ACAMS Certified Anti-Money Laundering Specialists (the 6th edition)

QUESTION NO: 1
Why do organized crime groups often use front companies? (Choose two).

A. Because using multiple front companies can make it easier to control an entire sector of the economy. B. Because they are generally subject to lighter due diligence requirements by banks and other financial services providers. C. Because they can use the company's bank accounts to comingle deposits with those of legal businesses. D. Because they are not registered, front companies are not subject to income and other sales taxes. E. Because front companies generally charge higher prices than legitimate companies, so profit margins are higher.

Correct Answer: A,C

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QUESTION NO: 2
A compliance officer at a financial institution (FI) received an investigation request for a customer from a local law enforcement agency. Which action should be taken by the FI?

A. Omit some responses to meet the regulatory deadline. B. Obtain approval from the Financial Intelligence Unit (FIU) before submitting the customer's information. C. Consider retaining qualified, experienced legal counsel. D. Assign employees responsible for the customer to the investigation team.

Correct Answer: C

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QUESTION NO: 3
According to the Financial Action Task Force, financial institutions should exit the relationship with a client in which case?

A. There is a change in ownership structure. B. The client is a politically exposed person. C. The country of incorporation has been elevated to high-risk. D. The client refuses to update information.

Correct Answer: D

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QUESTION NO: 4
Which statement is true regarding the Financial Action Task Force standards for suspicious activity reports (SARs) information sharing within a financial group?

A. Financial institutions cannot share customer information at all since it is confidential. B. Financial institutions should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes. C. Financial institutions must require approval from regulators to share SARs information and supporting documentation. D. Financial institutions must retain copies of SARs and supporting documentation for five years from the date of filing the SARs.

Correct Answer: B

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QUESTION NO: 5
A bank teller receives a written request from a police officer to review a previous customer's account on a pre- populated form with the officer's official letterhead. The officer suspects the previous customer is engaging in smurfing. Which action should the bank teller perform?

A. Escalate the police officer's request for the customer's account information to the compliance officer. B. Provide the police officer the customer's account information after management approval. C. Provide the police officer the customer's account information. D. Reject the police officer's request for the customer's account information and escalate to the compliance officer.

Correct Answer: A

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QUESTION NO: 6
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?

A. Financial institutions should not keep anonymous accounts. B. If financial institutions suspect that funds stem from criminal activity, they should be required to close the account. C. Financial institutions should maintain all necessary suspicious transaction report records on transactions, both domestic are international, for at least 5 years. D. Financial institutions should not warn their customers when information relating to them is being reported to the competent authorities.

Correct Answer: C

QUESTION NO: 7
What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)

A. Correspondent banking is an inherently high risk business and all correspondent bank relationships should be reviewed on an annual basis. B. An Institution may assign a low risk rating to a correspondent bank located in a jurisdiction deemed to have an adequate AML environment (e.g., Financial Action Task Force member country) without needing to consider other factors C. At least one person, aside from the person sponsoring the relationship, should approve the correspondent relationship. D. Factors such as politically exposed person involvement and downstream (nested) correspondents increase the risk inherent in a correspondent relationship.

Correct Answer: C,D

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QUESTION NO: 8
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?

A. There is a conflict of interest with the management of the review process B. The review must be performed by a group outside of the bank C. The final report must be presented directly to the board of directors D. Independent reviews must be performed annually

Correct Answer: C

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QUESTION NO: 9
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?

A. Action was brought against the MLRO because banks cannot be found liable for AML program deficiencies. B. The MLRO is the only individual that can be held responsible for AML program deficiencies. C. The MLRO agreed to the civil penalty so that the bank would not be found liable for the AML program deficiencies. D. MLROs can be held to an individual accountability standard and face potential penalties for contributing to AML program deficiencies.

Correct Answer: D

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QUESTION NO: 10
Which of the following is one of the pillars of the EU AML Package adopted in June 2024?

A. 7th AML Directive B. EU AML Regulation C. Digital Operational Resilience Act D. Anti-Corruption Directive

Correct Answer: B

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QUESTION NO: 11
Which transaction monitoring processes would alert a bank for red flag activity?

A. A client makes a prepayment on their credit card and a week later makes multiple cash withdrawals using an automated teller machine (ATM) in a foreign country. B. The company has a name that is similar to that of a company whose directors are named on the bank's internal blacklist. C. A client who does not typically make extravagant credit card purchases books an airline ticket on a travel website. D. A charity account receives multiple electronic transfers and then sends a wire transfer to a higher-risk country.

Correct Answer: D

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QUESTION NO: 12
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?

A. Seize Bank A's $5 million correspondent account in the U.S. B. Seize $5 million from the non-U.S. branch of Bank A where the WTS' account is located. C. Seize $1 million from Bank A's correspondent account in the U.S. D. Seize WTS' $1 million account at the non-U.S. branch of Bank A.

Correct Answer: C

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QUESTION NO: 13
A real estate buyer purchases multiple high-value properties in cash through a series of transactions in a short period of time and without any clear economic justification.
Which of the following is the most likely money laundering risk associated with this behavior in the real estate sector?

A. The buyer is using high-value real estate transactions to obscure the origin of the funds. B. The buyer is a real estate developer acquiring multiple properties for a potential redevelopment project with a business partner located in a high-risk jurisdiction. C. The buyer is quickly diversifying their investment portfolio through structuring payments in order to take advantage of the liquidity of cash transactions in real estate. D. The buyer is capitalizing on favorable market conditions and using cash purchases to outbid competitors in a competitive real estate market using insider information.

Correct Answer: A

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QUESTION NO: 14
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?

A. The USA PATRIOT Act B. The 6th EU AML Directive C. Regulations of the OFAC, US Department of Treasury D. The FinCEN CDD Final Rule

Correct Answer: A

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QUESTION NO: 15
Money laundering red flags associated with money service businesses include: (Select Two.)

A. cash payments on insurance policies by a third party. B. an employee lives a lavish lifestyle supported by his or her salary. C. two or more customers use the same identification for separate and unrelated transactions. D. the same customer conducts transactions in multiple locations in a short time period. E. repeated receipt of funds transfers from virtual currency exchanges.

Correct Answer: C,D

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ACAMS Certified Anti-Money Laundering Specialists (the 6th edition) - CAMS Exam Questions