CAMS Online Practice Questions and Answers

According to experts, what is the most effective way to prevent money laundering through financial institutions?

A. Ensuring that transaction monitoring systems can identify terrorist financing

B. Collecting information on beneficial owners and foreign customers

C. Instituting a policy prohibiting the acceptance of funds intended for terrorist financing

D. Implementing a sound customer due diligence program

What are the European Union Directives on Money Laundering?

A. They arevoluntary codes of best practice for the financial sector

B. They are written by the Wolfsberg Group

C. They require members to implement certain laws of prevent money laundering

D. They require financial institutions to report suspicious activity to theEgmont Group in Brussels

Which three are the most commonly used risk criteria?

A. Country Risk

B. Customer Risk

C. Reputation Risk

D. Product and Service Risk

Which method to launder money through deposit-taking institutions is closely associated with international trade?

A. Forming a shell company

B. Using Black Market Peso Exchange

C. Structuring cash deposits withdrawals

D. Investing in legitimate business with illicit funds

What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)

A. Incorporate suspicious activity monitoring into periodic reviews

B. Incorporate due diligence results such as customer risk ratings

C. Utilize downstream correspondents to investigate and report suspicious activity

D. Investigate and report suspicious activity only for the correspondent bank's clients

What must be materially true regarding transactions for United States (U.S.) sanctions laws to have jurisdiction?

A. Transactions are traced to illegal proceeds

B. Transactions are processed by a U.S. person

C. Transactions are stripped of beneficial owner information

D. Transactions are identified as proceeds of foreign corruption

Which method is used to launder money via wire remittances sent through a bureau de change or money services business?

A. A customer in country A makes a weekly small wire transfer to the bank account of an individual in country B.

B. A customer in country A makes frequent wire transfers to a single customer in country B that are slightly under the legal reporting threshold.

C. A large number of wire transfers are sent from a large number of senders in country A to a large number of recipients in country B during the period of December 1 to December 15.

D. A customer in country A receives four small wire transfers from four different individuals located in country B on December 21. The aggregate of the wire transfers falls below the legal reporting threshold.

An auction house dealing in fine art and antiques sells a well-known painting at a price of $12 million to an agent bidding for a group of local investors. The same painting sold ten years prior at auction for $5 million. The auction house receives payment for the painting via wire transfer from an account maintained in an offshore jurisdiction by the investt.

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

A. The payment is received via wire transfer.

B. An agent bids on the painting for a group of investors.

C. The painting has more than doubled its value in ten years.

D. Payment is received from an account in an offshore jurisdiction.

E. Lack of beneficial ownership details for the originating account.

When investigating an AML event, which techniques would be used to investigate suspected mule accounts? (Choose three.)

A. Reconcile the stated purpose of the account with actual transaction history and compare with peer groups.

B. Determine if the suspected accounts are being accessed by a common person, telephone number, or device.

C. Contact the appropriate law enforcement agency and report the account activity.

D. Review the account history and determine if there are previous payments to charity accounts.

E. Establish the frequency in which the funds are moved in and out of the accounts.

F. Submit a SAR/STR to the national Financial Intelligence Unit (FIU).

A foreign bank's compliance officer receives a request for information from a US bank, alerting the foreign bank to the possibility that it may have transferred funds on behalf of an Office of Foreign Assets Control (OFAC>-sanctioned person, who holds an account with the foreign bank. Which statements are true with respect to said funds and the information in relation to the transaction under scrutiny? (Select Two.)

A. If the funds are seized, then the foreign bank would be within its rights to dispute such seizure.

B. US authorities have no power (in terms of the USA PATRIOT Act) to sanction the foreign bank for transferring funds on behalf of an OFAC-sanctioned entity.

C. The USA PATRIOT Act authorizes the Secretary of the Treasury or the Attorney General to subpoena records from the foreign bank that maintains a correspondent account with a US bank,

D. If a US citizen were part of the foreign bank's Board deliberations where a decision was made to onboard the OFAC-sanctioned entity as a client, then they can be confronted with criminal charges.

E. US authorities are only permitted to seize the funds transferred by the foreign bank under OFAC sanctions if there is an equivalent sanctions regime of the UN which has been contravened.