Get Real CAMS Exam Dumps [May-2024] Practice Tests

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NEW QUESTION # 207
A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official. Recently a negative news search revealed political corruption in the home country of the official.
To whom should this situation be escalated?

• A. The line of business executive
• B. The Financial Action Task Force's PEP Hotline
• C. The bank's anti-money laundering officer
• D. The board of directors

Answer: C

NEW QUESTION # 208
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?

• A. Flag filters with no history of generating an alert for removal
• B. Compare settings to organizations within its peer group
• C. Review parameter settings based on the latest risk assessment
• D. Calibrate parameters based on staffing capabilities to clear alerts

Answer: C

Explanation:
Reviewing parameter settings based on the latest risk assessment should be included in the evaluation of system settings for anti-money laundering alert surveillance. This is because parameter settings determine the thresholds and criteria for generating alerts based on the risk profile of the customers, products, services, channels, and jurisdictions involved in the transactions. A risk assessment is a periodic and comprehensive analysis of the potential money laundering and terrorist financing risks faced by an organization, and it should inform the design and implementation of an effective anti-money laundering program, including the alert surveillance system. By aligning the parameter settings with the risk assessment, an organization can ensure that the system is capturing the most relevant and high-risk transactions, and reducing the number of false positives or irrelevant alerts.
References:
CAMS Study Guide 6th Edition, page 37-38.
Implementing AML Transaction Monitoring Systems: Critical Considerations, page 2-3.
3 techniques to improve AML transaction monitoring strategies, page 2.

NEW QUESTION # 209
A student contacts a real estate broker to view a home but cancels last minute due to illness. The student wants to quickly buy the 800,000 USD home, which is overvalued, despite the broker's objections to the asking price. Which real estate red flags should the broker identify? (Select Three.)

• A. Anonymity
• B. Inconsistency
• C. Flow through
• D. Value
• E. Structuring
• F. Transaction speed

Answer: B,D,F

Explanation:
The scenario described in the question presents several indicators of potential money laundering through real estate, which the broker should be aware of and report accordingly. The most relevant red flags are:
Value: The student wants to buy a home that is overvalued, meaning that the asking price is higher than the market value or the appraisal value of the property. This could indicate that the student is trying to launder a large amount of illicit funds in one transaction, or that the seller is colluding with the student to inflate the price and receive a kickback. Overvaluing or undervaluing properties is a common technique used by money launderers to manipulate the price of real estate and conceal the source or destination of their funds12.
Inconsistency: The student's behavior and profile are inconsistent with the typical characteristics of a legitimate home buyer. The student cancels the viewing of the home at the last minute due to illness, which could suggest a lack of interest or a pretext to avoid scrutiny. The student also wants to buy an expensive home despite being a student, which could indicate a discrepancy between the student's income and the source of funds. Moreover, the student disregards the broker's objections to the asking price, which could imply that the student is not concerned about the value or quality of the property, but rather the amount of money that can be laundered through it34.
Transaction speed: The student wants to quickly buy the home, which could indicate a sense of urgency or pressure to move the illicit funds before they are detected or seized by the authorities. Money launderers often use fast transactions to avoid raising suspicion or leaving a paper trail. Transaction speed is especially relevant when combined with other red flags, such as cash payments, anonymous buyers, or overvalued properties5 .
References:
Understanding Money Laundering in Real Estate
RED FLAG INDICATORS FOR REAL ESTATE SECTOR
Investigating Money Laundering through Real Estate
AML Red Flags Associated with Real Estate Sector Businesses
FinCEN Proposes Rule to Combat Money Laundering and Promote Transparency in Residential Real Estate
[ACAMS Study Guide, 6th Edition, Chapter 7, pp. 200-201]

NEW QUESTION # 210
One key aspect of the Office of Foreign Assets Control's extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity.
Under which three circumstances are U.S. banks required to block transactions? (Choose three.)

• A. Those that are in connection with a transaction in which a blocked individual or entity has an interest
• B. The transactions are to, or go through, a blocked entity
• C. Those that are in connection with a transaction in which a blocked individual or entity has no interest
• D. Those that are by or on behalf of a blocked individual and a licensed entity
• E. Those that are by, or on behalf of, a blocked individual or entity

Answer: A,B,E

Explanation:
Explanation
U.S. law requires that assets and accounts of an OFAC-specified country, entity, or individual be blocked when such property is located in the United States, is held by U.S. individuals or entities, or comes into the possession or control of U.S. individuals or entities.
For example, if a funds transfer comes from offshore and is being routed through a U.S. bank to an offshore bank, and there is an OFAC-designated party to the transaction, it must be blocked. The definition of assets and property is broad and is specifically defined within each sanction program.
Assets and property includes anything of direct, indirect, present, future, or contingent value (including all types of bank transactions). Banks must block transactions that:
* Are by or on behalf of a blocked individual or entity;
* Are to or go through a blocked entity; or
* Are in connection with a transaction in which a blocked individual or entity has an interest.

NEW QUESTION # 211
What are three indicators of money laundering associated with using electronic funds transfers? Choose 3 answers

• A. Funds transfers to or from a financial secrecy haven without an apparent business reason
• B. Payment or receipts with no apparent link to legitimate contracts, goods or services
• C. Funds transfers are received or sent from the same person to or from different accounts
• D. Regular and frequent transfers from the account of a large company said to be payment forgoods bought on credit

Answer: A,B,C

NEW QUESTION # 212
What are two sources for maintaining up-to-date sanctions information? (Choose two.)

• A. U.S. Department of the Treasury - Section 311 - Special Measures
• B. Financial Action Task Force's list of High Risk and Non-Cooperative Jurisdictions
• C. U.S. Department of the Treasury Office of Foreign Assets Control
• D. U.S. Federal Bureau of Investigation's National Security Letters

Answer: B,C

Explanation:
Explanation/Reference: https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_lists.aspx#search

NEW QUESTION # 213
A compliance officer at a large financial institution has been tasked by senior management to lead a team in an internal review and potential revision of the institution's customer onboarding program following a regulatory enforcement action of another institution.
Which step should the compliance officer perform first?

• A. Reviewing the institution's risk assessment
• B. Conducting enhanced due diligence on high risk customers
• C. Resolving substantive discrepancies in customer verification
• D. Revising training materials for frontline staff

Answer: A

Explanation:
The compliance officer should perform the first step of reviewing the institution's risk assessment before implementing any changes to the customer onboarding program. The risk assessment is a key component of the AML compliance program, as it identifies and measures the institution's exposure to money laundering and terrorist financing risks. The risk assessment should be updated regularly and reflect the institution's products, services, customers, geographic locations, and delivery channels. By reviewing the risk assessment, the compliance officer can determine the adequacy and effectiveness of the current customer onboarding program and identify any gaps or weaknesses that need to be addressed. The compliance officer can also benchmark the institution's risk assessment against the regulatory expectations and best practices in the industry.
The other steps are also important, but they should be performed after the risk assessment review. Revising training materials for frontline staff, conducting enhanced due diligence on high risk customers, and resolving substantive discrepancies in customer verification are all part of the customer onboarding program, but they depend on the risk assessment to provide the appropriate level of controls and procedures. For example, the training materials should reflect the risk assessment results and the revised customer onboarding policies. The enhanced due diligence should be applied to customers who pose a higher risk according to the risk assessment criteria. The customer verification should be consistent with the risk assessment and the customer identification program.
References:
AML KYC Onboarding Lifecycle Process Flow | Guide - AdvisoryHQ
New EBA AML Guidelines on the use of Remote Customer Onboarding Solutions - Bird & Bird KYC Onboarding Process 2023 - AML requirements - Sumsub Review of any AML/CFT program begins with the Risk Based Approached. It should first check the internal system to identify risk factors and design program accordingly.

NEW QUESTION # 214
A bank sells reloadable open-loop prepaid cards to both customers and non-customers.
What is a red flag associated with these cards that may indicate money laundering?

• A. A bank customer historically purchases several prepaid cards near year-end.
• B. A bank customer routinely purchases five prepaid cards in small even-dollar amounts on a monthly basis.
• C. A non-bank customer consistently uses the bank to obtain cash advances using a prepaid card.
• D. A non-bank customer regularly loads large amounts of cash onto several prepaid cards.

Answer: D

NEW QUESTION # 215
A law enforcement agency is reviewing a suspicious transaction report (STR) filed by a financial institution for suspicious activity on a client's account.
Subsequently, the agency requests further information.
Which supporting documentation might the law enforcement agency request from the institution to facilitate its investigation?

• A. Copies of promotional materials sent to the customer
• B. A copy of the institution's STR policy and procedures
• C. Previously filed STRs on the same customer
• D. Account opening documents and account statements

Answer: D

NEW QUESTION # 216
When providing reporting of STRs to the board, which of the following should be provided?

• A. A numerical summary of all the STRs
• B. All the STRs filed with the national FIU
• C. A numerical summary of all the STRs and a summary of key STRs, including PEPs, key employees
• D. A summary of all key STRs, including PEPs and key employees

Answer: D

NEW QUESTION # 217
Which assessments are involved in the processes of mutual evaluation and follow-up by the FATF?

• A. Sanction risk assessments and the country's National Risk Assessment
• B. Technical compliance assessments and effectiveness assessment
• C. Country audit assessments and transaction monitoring assessments
• D. Risk assessments and technical standards assessments

Answer: B

NEW QUESTION # 218
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 Officier's 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?

• A. Place these memos in his personal files in case they are subsequently requested
• B. Call the law enforcement agent and suggest he modify the legal request to include these memos
• C. Ask the bank president to document his instructions to the specialist
• D. Advise the bank's senior legal advisor of the situation

Answer: D

NEW QUESTION # 219
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?

• A. Flag filters with no history of generating an alert for removal
• B. Compare settings to organizations within its peer group
• C. Review parameter settings based on the latest risk assessment
• D. Calibrate parameters based on staffing capabilities to clear alerts

Answer: C

NEW QUESTION # 220
Who meets the standard to perform the AML audit? (Select Two.)

• A. An internal auditor with a family member employed in the AML department
• B. A consultant previously employed in the AML department within the past 2 years
• C. A consultant with limited knowledge and experience in AML but many years of internal audit experience
• D. Qualified bank staff if not involved in the AML function being tested
• E. An internal auditor with the requisite knowledge and expertise of AML

Answer: D,E

Explanation:
Explanation
An internal auditor with the requisite knowledge and expertise of AML: An internal auditor with sufficient knowledge and expertise in AML regulations and compliance requirements can perform the AML audit.
Qualified bank staff if not involved in the AML function being tested: Qualified bank staff who are not involved in the AML function being audited can perform the AML audit.

NEW QUESTION # 221
What is a method of placement that can be used by a money launderer in a deposit taking institution?

• A. Withdrawing large amounts of cash from the money launderer's account
• B. Sending a large number of funds transfers between accounts
• C. Depositing cash into the money launderer's account
• D. Depositing cashier's checks and money orders into the money launderer's account

Answer: D

Explanation:
Explanation/Reference: https://www.investopedia.com/terms/m/moneylaundering.asp

NEW QUESTION # 222
A bank's anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.
Which two facts should be considered during the course of an investigation into this matter? (Choose two.)

• A. The customer has had a long-standing account at the bank
• B. The customer in on the exempt list for currency transaction reporting requirements
• C. The customer's account has had a large volume of activity, but the month-end balance is usually low
• D. The customer is issuing a number of wires to several relatively high-risk jurisdictions

Answer: C,D

NEW QUESTION # 223
When implementing a risk-based approach related to casinos, which risks are related to the customer as an individual? (Choose two.)

• A. Use of casino deposit accounts by the customer
• B. Customer from a high-risk country
• C. Improper use of third parties as customers
• D. Casual customers
• E. Transfer between customers

Answer: A,C

NEW QUESTION # 224
Which Trust parties should be identified to determine the true nature of the Trust relationship according to Basel guidelines? (Choose three.)

• A. Settlors/grantors
• B. Beneficiaries
• C. Trustees
• D. Payees
• E. Trust Administrators
• F. Respondents

Answer: A,B,C

Explanation:
According to the Basel guidelines on customer due diligence for banks, a trust is a legal arrangement whereby a person (the settlor or grantor) transfers the legal ownership of specific assets to another person or entity (the trustee) to hold for the benefit of a third person or persons (the beneficiaries)1. The Basel guidelines recommend that banks should identify and verify the identity of the following parties to determine the true nature of the trust relationship:
The trustee, who is the person or entity that has the legal authority and duty to manage the trust assets and distribute them to the beneficiaries according to the trust deed2. The trustee may also be the settlor, the beneficiary, or both, depending on the type and structure of the trust3.
The beneficiaries, who are the persons or entities that have a beneficial interest in the trust assets or income, either presently or in the future4. The beneficiaries may be named individuals, classes of persons, or charitable causes.
The settlor or grantor, who is the person or entity that creates the trust and transfers the legal ownership of the assets to the trustee. The settlor or grantor may also retain some rights or powers over the trust, such as the ability to appoint or remove trustees, beneficiaries, or protectors.
The other three options are incorrect because:
Respondents are not trust parties, but rather financial institutions that maintain correspondent banking relationships with other financial institutions. Respondents are not relevant for the identification of the trust relationship, but rather for the due diligence of the correspondent banking relationship.
Payees are not trust parties, but rather persons or entities that receive payments from the trust or other sources. Payees are not relevant for the identification of the trust relationship, but rather for the monitoring of the transactions and activities of the trust.
Trust administrators are not trust parties, but rather persons or entities that provide administrative services to the trust, such as accounting, record-keeping, or tax compliance. Trust administrators are not relevant for the identification of the trust relationship, but rather for the assessment of the risk and complexity of the trust.
References:
1: Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 17 2:
Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 17 3:
ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 111 4: Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 17 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 111 : Basel Committee on Banking Supervision, Customer due diligence for banks, October
2001, 4, p. 17 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 111 : Basel Committee on Banking Supervision, Customer due diligence for banks, October 2001, 4, p. 10 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 112 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 112

NEW QUESTION # 225
Which three are examples of best practices terms of ensuring an adequate AML program?

• A. Review applicable domestic and international AML guidance
• B. Perform a risk analysis on a regular basis and compare it to the coverage of the AML program
• C. Review the accuracy of account opening applications
• D. Engage an independent party to perform a periodic review of the program

Answer: A,B,C

NEW QUESTION # 226
A US casino customer has won 55,518 USD. The customer goes to the casino cashier cage to execute some transactions. Which ^transactions are an indicator of money laundering? (Select Two.)

• A. The customer transfers 50.000 USD to another personal bank account located in the customer's resident country.
• B. The customer transfers all the winnings to another personal bank account located outside the customer's resident country.
• C. The customer requests the cashing out of the winnings in checks under 10.000 USD.
• D. The customer transfers 100.000 USD to another personal bank account located outside the customer's resident country,
• E. The customer requests the cashing out of the winnings in a single check.

Answer: C,D

Explanation:
These options involve transferring funds to another country, which could indicate cross-border movement of illicit funds, and cashing out winnings in checks under 10,000 USD, which could indicate structuring to avoid reporting thresholds. The other options do not seem as suspicious or relevant to money laundering.

NEW QUESTION # 227
When requested by law enforcement via legal process to provide records or documentation, what should the officers of financial institution do?

• A. Not act on the legal process until the bank officer has contact w4h the agent and learns what the agent is investigating
• B. if there is no basis for contesting the request, provide what is requested
• C. Refuse to provide any records or documents until the agent narrows the scope of the request down to what he or she actually needs
• D. Provide all records and documents the officer believes would be pertinent to the law enforcement agent's investigation

Answer: A

NEW QUESTION # 228
A compliance officer learns from an Information Technology (IT) source of a potential new financial service being discussed by the new product approval committee.
What is the correct next course of action?

• A. Request that the new product approval committee include the compliance officer.
• B. Go to the board of directors and try to shut the new service down immediately because the committee did not communicate with the compliance officer.
• C. Start initial research into potential risks but wait until notified that the service has been approved by the committee before initiating extensive research.
• D. Get as much information as possible from the source so that potential risks can be researched and a report prepared and presented to the head of marketing.

Answer: C

Explanation:
Explanation

NEW QUESTION # 229
An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.
What is primary consideration the institution should keep in mind when deciding whether to agree to this request?

• A. The anticipated cost of complying with the law enforcement request
• B. The number of suspicious transaction reports previously filed on the client
• C. The fact that the institution has a solid record in complying with law enforcement requests
• D. Whether the institution can continue to meet its regulatory obligations with the accounts open

Answer: D

NEW QUESTION # 230
According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its management?

• A. The compliance function
• B. The credit risk department
• C. A peer institution
• D. The Board

Answer: A

NEW QUESTION # 231
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The CAMS certification is an important credential for professionals working in the AML field. It demonstrates a commitment to excellence and a deep understanding of AML laws, regulations, and best practices. Whether you are just starting your career in AML or you are a seasoned professional, the CAMS exam is an excellent way to enhance your skills and advance your career.

 

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