Acams CAMS-FCI Exam Practice Test Instant Access

Question 1

Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?

AReviewing wire transfer screening processes to ensure that potential name hits are investigated promptly

BLooking at copies of suspicious activity reports filed with regulators to ensure completeness

CEnsuring that all clients with foreign identification are subject to enhanced due diligence

DExamining Human Resources processes for conducting criminal background checks on executives

Answer : C

The OFAC sanctions screening audit program should include the requirement that all clients with foreign identification are subject to enhanced due diligence, as this provides an extra layer of protection against potential violations of OFAC sanctions.

Question 2

Which is a key characteristic of the Financial Action Task Force (FATF) Regional Style Bodies for combatting money laundering/terrorist financing?

AInstructing each member country to place FATF recommendations into law

BImplementing regional mutual evaluation procedures

CEmphasizing regional co-operation between member countries

DEnabling FATF standards to be specific to each region

Answer : B

According to the CAMS study guide, the Financial Action Task Force (FATF) Regional Style Bodies are organizations created by the FATF to promote the implementation of anti-money laundering and countering the financing of terrorism (AML/CFT) measures in specific regions. One of the key characteristics of these bodies is the implementation of regional mutual evaluation procedures.

Regional mutual evaluations involve member countries evaluating each other's AML/CFT regimes to identify strengths and weaknesses and to develop best practices for improvement. This process allows for greater cooperation between countries and can help to identify and address regional AML/CFT risks more effectively. It also promotes consistency in AML/CFT standards and practices within the region.

Question 3

The training department is conducting awareness training for unusual customer identification scenarios. Which two indicators should be included? (Select Two.)

AThe customer opens the account in the name of a family member who begins making large deposits.

BThe customer's name and home address cannot be verified

CThe customer's internet protocol address does not match the identifying information provided during online registration.

DThe customer requests payment of proceeds to an unrelated third party.

EThe customer frequently exchanges small bills for large bills.

Answer : A, B

This information can be found in the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, under the section on Unusual Customer Identification Scenarios. The guide explains that two indicators that should be included in awareness training for unusual customer identification scenarios are:

A . The customer opens the account in the name of a family member who begins making large deposits.

This is an indicator of potential structuring, where a customer may be attempting to avoid triggering reporting thresholds by depositing funds in smaller amounts over time. It is important for staff to be aware of this scenario and to monitor accounts for potential suspicious activity.

B . The customer's name and home address cannot be verified.

This is an indicator of potential identity theft or other fraudulent activity. If a customer's identifying information cannot be verified, it is important for staff to conduct additional due diligence to ensure that the customer is legitimate and that the account is not being used for illicit purposes.

Question 4

A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?

AIf the activity is materially different from related businesses

BIf the account has multiple transfers to the same, related businesses

CIf there is negative media associated with counterparties

DIf the account is mostly dormant or has little activity

Answer : C

According to the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, page 105, the correct answer is C. It can be difficult to determine if there is negative media associated with counterparties solely from the customer's account activity and KYC file.

The study guide explains that negative media can include news articles, government sanctions lists, and other sources of public information that may indicate that a counterparty is involved in illicit activities. However, this information may not be readily available in a customer's account activity or KYC file, and may require additional research or investigation.

Question 5

How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

AMutual evaluation

BFATF Evaluation Committee

CBasel Committee

DSeries of internal audits followed by reporting to FATF

Answer : A

'The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a mutual evaluation process. During a mutual evaluation, the FATF assesses a country's legal and institutional framework, its implementation of measures to combat money laundering and terrorist financing, and the effectiveness of its efforts. The FATF then issues a report with recommendations for improvement' [CAMS Study Guide 6th edition, page 15-16].

Question 6

According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)

AThe responsibility and authority in the structure

BThe management structure of the trust

CThe source of funds in the structure

DThe general purpose behind the structure

EThe general nature of business of the trust

Answer : A, D

Here is the exact information from the Financial Action Task Force (FATF) Guidance for a Risk-Based Approach for Trust and Company Service Providers:

'Understanding the management and ownership structure of a trust is crucial in assessing the ML/TF risk it poses. This includes the identity of all settlors, trustees and beneficiaries, and their respective roles and responsibilities, as well as the nature and purpose of the trust.'

'TCSPs should obtain and maintain up-to-date information on the purpose and intended nature of the business relationship, the source of funds and wealth, and where relevant, the source of funds or wealth of the settlor and beneficiaries.'

Based on this information, the correct answers are A and D. Trust and Company Service Providers must understand the responsibility and authority in the structure, as well as the general purpose behind the structure in order to assess the overall risk of the trust and ensure that any transactions with the trust are legitimate.

Question 7

Which payment method for purchasing luxury items is a red flag for potential money laundering?

APersonal loan

BCash

CWire transfer

DCredit card

Answer : B

According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1].

Acams Advanced CAMS-Financial Crimes Investigations Exam Practice Test