Free ACAMS CAMS Practice Exams - Page 5 of 39

Question #41

What is the purpose of a Risk Appetite Statement (RAS) and its linkages while implementing organizational controls? (Select Two.)

A . An RAS formalizes a risk appetite statement from management and informs the Board of Directors on the risk assessment performed.
B . An RAS establishes a desired level of risk exposure in qualitative terms, covering all areas of compliance.
C . An RAS sets limits for risk-taking by means of quantitative and qualitative metrics so that the business does not take up risk in excess of the organization’s risk tolerance.
D . An RAS establishes a management-approved policy that identifies the organization’s risk tolerances with strategic objectives, risk profile, and risk management capabilities.
E . An RAS sets limits in terms of residual risk and thus is strongly intertwined with the efficacy of the system of internal controls.

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Question #42

does not have to comply with transaction reporting.

A . 1, 2, and 3 only
B . 1, 2, and 4 only
C . 1, 3, and 4 only
D . 2, 3, and 4 only

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Correct Answer: A
A

Explanation:

A money remittance business will most likely attract money launderers because it deals primarily in cash transactions, engages in international transactions, and conducts transactions for walk-in customers. These factors make money remittance businesses vulnerable to money laundering risks, such as:

Cash transactions: Cash is the preferred medium of exchange for money launderers, as it is anonymous, untraceable, and easily convertible. Money remittance businesses often deal with large amounts of cash, which can be used to place, layer, or integrate illicit funds into the financial system. Cash transactions also pose challenges for customer identification, record keeping, and transaction monitoring.

International transactions: Money remittance businesses facilitate cross-border transfers of funds, which can be used to move illicit funds from one jurisdiction to another, or to obscure the origin, destination, or purpose of the funds. International transactions also involve exposure to different legal, regulatory, and cultural environments, which may create inconsistencies or gaps in anti-money laundering (AML) and counter-terrorism financing (CTF) standards and practices.

Walk-in customers: Money remittance businesses often serve walk-in customers, who may not have an established relationship with the business, or who may use false or incomplete identification documents. Walk-in customers also increase the volume and complexity of transactions, which may make it difficult to detect suspicious or unusual activity, or to apply risk-based due diligence measures.

Reference: ACAMS CAMS Certification Video Training Course1, Module 2: Money Laundering Risks and Methods, Lesson 2.3: Money Laundering Risks and Methods by Sector

ACAMS CAMS Study Guide, 6th Edition2, Chapter 2: Money Laundering Risks and Methods, Section 2.3: Money Laundering Risks and Methods by Sector, pp. 37-38

ACAMS CAMS Examination Preparation Seminar, 6th Edition3, Chapter 2: Money Laundering Risks and Methods, Section 2.3: Money Laundering Risks and Methods by Sector, Slide 16

Question #43

Which action should a financial institution take when it receives a grand-jury subpoena regarding a customer?

A . Make copies of the customer’s documents and submit the originals to the enforcement agency.
B . Notify the customer being investigated before submitting documents.
C . Keep the customer’s accounts open at the enforcement agency’s verbal request.
D . Have the institution’s assigned legal counsel review the subpoena.

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Question #44

The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.

Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

A . The name and address of all shell banks the bank maintains accounts for
B . The name and address of all beneficial owners who own 25% or more of the bank
C . Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account
D . The name and address of a U.S. person who is authorized to receive service of legal process for the bank

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Question #45

Which should a financial institution implement in order to identify and investigate money laundering activity from their clients? (Select Two.)

A . Adverse news screening
B . Integrity policy
C . Whistleblower hotline
D . Code of conduct
E . Transaction monitoring

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Correct Answer: AE
AE

Explanation:

According to the ACAMS CAMS Study Guide, 6th Edition, Chapter 3, Section 3.2, the financial institution should implement the following measures in order to identify and investigate money laundering activity from their clients:

Adverse news screening: This is a process of checking the clients’ names and related parties against various sources of negative or adverse information, such as media reports, sanctions lists, watch lists, law enforcement databases, etc. Adverse news screening can help the financial institution to detect any potential red flags or indicators of money laundering or other criminal activities involving their clients, and to take appropriate actions, such as conducting enhanced due diligence, filing suspicious activity reports, or terminating the relationship.

Transaction monitoring: This is a process of reviewing and analyzing the clients’ transactions and activities, such as deposits, withdrawals, transfers, payments, etc., to identify any unusual or suspicious patterns or behaviors that deviate from their normal or expected profile. Transaction monitoring can help the financial institution to detect any possible signs of money laundering or other financial crimes, such as structuring, layering, integration, fraud, tax evasion, etc., and to investigate and report them accordingly.

The other options are not measures that the financial institution should implement in order to identify and investigate money laundering activity from their clients, although they may be part of the overall AML program or compliance culture:

Integrity policy: This is a document that outlines the ethical principles and values that guide the conduct and behavior of the financial institution and its employees. An integrity policy can help the financial institution to promote a culture of honesty, transparency, and accountability, and to prevent or deter any misconduct or corruption. However, an integrity policy alone is not sufficient or specific enough to identify and investigate money laundering activity from their clients.

Whistleblower hotline: This is a mechanism that allows the employees or other stakeholders of the financial institution to report any suspected or observed violations of the AML policies, procedures, or regulations, or any other wrongdoing or malpractice, without fear of retaliation or reprisal. A whistleblower hotline can help the financial institution to encourage and facilitate the reporting of any potential or actual money laundering activity from their clients or within the organization, and to protect the rights and interests of the whistleblowers. However, a whistleblower hotline is not a measure that the financial institution implements to identify and investigate money laundering activity from their clients, but rather a tool that supports the AML program and compliance function. Code of conduct: This is a document that defines the standards and expectations of the financial institution and its employees regarding their professional and ethical behavior, responsibilities, and obligations. A code of conduct can help the financial institution to establish and maintain a culture of compliance and integrity, and to prevent or address any conflicts of interest, misconduct, or abuse of power. However, a code of conduct is not a measure that the financial institution implements to identify and investigate money laundering activity from their clients, but rather a framework that governs the AML program and compliance function.

Reference: ACAMS CAMS Study Guide, 6th Edition, Chapter 3, Section 3.2 ACAMS CAMS Certification Video Training Course – Exam-Labs

Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)

Question #46

Which product type is subject to US extra jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act?

A . Correspondent banking
B . Commercial lending
C . Trade finance
D . Private banking

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Question #47

A bank teller receives a written request from a police officer to review a previous customer’s account on a pre-populated form with the officer’s official letterhead. The officer suspects the previous customer is engaging in smurfing.

Which action should the bank teller perform?

A . Provide the police officer the customer’s account information after management approval.
B . Escalate the police officer’s request for the customer’s account information to the compliance officer.
C . Reject the police officer’s request for the customer’s account information and escalate to the compliance officer.
D . Provide the police officer the customer’s account information.

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Question #48

A benefit of using bearer shares in corporate formations is that bearer shares are:

A . widely accepted in the financial world.
B . entered in the register of owners.
C . associated with lower costs in setting up a company.
D . easily transferred so the holder claims ownership.

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Question #48

A benefit of using bearer shares in corporate formations is that bearer shares are:

A . widely accepted in the financial world.
B . entered in the register of owners.
C . associated with lower costs in setting up a company.
D . easily transferred so the holder claims ownership.

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Question #50

The Egmont Group is a world wide organization of

A . banking regulators.
B . financial intelligence units.
C . law enforcement authorities.
D . central banks.

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