown to $510 million.

What are two red flags that indicate money laundering or financial terrorism? (Choose two.)

59. A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank’s corporate audit department will conduct the review.

The compliance officer will review the final report before it is released to the Board of Directors.

What is the issue with this situation?

60. Which key factor would result in the decision for a financial institution (FI) to exit a client relationship?

61. On who does the ultimate responsibility for an institution’s anti-money laundering program rest?

62. A bank has opened a new account for a well-known attorney to manage client funds. During the first six months, bank staff observe the account receives multiple deposits via wire transfer. They also observe that the attorney withdraws cash, makes payments to various people, and transfers funds to the law firm’s account online.

What is considered a red flag for potential money laundering in this situation?

63. Which of the following customers require the most enhanced due diligence?

64. 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

65. Which of the following competent authorities should directly receive suspicious or unusual transaction reports?

66. A law enforcement agent calls a bank anti-money laundering investigator for supporting information about a suspicious transaction report that was filed the previous month.

How should the investigator respond?

67. What does the Basel Committee’s Customer Due Diligence for Banks paper suggest that a bank needs to have in place when establishing an account for a corporate business entity?

68. Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?

69. What are four key elements that a KYC program should contain according to the Basel Committee requirements?

70. A compliance officer provides an overview of the bank’s anti-money laundering program to a group of new tellers during employee orientation.

Which training element should be delivered to this audience?

71. A Trust and Company Service Provider (TCSP) providing services should have policies and procedures in place to identify critical information of the:

72. Which situation is the highest risk for money laundering and terrorist financing activity?

73. Which is a key role of FATF-Style Regional Bodies (FSRBs)?

74. 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?

75. Which is the main objective when a financial institution (FI) conducts an investigation?

76. Trusts established in certain offshore jurisdictions make good vehicles to lay under money for which of the following reasons?

77. In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?

78. Which three methods are commonly used by an accountant to launder money? (Choose three.)

79. What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?

80. An AML compliance officer receives notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council.

Which would be the most appropriate step to take?

81. The main purpose of the US Treasury Department for OFAC's extraterritorial reach is to:

82. A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds.

Which allows the US authorities to seize the funds of the foreign bank held with the US bank?

83. A compliance officer is reviewing the activity of the wire transfer department for the previous month and identifies an unusual wire transfer from a customer’s account.

Which information should be included in the review of the customer’s activity?

84. Which action should countries take related to the financing of terrorist acts in accordance with the Financial Action Task Force 40 Recommendations?

85. To what extent should senior management and the Board of Directors be involved in the filing of any STR?

86. In the summer, an institution identifies anti-money laundering concerns regarding a customer’s account activity. The customer, an ice cream, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks.

Which two transaction types warrant investigation? (Choose two.)

87. An anti-money laundering specialist working at a bank just received a legal request from a law enforcement agency mandating the release of all financial transaction records relating to an account at the bank. The specialist immediately recognizes the account as one owned by the bank Chief Executive Officers brother. During research to gather the requested documents, the specialist finds several internal memos he had sent to the bank president with concerns regarding possible suspicious activity relating to this account. The specialist recalls the bank president verbally responded to each memo with an explanation of the activity and indicated there was no cause for concern.

What should the specialist do with respect to these internal memos?

88. A customer brings $15,000 worth of chips into a casino and plays various games. The customer redeems all the remaining chips and requests a wire transfer of the proceeds to an unrelated third party.

What are two red flags that indicate money laundering? (Choose two.)

89. A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $ 1,250,000 from a dealer in Benin in West AfricA. All wires originated from Benin and were in increments of $50,000.

Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account activity identify the vehicles but cannot easily be tied to the wires receives.

What is the suspicious behavior?

90. What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

91. A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.

This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.

The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.

What action should the specialist take next?

92. According to the Basel Committee on Banking Supervision, banks should deal with high-risk customers by:

93. Which two statements in the Wolfsberg Group’s “Suppression of the Financing of Terrorism” define the role financial institutions should play in the fight against terrorism? (Choose two.)

94. The anti-money laundering specialist of a small bank has identified suspicious activity at a branch located in an area of town where drug dealers are known to operate. An investigation of this activity discloses that the suspicious transactions occurred within the last 3 months and were processed by the same teller (cashier). The teller (cashier) did not file an internal report of unusual activity on these transactions. When checking personnel files, the specialist finds that the teller (cashier) has been a trusted employee for over 15 years, has an impeccable work record, and has participated in several anti-money laundering training sessions. The specialist recently became aware that the employee's daughter has contracted a rare disease and is undergoing a very expensive treatment program. Regarding the teller's (cashier's) failure to report the unusual activity to the institution, the specialist should recommend

95. The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.

Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

96. Why do organized crime groups often use front companies? (Choose two).

97. How can violations of anti-money laundering laws be a risk to individuals?

98. A banker in the credit department wants to assess the risk of all customers, and contacts the compliance officer to request a list of customers with suspicious transaction report filings.

What should be done to protect suspicious transaction report information?

99. Which should authorities do to safeguard AML information exchanged with other countries?

100. 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?

101. Which function provided by lawyers can be useful to a potential money launderer as documented by FATF in its typology report 2000-2001? Choose 3 answers

102. A customer living in a high-risk jurisdiction makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other high-risk jurisdictions.

What are two red flags that may indicate money laundering? (Choose two.)