ACAMS Certified Anti-Money Laundering Specialist v6 Exam Practice Test

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Question 1

A bank is preparing for a regulatory exam after a previous regulatory exam identified weaknesses in its AML program. Since the last exam, the bank has:

Improved its written AML program

Hired an experienced AML compliance officer

Demonstrated a stronger culture of compliance

Focused on clearing its transaction monitoring case backlog and enhancing its sanctions screening program

Which of the following are correct? (Select Two.)

AThe bank is likely to face secondary sanctions from global financial institutions despite addressing many of the previous concerns.

BThe bank is protected from reputational risk arising from any regulatory action because regulatory orders must remain confidential.

CThe bank may face the risk of regulatory orders to remediate its AML program despite addressing many of the previous concerns.

DThe bank may face civil or criminal penalties if it is unable to demonstrate sustained improvement in addressing the previous concerns.

EThe regulatory agency may require the bank's board of directors to publicly share the actions taken to address the previous concerns in order to limit its reputational risk.

Answer : C, D

Regulatory exams assess whether financial institutions comply with AML/CFT laws and have adequately addressed previous deficiencies.

Option C (Correct): Regulators may still issue remediation orders if the bank's improvements do not fully resolve prior AML compliance gaps.

Option D (Correct): If deficiencies persist, regulators may impose civil or criminal penalties.

Why Other Options Are Incorrect:

Option A (Incorrect): Secondary sanctions typically apply to institutions violating international sanctions laws, not AML program deficiencies.

Option B (Incorrect): Regulatory orders are not always confidential---major enforcement actions may be publicly disclosed.

Option E (Incorrect): Boards are responsible for AML oversight but are not always required to disclose corrective actions publicly.

Best Practices for Addressing AML Exam Findings:

Document all remediation efforts with clear implementation timelines.

Demonstrate a culture of compliance through leadership and training.

Ensure sustained improvements, not just short-term fixes.

FATF Recommendation 18 (AML Compliance & Internal Controls)

Basel Committee's Guidelines on Regulatory Compliance in AML

OCC and FinCEN Enforcement Actions on AML Deficiencies

Question 2

An AML compliance officer receives an independent audit report with a number of findings.

An appropriate response to the report would include:

AReperforming the testing for the controls mentioned in the findings to confirm the results of the audit.

BAssigning responsibility for reviewing the action plan to the board of directors.

CDrafting detailed action plans for the audit team to execute to close the findings.

DDefining remedial actions based on the findings' root cause analysis.

Answer : D

AML audit findings must be analyzed and addressed through remedial actions based on root cause analysis.

Option D (Correct): Root cause analysis helps develop effective corrective measures to prevent recurring AML deficiencies.

Option A (Incorrect): Retesting controls may be useful, but addressing deficiencies is more critical.

Option B (Incorrect): While the board oversees compliance, the responsibility for implementing fixes lies with AML teams.

Option C (Incorrect): Audit teams provide findings but do not execute corrective actions.

Best Practices for Addressing AML Audit Findings:

Identify the root cause of AML control failures.

Develop risk-based remediation plans.

Implement and monitor corrective actions.

FATF Recommendation 18 (AML Internal Controls & Audit)

Basel Committee's Guidelines on AML Audits

Wolfsberg Group Principles for AML Risk Management

Final Thoughts:

Suspicious stock price movements can indicate market manipulation linked to money laundering.

EU AML and GDPR regulations enforce strict data minimization and AI compliance requirements.

Bearer shares, nominee directors, and tax-haven corporations increase money laundering risks.

AML audit findings should be addressed through root cause analysis and corrective actions.

Question 3

Which of the following corporate structures present a higher money laundering risk due to reduced transparency? (Select Three.)

AA company with nominee shareholders and directors in a local jurisdiction.

BA private company that has no activity in a tax haven jurisdiction.

CA company with bearer shares incorporated in a tax haven jurisdiction.

DA limited liability company incorporated in a foreign jurisdiction.

EA private investment company incorporated in a tax haven jurisdiction with strict secrecy laws.

Answer : A, C, E

Certain corporate structures obscure beneficial ownership, making them attractive for money laundering.

Option A (Correct): Nominee shareholders and directors conceal the true owners of a company, increasing AML risk.

Option C (Correct): Bearer shares allow ownership to be transferred anonymously, making it difficult to trace transactions.

Option E (Correct): Private investment companies in tax havens with strict secrecy laws enable illicit fund movements.

Why Other Options Are Incorrect:

Option B (Incorrect): A private company that does not operate in a tax haven presents lower ML risk.

Option D (Incorrect): A foreign LLC is not necessarily high-risk unless linked to a secrecy jurisdiction.

Best Practices for Identifying High-Risk Corporate Structures:

Require full disclosure of beneficial ownership.

Apply enhanced due diligence (EDD) on tax-haven entities.

Monitor for unusual cross-border transactions.

FATF Recommendation 24 (Beneficial Ownership Transparency)

6th EU AML Directive (6AMLD) on Corporate Transparency

OECD Guidance on Tax Haven Risks & Shell Companies

Question 4

Privacy and data protection restrictions placed upon financial institutions (FIs) in the EU require that FIs must: (Select Two.)

AEngage third parties to supplement any missing customer identification information.

BApply data minimization to avoid overreach in data collection.

CInform a customer of any information the FI has obtained as a result of an investigation into unusual activity.

DFollow strict guidelines when using machine learning and artificial intelligence.

Answer : B, D

Financial institutions operating in the EU must comply with GDPR and AML directives, ensuring a balance between privacy and AML compliance.

Option B (Correct): Data minimization is a key GDPR principle, ensuring that only necessary data is collected and processed.

Option D (Correct): Strict guidelines apply to AI and machine learning models used in AML compliance to prevent bias and ensure transparency.

Why Other Options Are Incorrect:

Option A (Incorrect): FIs cannot use third parties to supplement missing customer identification unless proper KYC measures are followed.

Option C (Incorrect): Customers cannot be informed about ongoing AML investigations due to ''tipping off'' restrictions under AML laws.

Best Practices for AML Compliance Under GDPR:

Limit data collection to what is necessary for AML compliance.

Ensure AI and machine learning models comply with transparency regulations.

Prevent unauthorized data access through strict internal controls.

EU GDPR Article 5 (Principles for Data Processing)

6th EU AML Directive (6AMLD) on Data Protection in AML

Wolfsberg Group Guidance on AI in AML Compliance

Question 5

Which red flag is most relevant to money laundering through capital markets?

AA low-priced security sees a sudden spike in investor demand with a rising price.

BA security sees a transactional pattern of a steady decrease in both trading volume and prices.

CA firm sees an unexpected increase in demand for electronically traded funds.

DA trading customer maintains a portfolio of securities concentrated in one specific emerging market.

Answer : A

Money laundering through capital markets often involves pump-and-dump schemes, wash trading, and layering funds through rapid trading activity.

Option A (Correct): A sudden spike in demand for a low-priced security is a red flag for pump-and-dump schemes, where criminals manipulate the market to inflate stock prices artificially before selling off shares for a profit.

Option B (Incorrect): A gradual decline in trading volume and price does not indicate suspicious activity related to money laundering.

Option C (Incorrect): An increase in demand for ETFs is common and not necessarily linked to money laundering.

Option D (Incorrect): Holding securities in one specific emerging market may indicate a geographic investment strategy, not necessarily money laundering.

Common Money Laundering Typologies in Capital Markets:

Pump-and-Dump Schemes -- Fraudulently inflating stock prices to cash out illicit funds.

Wash Trading -- Conducting self-trades to create an illusion of high market activity.

Layering Funds Through Rapid Trading -- Engaging in frequent buy-and-sell orders to obfuscate the origin of funds.

Best Practices for AML in Capital Markets:

Monitor unusual trading volume and price fluctuations.

Use AI-driven surveillance systems to detect manipulative behavior.

Investigate transactions involving offshore brokers or shell entities.

FATF Report on Money Laundering in Capital Markets

SEC and FINRA Guidance on Market Manipulation Risks

Wolfsberg Group Principles for Capital Markets AML Compliance

Question 6

Which key metric would provide the most valuable data to senior management about the effectiveness of its AML controls?

AThe number of money laundering alerts generated by the watchlist screening system.

BThe number of clients exited for commercial reasons.

CThe number of high-risk customers onboarded each month.

DThe ratio of true positives to false positives generated by the automated monitoring system.

Answer : D

An effective AML program balances alert accuracy and operational efficiency.

Option D (Correct): The true positive vs. false positive ratio reflects the efficiency and accuracy of an AML transaction monitoring system.

Option A (Incorrect): The number of alerts does not indicate system effectiveness---many could be false positives.

Option B (Incorrect): Clients exiting for commercial reasons are unrelated to AML efficiency.

Option C (Incorrect): Tracking high-risk customer onboarding is important but does not measure AML effectiveness.

Best Practices for Measuring AML Effectiveness:

Monitor system efficiency through alert validation metrics.

Reduce false positives while maintaining regulatory compliance.

Enhance machine learning and AI models for transaction monitoring.

FATF Guidance on AML Effectiveness Metrics

Basel Committee's Guidelines on AML Performance Measurement

Wolfsberg Group Best Practices for AML System Optimization

Question 7

Which of the below statements are supported by the Financial Action Task Force (FATF) 40 Recommendations adopted in 2012? (Select Two.)

ARegulators should direct Financial Institutions to establish appropriate frameworks to avoid banking higher-risk customers.

BNations should work towards implementing targeted financial sanctions in alignment with the UN Security Council.

CNations should establish frameworks that take a risk-based approach to prevent and mitigate money laundering and terrorist financing.

DGovernments must work toward developing identical administrative and operational frameworks for investigating and prosecuting crime.

ENations should take measures to ensure there is transparency to the beneficial ownership of legal persons.

Answer : B, C, E

The FATF 40 Recommendations outline global AML/CFT standards, including risk-based compliance and beneficial ownership transparency.

Option B (Correct): FATF requires nations to implement financial sanctions in coordination with the UN Security Council.

Option C (Correct): FATF emphasizes a risk-based approach (RBA) to prevent ML/TF.

Option E (Correct): FATF mandates transparency in beneficial ownership to prevent shell company misuse.

Why Other Options Are Incorrect:

Option A (Incorrect): FATF does not require institutions to avoid high-risk customers but to apply appropriate risk-based controls.

Option D (Incorrect): Governments do not need identical crime investigation frameworks but should ensure effective cooperation.

Best Practices for FATF Compliance:

Apply risk-based due diligence on high-risk customers.

Enhance beneficial ownership transparency measures.

Implement targeted financial sanctions in coordination with global authorities.

FATF Recommendation 1 (Risk-Based Approach to AML)

FATF Recommendation 10 (Beneficial Ownership Transparency)

FATF Recommendation 6 (Sanctions & UN Coordination)