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To become CAMS certified, candidates must pass a rigorous examination that tests their knowledge and skills in the field of AML/CTF. CAMS exam consists of 120 multiple-choice questions and is timed at four hours. Candidates must achieve a minimum score of 75% to pass the exam. Once certified, CAMS professionals are required to maintain their certification by earning 60 continuing education credits every three years to ensure that they stay up to date with the latest developments in the field.
NEW QUESTION # 49
A charity has unaudited accounts. Which of the following represents the highest risk factor for terrorist financing?
- A. Disbursement of funds to entities unrelated to the purpose of the charity.
- B. An international board composed of politically exposed persons.
- C. Frequent changes to the senior management of the charity.
- D. Frequent deposits from third parties into the charity's bank account.
Answer: D
NEW QUESTION # 50
What should a bank focus on to ensure on-going compliance with its AML program?
- A. It should review and update its transaction monitoring system
- B. It should ensure that it develops and provides on-going targeted training of all current and newemployees
- C. It should subject all new employees to criminal background checks before being hired
- D. It should ensure that the regulators have reviewed and have approved the bank's AML program
Answer: B
NEW QUESTION # 51
A commission rogatory would be used in which gateway to obtain information from another country?
- A. An MLAT request
- B. A supervisory channel request with the Basel Committee
- C. An FIU request under the Egmont principles
- D. A FATF request
Answer: A
Explanation:
A commission rogatory, also known as a letter rogatory or a letter of request, is a formal request from a court in one country to a court in another country for some type of judicial assistance, such as service of process, taking of evidence, or enforcement of judgments1. A commission rogatory would be used in the context of a mutual legal assistance treaty (MLAT) request, which is a bilateral or multilateral agreement that enables countries to cooperate and provide legal assistance to each other in criminal matters2. MLATs are one of the main gateways for obtaining information from another country, especially when the information is not available through other means, such as financial intelligence units (FIUs), supervisory authorities, or international organizations3. FIUs are national agencies that collect, analyze, and disseminate financial information related to money laundering and terrorist financing, and they can exchange information with their counterparts in other countries under the Egmont principles. Supervisory authorities are regulators that oversee the compliance of financial institutions and other entities with anti-money laundering and counter-terrorism financing (AML/CFT) obligations, and they can share information with their peers in other jurisdictions through supervisory channels, such as the Basel Committee on Banking Supervision. The Financial Action Task Force (FATF) is an inter-governmental body that sets standards and monitors the implementation of AML/CFT measures, and it can provide information and guidance to its members and other jurisdictions, but it does not have the authority to request or compel information from them.
References:
1: Letters rogatory - Wikipedia
2: Mutual Legal Assistance Treaties and Letters Rogatory: A Guide for Judges | Federal Judicial Center
3: How US Authorities Obtain Foreign Evidence in Cross-Border Investigations | Global Investigations Review
4: What is an FIU? | Egmont Group of Financial Intelligence Units
5: Basel Committee on Banking Supervision | Bank for International Settlements
6: What is the FATF? | FATF
NEW QUESTION # 52
Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is popular in the community and is a wellknown philanthropist.
To whom should the investigator escalate these concerns?
- A. The owner of the auto repair shop
- B. The bank anti-money laundering officer
- C. Audit committee
- D. Chairman of the Board
Answer: B
Explanation:
The investigator should escalate these concerns to the bank anti-money laundering officer, who is responsible for overseeing the implementation and effectiveness of the bank's AML/CFT policies and procedures, as well as ensuring compliance with relevant laws and regulations. The bank anti-money laundering officer can then decide on the appropriate course of action, such as conducting further investigation, reporting to the regulators, or terminating the relationship with the customer. The other options are not suitable for escalating these concerns, as they may not have the authority, expertise, or responsibility to handle such matters.
References:
* ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 4, pp. 113-114
* FATF Guidance: The Role of Hawala and Other Similar Service Providers in Money Laundering and Terrorist Financing, October 20131, p. 19
* Basel Committee on Banking Supervision, Sound management of risks related to money laundering and financing of terrorism, June 20172, p. 10
NEW QUESTION # 53
A government has instituted a new anti-money laundering laws which require all financial institutions to obtain certain information from its customers.
Which step should an institution located in this jurisdiction take to ensure compliance?
- A. Send a notice to customers asking them to provide the necessary information
- B. Change systems to ensure the required information is automatically obtained from all customers
- C. Change procedures to require that the necessary information is obtained
- D. Change procedures and systems as necessary and provide employee training
Answer: D
NEW QUESTION # 54
What do Financial Action Task Force (FATF)-style regional bodies do for their members to help combat money laundering and terrorist financing?
- A. They assist member countries in penalizing entities that violate FATF standards and recommendations
- B. They provide technical assistance to members in implementing FATF recommendations
- C. They work with members on areas of concern outside of anti-money laundering and terrorist financing
- D. They supervise member country financial institutions relating to anti-money laundering and terrorist financing
Answer: B
Explanation:
Financial Action Task Force (FATF)-style regional bodies (FSRBs) are organizations that associate countries from the same region or that face similar challenges to combat money laundering and terrorist financing.
FSRBs have the same objectives as the FATF, which are to set international standards and promote effective implementation of legal, regulatory and operational measures to prevent and combat money laundering and terrorist financing. One of the main functions of FSRBs is to provide technical assistance and training to their members in implementing the FATF recommendations, which are the global standards for anti-money laundering and counter-terrorist financing. FSRBs also conduct mutual evaluations of their members to assess their level of compliance with the FATF recommendations and provide follow-up reports and actions.
References:
CAMS Study Guide, 6th Edition, Chapter 2, Section 2.11
Certification Candidate Handbook, Section 3.22
FATF website, About Us, FATF-Style Regional Bodies3
NEW QUESTION # 55
On-line financial technologies are susceptible to money laundering risk because
- A. Viruses significantly damage communications and commerce.
- B. The identity of the people who conduct transactions may be unknown.
- C. The risk of identity theft is greatly increased.
- D. Baring staff are familiar with how this technology can be abused.
Answer: B
Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) resources, one of the challenges of online financial technologies is the difficulty of verifying the identity and legitimacy of the customers and counterparties. This creates opportunities for money launderers and other criminals to exploit the anonymity and speed of online transactions to move and conceal illicit funds. The other options are not directly related to the money laundering risk posed by online financial technologies.
References:
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 5: Risk- Based Approach, page 133.
ACAMS Study Guide for the Certified Anti-Money Laundering Specialist (the 6th edition), Chapter 7: Money Laundering Risks and Methods, page 203.
NEW QUESTION # 56
Which two actions should Financial Intelligence Units (FIUs) take when submitting a request to another FIU?
(Choose two.)
- A. Disclose the reason and purpose for the request
- B. Provide feedback on how the information was used
- C. Send the same request to all FIUs
- D. Make best efforts to provide complete and factual information
Answer: A,B
Explanation:
According to the Egmont Group of Financial Intelligence Units, which is a global network of FIUs that promotes information exchange and cooperation, FIUs making requests to another FIU should disclose the reason and purpose for the request, and provide feedback on how the information was used12. These actions are intended to enhance mutual trust, transparency, and accountability between FIUs, and to facilitate the effective use of financial intelligence and information for combating money laundering, terrorist financing, and other financial crimes12. FIUs making requests should also respect the confidentiality and data protection requirements of the FIU receiving the request, and avoid imposing unreasonable or unduly restrictive conditions12.
FIUs making requests should not send the same request to all FIUs, as this would be inefficient, unnecessary, and potentially harmful. FIUs should only send requests to FIUs that are relevant and competent to provide the information they need, based on the nature and scope of the case12. Sending the same request to all FIUs could overload the system, create duplication, and compromise the security and confidentiality of the information12. FIUs making requests should also make best efforts to provide complete and factual information, but this is not an action they should take when submitting a request, but rather when responding to a request from another FIU12.
References:
Egmont Group of Financial Intelligence Units Operational Guidance for FIU Activities and the Exchange of Information Principles for Information Exchange Between Financial Intelligence Units
NEW QUESTION # 57
A government has instituted new anti-money laundering laws which require all financial institutions to obtain certain information from its customers.
Which step should an institution located in this jurisdiction take to ensure compliance?
- A. Change systems to ensure the required information is automatically obtained from all customers
- B. Change procedures to require that the necessary information is obtained
- C. Send a notice to customers asking them to provide the necessary information
- D. Change procedures and systems as necessary and provide employee training
Answer: C
NEW QUESTION # 58
According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?
- A. The compliance function and internal audit function should be combined.
- B. The auditors should not discuss internal audit findings with compliance management to maintain independence.
- C. An internal audit program of adequacy of the bank's compliance function should be es-tablished, but should not include review of transactions.
- D. The internal audit methodology should include an assessment of compliance risk.
Answer: D
Explanation:
According to the Basel Committee on Banking Supervision guidelines, the internal audit function should evaluate the adequacy and effectiveness of the bank's compliance function and its compliance risk management framework1. This includes assessing the compliance risk inherent in the bank's activities, products, services, and systems, as well as the compliance policies, procedures, controls, and reporting mechanisms2. The internal audit function should also review the transactions and records of the bank to ensure compliance with applicable laws, regulations, and internal standards3.
The other statements are incorrect because:
* B. An internal audit program of adequacy of the bank's compliance function should be established, but should not include review of transactions. This statement is false because the internal audit function should review the transactions and records of the bank to ensure compliance, as mentioned above3.
* C. The compliance function and internal audit function should be combined. This statement is false because the compliance function and the internal audit function should be separate and independent from each other, to avoid conflicts of interest and ensure objectivity and credibility.
* D. The auditors should not discuss internal audit findings with compliance management to maintain
* independence. This statement is false because the internal audit function should communicate and coordinate with the compliance function on a regular basis, to share information, insights, and recommendations, and to avoid duplication of work. However, the internal audit function should maintain its independence and report directly to the board of directors or the audit committee.
References:
* 1: The internal audit function in banks, Principle 10, p. 9
* 2: The internal audit function in banks, Principle 10, p. 10
* 3: The internal audit function in banks, Principle 10, p. 11
* : The internal audit function in banks, Principle 2, p. 4
* : The internal audit function in banks, Principle 10, p. 11
NEW QUESTION # 59
At a small community bank, the compliance officer identifies unusual activity on a customer, who with his personal and company accounts, is the bank's largest depositor. The customer's companies have significant balances on their outstanding loans. The compliance officer notices that there is a lot of unusual movements of money between the customer's individual and business accounts. After filing a suspicious transaction report (STR), the compliance officer gets a call from law enforcement indicating that they want the bank to keep the account open while they conduct an investigation into the customer.
How should the compliance officer escalate this information to the board of directors?
- A. By providing a copy of the STR to the board
- B. By providing a copy of the letter from law enforcement asking the bank to keep the account open.
- C. By providing a high level summary of the activity and the interactions with law enforcement
- D. By informing the regulator to bring it up with their next meeting with the board
Answer: C
Explanation:
The compliance officer should provide a high level summary of the activity and the interactions with law enforcement to the board of directors, as this would be the most appropriate way to escalate the information without compromising the confidentiality of the STR or the ongoing investigation. Providing a copy of the STR or the letter from law enforcement could expose the bank to legal risks or jeopardize the investigation.
Informing the regulator to bring it up with the board would not be sufficient, as the compliance officer has the responsibility to report directly to the board on significant compliance issues.
References:
ACAMS CAMS Certification Video Training Course, Module 5: Risk Management, Lesson 5.3:
Reporting to Senior Management and the Board1
ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 5: Risk Management, Section 5.3:
Reporting to Senior Management and the Board2
NEW QUESTION # 60
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. The final report must be presented directly to the board of directors
- B. Independent reviews must be performed annually
- C. The review must be performed by a group outside of the bank
- D. There is a conflict of interest with the management of the review process
Answer: A
Explanation:
The method of purchasing chips with cash and redeeming them for a check is used to launder money in casinos. This is because the check can be deposited into a bank account or cashed at another location, creating a paper trail that appears to be legitimate. The check can also be used to conceal the source and amount of the cash, as well as the identity of the person who obtained it. This method is also known as "chip washing" or
"chip dumping" and is one of the common ways that money launderers exploit casinos12.
References:
1: CAMS Certification Package - 6th Edition | ACAMS, Chapter 2: Money Laundering Risks and Methods, p. 32-33 2:
FATF Report: Money Laundering through the Physical Transportation of Cash, October 2015, p. 28-29,
http://www.fatf-gafi.org/media/fatf/documents/reports/money-laundering-through-transportation-cash.pdf
NEW QUESTION # 61
How does the Asian/Pacific Financial Action Task Force <FATF>-Style Regional Body help its members implement recommendations from the FATF? (Select Two.)
- A. Endorses regulations that define money laundering based on the model laws issued by the respective member states
- B. Encourages cooperative AML efforts in the region
- C. Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions
- D. Promotes laws that allow judicial challenges to seizure orders by an administrative body
- E. Requires members to maintain lists of regional money laundering and terrorists financing issues relevant to their region
Answer: B,C
Explanation:
Explanation
The Asian/Pacific Financial Action Task Force-Style Regional Body (APG) helps its members implement recommendations from the FATF by facilitating the adoption and implementation of internationally accepted AML measures by member jurisdictions (CAMS Manual, 6th Edition, Page 22). The APG also encourages cooperative AML efforts in the region, which can include information-sharing and mutual evaluations to assess member compliance with FATF recommendations (CAMS Manual, 6th Edition, Page 25). Therefore, options C and D are the correct answers.
NEW QUESTION # 62
Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)
- A. Identify jurisdictions with weak AML/CFT regimes
- B. Address AML/CFT technical assistance of individual members
- C. Protect the reputation and standing of FATF
- D. Issue country-specific Mutual Evaluation reports
- E. Establish AML/CFT standards and typologies
Answer: D,E
Explanation:
Reference:
https://www.fatf-gafi.org/media/fatf/documents/High-Level%20Principles%20and%20Objectives%20for%20FA
NEW QUESTION # 63
After evaluating recent changes to international standards, an anti-money laundering specialist should consider enhanced due diligence on accounts held by
1. lawyers.
2. foreign exchange dealers.
3. retail account holders.
4. precious metal dealers.
- A. 1, 2, and 3 only
- B. 1, 3, and 4 only
- C. 1, 2, and 4 only
- D. 2, 3, and 4 only
Answer: C
NEW QUESTION # 64
You are designing an AI application that will use an azure Machine Learning Studio experiment.
The source data contains more than 200 TB of relational tables. The experiment will run once a month.
You need to identify a data storage solution for the application. The solution must minimize compute costs.
Which data storage solution should you identify?
- A. Azure SQL Data Warehouse
- B. Azure SQL Database
- C. Azure Database for MySQL
Answer: B
Explanation:
Explanation/Reference:
References:
https://azure.microsoft.com/en-us/pricing/details/sql-database/single/
NEW QUESTION # 65
According to the 5th EU Money Laundering Directive, member states require entities to apply enhanced customer due diligence measures with respect to business relationships or transactions involving high-risk third country nationals. Which are included in these requirements? (Choose three.)
- A. Obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner(s)
- B. Obtaining information on the reasons for intended or performed transactions
- C. Obtaining tax reference details for the client
- D. Obtaining copies of passports for all authorized persons
- E. Establishing and verifying the address of the client
- F. Obtaining the approval of senior management for establishing or continuing the business relationship
Answer: A,B,C
NEW QUESTION # 66
The Board of Directors and the senior management of a financial institution should ensure that which three are established and followed with regard to an effective AML program?
- A. There is a strong compliance program
- B. International guidance is followed and understood
- C. They are kept informed of all major AML issues
- D. Regulatory compliance is made part of all relevant job descriptions
Answer: A,C,D
NEW QUESTION # 67
After evaluating recent changes to international standards, an anti-money laundering specialist should consider enhanced due diligence on accounts held by
1. lawyers.
2. foreign exchange dealers.
3. retail account holders.
4. precious metal dealers.
- A. 1, 2, and 3 only
- B. 1, 3, and 4 only
- C. 1, 2, and 4 only
- D. 2, 3, and 4 only
Answer: C
Explanation:
Enhanced due diligence (EDD) is a higher level of customer due diligence that is required for customers or accounts that pose a higher risk of money laundering or terrorist financing. According to the FATF Recommendations, EDD measures may include obtaining additional information on the customer, the beneficial owner, the intended nature and purpose of the business relationship, the source and destination of funds, and the reasons for transactions. EDD is also required for customers or accounts that are from or in countries that do not have adequate AML/CFT systems or are subject to sanctions or embargoes.
Among the four categories of customers or accounts listed in the question, lawyers, foreign exchange dealers, and precious metal dealers are considered as high-risk by the FATF and other international standards, and therefore require EDD. Lawyers may be involved in transactions that conceal the origin or ownership of illicit funds, such as creating shell companies, trusts, or foundations. Foreign exchange dealers may facilitate the movement of illicit funds across borders or jurisdictions, or provide anonymous or pseudonymous services.
Precious metal dealers may deal with high-value goods that are easily convertible into cash, or may be used to launder proceeds of crime or evade sanctions.
Retail account holders, on the other hand, are generally considered as low-risk customers or accounts, unless they exhibit unusual or suspicious behavior or transactions. Therefore, they do not require EDD by default, but only when there are specific indicators of higher risk.
References:
[ACAMS Study Guide for the CAMS Certification Examination, 6th Edition], Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp.
75-76, 79-80.
FATF Guidance on Correspondent Banking Services, October 2016, pp. 7-8, 12-13.
Customer Due Diligence - Overview, Federal Financial Institutions Examination Council, April 2018, pp. 1-2, 5-6.
Customer due diligence, The Law Society, accessed on February 9, 2024.
Anti-Money Laundering (AML) Source Tool for Broker-Dealers, U.S. Securities and Exchange Commission, May 16, 2022, pp. 1-2, 5-6.
NEW QUESTION # 68
......
The CAMS exam covers a wide range of topics related to AML, including money laundering trends and methods, risk assessment, customer due diligence, suspicious activity reporting, and sanctions compliance. CAMS exam is designed to measure a candidate's knowledge and understanding of these topics, as well as their ability to apply this knowledge in real-world situations.
The CAMS certification is increasingly becoming a requirement for professionals who work in the financial services industry, including bankers, compliance officers, auditors, and regulators. Certified Anti-Money Laundering Specialists certification program is designed to help these professionals stay up-to-date with the latest AML regulations and best practices. It also provides a way for individuals to demonstrate their expertise and commitment to AML compliance to employers and clients.
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