How to pass ACAMS CAMS exam with the help of dumps?

Question # 1

A close relative of a privately-owned bank's senior manager requests to open an account. Because of this relationship, the staff expedites the opening of the account without following established accountopening procedures. Applying the Basel Committee on Banking Supervision principles, which of the following poses the highest operational risk? 

A. Failure to conduct proper due diligence.
B. The possibility of lawsuits that adversely affect the operations of a bank.
C. The bank's exposure to politically exposed persons.
D. Not having appropriate information to share with Financial Intelligence Units.

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Question # 2

A division anti-money laundering officer for a financial institution has been conducting a monthly selfassessment. The officer reviews the accounts opened for compliance with a long standing Know Your Customer policy. The self-assessment for the latest month shows a significant increase in compliance deficiencies for the first time in more than a year.Which of the following is the next course of action for the anti-money laundering officer to take?  

A. Inform the Board promptly of the Know Your Customer policy trend over the last 6 months.
B. Determine if there is a readily identifiable cause for the deficiencies.
C. Implement a revision to the account-opening training program.
D. Revise the policy to simplify Know Your Customer compliance before the report is issued.

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Question # 3

According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businessesand Professions include

A. commodities traders.
B. money services businesses.
C. hawala operators.
D. real estate agents. 

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Question # 4

A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.The competent authority has advised the anti-money laundering specialist to avoid tipping off theemployee until the investigation is finalized.What action should the specialist take next?  

A. Recommend the immediate termination of the employee.
B. Advise that the dealer's accounts should be closed.
C. Consult with senior management and the legal advisor.
D. Inform the institution's regulatory agency of the situation.

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Question # 5

An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threatto the bank. Because it is an o line bank the most important recommendation for the expert to make isthat the bank

A. limit the amount which can be processed per transaction.
B. ensure that prospective new customers can be properly identified.
C. set up automated programs to analyze transaction for money laundering activity.
D. ensure that a firewall is set up to protect the transactions.

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Question # 6

During an ongoing investigation into a client's activities by a competent authority, a compliance officershould

A. Ensure communication with regulatory and law enforcement authorities is conducted only throughsenior management.
B. Communicate only in writing with regulatory and law enforcement authorities in line with applicablelocal laws.
C. Communicate with regulatory and law enforcement authorities in line with applicable local laws.
D. Limit communication with regulatory and law enforcement authorities to the absolute minimum.

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Question # 7

A money remittance business will most likely attract money launderers because it:1. deals primarily in cash transactions.2. engages in international transactions.3. conducts transactions for walk-in customers.4. 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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Question # 8

Which of the following represents the first Financial Action Task Force initiative?

A. The 40 Recommendations on Money Laundering
B. The Report on Non-Cooperative Countries and Territories
C. The Report on Money Laundering Typologies
D. The Special Recommendations on Terrorist Financing

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Question # 9

Which of the following is the best action to take regarding a particular account once suspicious activity is reported by the institution?

A. Notify the client that the transaction has been reported.
B. Freeze the funds pending notification from the competent authority.
C. Secure all supporting documentation.
D. Immediately close the account.

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Question # 10

Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy lawstriggered an alert. Which of the following should cause the most suspicion of money laundering? 

A. The jurisdiction is a known tax haven.
B. The company has bearer shares.
C. The corporation director is a European citizen.
D. No financial statements have been filed for 3 years.

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Question # 11

A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank. Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity? 

A. Ensure the designated entity's confidential information is not shared with other entities.
B. Obtain additional information about customers permitted to use this account.
C. Verify that the EU bank serves the designated entity.
D. Perform enhanced due diligence on the EU bank. 

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Question # 12

The anti-money laundering specialist of a small bank has identified suspicious activity at a branch located in an area of town where drug dealers are known to operate. An investigation of this activity discloses that the suspicious transactions occurred within the last 3 months and were processed by thesame teller (cashier). The teller (cashier) did not file an internal report of unusual activity on these transactions. When checking personnel files, the specialist finds that the teller (cashier) has been a trusted employee for over 15 years, has an impeccable work record, and has participated in several antimoney laundering training sessions. The specialist recently became aware that the employee's daughter has contracted a rare disease and is undergoing a very expensive treatment program. Regarding the teller's (cashier's) failure to report the unusual activity to the institution, the specialist should recommend

A. Continuing to monitor the accounts.
B. Refreshing anti-money laundering training for the teller (cashier).
C. Directing the teller (cashier) to file a suspicious transaction report.
D. Suspending the teller's (cashier's) employment.

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Question # 13

An anti-money laundering specialist at a financial institution has received a legal request to provide all transaction records for a specific individual since 2004. Which of the following item s should be delivered?1. Monthly statements and transaction activities for that individual since 2004.2. All wire transfers for that individual since 2004.3. Signature cards from accounts opened by that individual since 2004.4. All security trading activities for that individual since 2004.  

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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Question # 14

An anti-money laundering specialist is concerned that several suspicious transaction reports will discusspotential illegal activity of bank employees. In this situation, which of the following is the immediateconcern for the institution?

A. Prohibiting distribution of suspicious transaction report copies to the Board.
B. The timing of the presentation of suspicious transaction reports to the competent authority.
C. The type of form to be used when reporting to the Board.
D. Ensuring no delay in informing the Board.

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Question # 15

A charity has unaudited accounts. Which of the following represents the highest risk factor for terroristfinancing? 

A. Disbursement of funds to entities unrelated to the purpose of the charity.
B. An international board composed of politically exposed persons.
C. Frequent deposits from third parties into the charity's bank account.
D. Frequent changes to the senior management of the charity.

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Question # 16

An offshore company is owned by four equal partners that reside in separate jurisdictions. One partner presents an authenticated power of attorney apparently executed by the remaining three partners in his favor and requests that a bank account be opened on behalf of all partners. He needs this done quickly because there is a large deposit pending. The account-opening officer contacts the bank's anti-money laundering officer for advice. Which of the following should the anti-money laundering officer advise as an initial step? 

A. Verify the identity of all the partners.
B. Verify the source of the deposit.
C. File a suspicious transaction report with the appropriate Financial Intelligence Unit.
D. File a suspicious transaction report with the Egmont Group.

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Question # 17

Following a recent exercise which explained how a correspondent banking operation could be used byN money launderers, an anti-money laundering specialist decided to re-write the due diligence procedures for entering into agreements with foreign financial institutions. Which of the following information should be included to establish a rigorous "Know Your Respondent" procedure?1. Respondent's management, nature of license, and major business activity.2. Computer equipment and software capability.3. The quality of supervision in the home country.4. Respondent's location, in particular the existence of a real physical presence.

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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Question # 18

Which of the following competent authorities should directly receive suspicious or unusual transaction reports?

A. law enforcement
B. an independent judge
C. financial intelligence unit
D. central bank

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Question # 19

An anti-money laundering specialist has been hired by an independently-owned community bank to implement an anti-money laundering compliance program. This bank has recently seen a dramatic increase in the number of international electronic fund transfers from its commercial clients. The first thing the anti-money laundering specialist should do is

A. file a suspicious transaction report on international customers receiving large electronic fundtransfers.
B. conduct a risk assessment of the bank's international electronic fund transfer activity.
C. develop a new account questionnaire to quantify the level of risk for new international accounts.
D. close all accounts which have had a dramatic increase in international electronic fund transferactivity.

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Question # 20

A businessman requests a European private bank to open a numbered or alternate name account. According to the Basel Committee on Banking Supervision principles, which of the following is the most important question the banker should ask? 

A. Who will control the account?
B. Who will inherit the proceeds in the event of the businessman's death?
C. How much money will be deposited into the account?
D. What account-opening date should I record'!'

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Question # 21

An anti-money laundering specialist notes a significant reduction in suspicious transaction report filingsat a particular branch. Which of the following actions is most appropriate?

A. Place the branch on the watchlist to assure a review during the next quarter.
B. Analyze the branch activity reports to determine whether there has been a decrease in branchactivity.
C. Review branch exception reports to determine changes in activity in accordance with customerprofiles.
D. Review staff records to see whether inexperienced personnel are in critical positions withoutappropriate training.

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Question # 22

Which of the following reflect money laundering risk indicators in relation to a securities account?1. A high level of activity in that securities account immediately followed by a high volume of securitiestransactions.2. Frequent wire transfers into an account immediately followed by debit card transactions.3. Frequent wire transfers into an account immediately followed by checks (cheques) or other paymentinstruments drawn on the account.

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

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Question # 23

When creating an anti-money laundering program for a foreign bank with branches in the United States, which of the following are included among the four minimum elements required under the USA PATRIOT Act?1. The development of a Know Your Customer program.2. An ongoing employee training program.3. The designation of a compliance officer.4. An independent audit function to test the program.  

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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Question # 24

A financial institution files a suspicious transaction report on a customer as the result of a high volume of large currency deposits to pay off a loan. A law enforcement officer calls the anti-money laundering officer to discuss the suspicious transaction report. Which of the following is the anti-money launderingofficer legally permitted to do?1. Discuss any aspects of the reported activity.2. Provide copies of the customer's loan documents.3. Explain the customer's loan payment history.4. Send the deposit documents referenced in the suspicious transaction report.

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

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Question # 25

A customer has held an account at a local credit institution for 10 years. The account has received deposits twice weekly for the same amount and has never shown signs of suspect behavior. Monitoring software indicated that in the past few months the account has received several large deposits that were not in line with the account history.When asked, the customer states she recently sold a piece of property, which is supported with a proof of sale. Which of the following should the compliance officer do next?  

A. Investigate these unusual transactions further.
B. Contact the local FIU for advice
C. File an STR with the competent authorities
D. Document reasons for not filing a STR

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Question # 26

An audit completed the previous week revealed that a private banking customer submitted incompletedocuments when establishing an account earlier in the year. The customer received weekly electronicfund transfers from a narcotic-producing jurisdiction. While the Relationship Manager who opened the account is on leave for 5 weeks, the customer requests that the institution remit a substantial sum to a country that represents a high risk of money laundering. The Relationship Manager is a friend of the anti-money laundering specialist. Which of the following should the anti-money laundering officer do first? 

A. File a suspicious transaction report with the competent authority.
B. Investigate the transfer of funds.
C. Suspend the transfer until the relationship manager returns.
D. Postpone the follow-up on the audit finding.

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Question # 27

Trusts established in certain offshore jurisdictions make good vehicles to lay under money for which of the following reasons?

A. Names of the settlor and beneficiaries are into publicly available.
B. Trusts are typically set up to minimize taxes.
C. Offshore jurisdictions are unfamiliar with trust.
D. Trusts may hold assets of significant size. 

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Question # 28

Which of the following customer transactions with a securities dealer would indicate the highestsuspicion of money laundering?

A. Frequent trades in unlisted securities throughout the day on a regular basis.
B. Recurring transfers of money into a brokerage account subsequently invested in short-termsecurities.
C. An unexplained high level of account activity with very low levels of securities transactions
D. Investment in securities with a significantly lower risk than the customer's expressed risk tolerance.

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Question # 29

With which of the following should an anti-money laundering officer coordinate when implementing a new hire screening program? 

A. Internal auditor
B. Local Financial Intelligence Unit
C. Human resources
D. Institution’s regulator

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Question # 30

A financial institution located within the European Union has historically allowed anonymous accounts.Which of the following is the best method for this institution to use to ensure compliance with theEuropean Union Money Laundering Directives?

A. Close these accounts immediately and send funds to account holder.
B. Freeze these accounts and remit funds to the appropriate Financial Intelligence Unit beforecompleting any transaction.
C. Alert local law enforcement authorities of activities observed in these accounts.
D. Perform the required customer due diligence on these accounts before accepting or completing anytransaction.

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Question # 31

An internal investigation log is primarily intended to:

A. Provide training on investigations to the anti-money laundering officer and Financial Intelligence Unit.
B. Track the status of investigations into unusual activity.
C. Report status of investigations to the Board of Directors.
D. Detect and monitor possible suspicious activity.

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Question # 32

A well-developed anti-money laundering compliance program is unlikely to achieve institutional goalswithout

A. Screening all staff.
B. Training appropriate employees.
C. Verification of account owners. 
D. Endorsement by a competent authority.

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Question # 33

A suspicious transaction report has been filed on an account owned by the wife of the bank's Chief Executive Officer. Which of the following is the most important consideration when deciding whether to recommend closing the account? 

A. The institution's anti-money laundering policy
B. Requests from the competent authority
C. Customer relations
D. Chief Executive's reputational risk

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Question # 34

The most important anti-money laundering issue associated with on-line banking is accurately

A. Capturing data
B. Analyzing data
C. Identifying clients
D. Generating reports

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Question # 35

During the course of work on behalf of a client, a lawyer participated in the movement of money. If the lawyer suspects an act of money laundering, which of the following should the lawyer do according to European Union Money Laundering Directives?

A. Follow bank secrecy laws.
B. Report the facts to the competent authorities.
C. Inform the client of the intent to terminate services.
D. Adhere to business confidentiality laws.

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Question # 36

Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?

A. Filing a suspicious transaction report when you know or suspect money laundering is taking place
B. Knowingly financing a resort development with the proceeds of arms trafficking
C. Assisting a client in a property conveyance by effecting the transfer of ownership from the seller tothe purchaser when you don’t know the purchaser
D. Discussing your suspicions with a client, thus giving the client the opportunity to switch serviceproviders and to cover his tracks in future transactions

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Question # 37

Once a financial institution has reported suspicious transactions on a valued customer, it shouldcooperate with competent authorities by:

A. Maintaining adequate written documentation of all individuals and transactions reported.
B. Hinting to the customer that she should come in and explain her behavior.
C. Submitting information upon receiving a legal request from parties involved in a civil lawsuit.
D. Providing the supporting documentation to competent authorities upon request.

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Question # 38

Which event occurs most frequently in money laundering in the insurance industry?

A. Getting a reimbursement from an overfunded policy
B. Purchasing full-term insurance bonds
C. Failing to take advantage of the free-look period
D. Redeeming a policy at the end of its term

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Question # 39

Which action indicates possible Penza scheme activity?

A. A licensed seller offers higher profit on investments in a high risk country
B. An unlicensed investment advisor offers profits other investments cannot guarantee
C. A licensed investment advisor lures aging/retired professionals to invest in securities
D. A unlicensed investment advisor offers returns that are competitive with industry benchmarks 

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Question # 40

On discovering employees had unintentionally provided assistance to customers who were structuringtransactions, an anti-money laundering specialist should recommend.

A. Beginning termination procedures for these employees. 
B. Contacting law enforcement to monitor these employees.
C. Providing remedial training to these employees.
D. Transferring these employees to another branch.

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Question # 41

The owner of a local retail store makes multiple deposits daily at a bank. When the owner makes thesedeposits, it is noted that he goes to different tellers (cashiers). The deposits consist of cash in amountsless than the currency reporting threshold. Which of the following best describes this activity?

A. layering
B. structuring
C. integration
D. commingling

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Question # 42

An account officer who maintains an excellent relationship with the finance manager for a correspondent bank customer learns that many records for the correspondent bank have been requested by law enforcement. In the interest of maintaining a good relationship with the customer, the account officer sets up a meeting to discuss the legal request with the customer. The account officer intends to discuss points related to the investigation during this meeting. Which of the following should an anti-money laundering specialist recommend?

A. Discuss all the points being investigated by law enforcement to ensure the correspondent bank iswell prepared when approached.
B. Let his manager know what conversations have taken place with the customer and document theaccount file accordingly.
C. Limit discussions about the investigation with the customer and be satisfied that he has providedproper notice to the customer.
D. The meeting should be cancelled as he has already behaved inappropriately by alerting the customerto the investigation.

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Question # 43

Which three conduits for moving terrorist-related funds do terrorist financing generally favor? Choose 3 answers

A. Banks and/or other formal financial systems
B. Informal financial systems
C. Currency exchange firms
D. Cash couriers

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Question # 44

Which practices are dealers in antiques, precious metals, precious stones, jewelry, and art advised to follow to reduce the element of money laundering risk? Choose 3 answers

A. Insist on all vendors signing a declaration that the item placed by them for sale was not stolen oracquired through illegitimate means
B. Verify the identities of all new vendors and customers and conduct due diligence on them
C. Avoid accepting cash payment from the buyers
D. Insist all vendors submit an appropriate license issued by enforcement agencies authorizing the sale

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Question # 45

A non-U.S. bank asks its U.S. correspondent whether there is risk of having funds seized in their correspondent account if a customer is involved in a predicate offense. The correspondent bank's reply should be, 

A. "No, only U.S. accounts for U.S. citizens can be seized and forfeited by the competent authority."
B. "No, only correspondent accounts of U.S. banks can be seized and forfeited by governmentagencies."
C. "Yes, if it is suspected that money laundering has occurred solely in the U.S."
D. "Yes, also if the customer's account is used in a country other than the U.S. by suspected moneylaunderers."

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Question # 46

A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?

A. The Egmont Group
B. The Wolfsberg Group
C. The Financial Action Task Force
D. The Basel Committee

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Question # 47

An anti-money laundering consultant audits a bank's current anti-money laundering policies, proceduresand controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses. During a review of the customers list, the anti-money laundering consultant determines that he and the bank have mutual clients. The bank's written anti-money laundering program includes a process for the bank to establish the identity of the person with whom they conduct business, but does not address monitoring of customer account activity. The consultant should recommend the bank:

A. Continue to follow the current written anti-money laundering program.
B. Focus on high-risk customer acceptance procedures.
C. Reduce the risk rating on the mutual customers.
D. Revise the procedures to better assess ongoing customer activity.

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Question # 48

Which three stages of money laundering are on-line banking vulnerable to?

A. Placement
B. Layering
C. Integration
D. Structuring

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Question # 49

Normal account-opening procedures reveal a customer who contacted a financial institution to open abank account is the brother of a prominent member of a foreign judiciary. Which of the followingactions should the anti-money laundering specialist recommend immediately?

A. Monitor the customer's account.
B. Perform enhanced due diligence.
C. File a suspicious transaction report with the competent authority.
D. Contact the institution's legal advisor.

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Question # 50

Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?

A. A MSB should be used to hide money from a regulated entity
B. MSBs generally charge lower commission rates than banks charge making them attractive tocriminals
C. MSBs can route funds to more high risk countries than banks
D. MSBs are subject to regulatory scrutiny which varies greatly from country to country

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Question # 51

Which of the following should an anti-money laundering specialist consider the most serious deficiencywhen detected during a regulatory audit of the anti-money laundering program? 

A. The compliance officer fails to have on-going meetings with upper management to keep themapprised of current money laundering trends.
B. The company's anti-money laundering manual has not been updated to reflect a recent internalcontrol enhancement.
C. The company has failed to download the most recent regulation from the Financial Intelligence Unitweb site.
D. The company has not implemented an anti-money laundering training program.

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Question # 52

Which three actions should employees be instructed to do during an internal investigation?

A. Provide corporate documents directly to law enforcement
B. Inform counsel of all request for documentation
C. Make copies of all documents provided to law enforcement
D. Keep a log of the documents requested

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Question # 53

An anti-money laundering specialist is employed by a large multi-national bank. The bank is planning toopen an international department that will be responsible for expanding services to various countries.The head of the new international department has asked the specialist to assess risks associated withthe bank's expansion plans. Which of the following materials should be included as a reference?1. USA PATRIOT Act2. Financial Action Task Force 40 Recommendations3. Customer Due Diligence for Banks issued by the Basel Committee on Banking Supervision4. The Egmont Group Statement of Purpose

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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Question # 54

What is the intentional evasion of a reporting or recordkeeping requirement?

A. Money laundering
B. Layering
C. Placement
D. Structuring

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Question # 55

Which of the following best describes the Basel Committee on Banking Supervision's principles oncustomer due diligence?

A. Multilateral agreement between all members.
B. A recommendation to members and banks.
C. Generally accepted terms issued by big international banks.
D. A country's initiative to increase the reputation of its financial market.

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Question # 56

When a bank performs a risk assessment, what areas should an institution focus on?

A. The type and location of the institution’s clients
B. The nature and breadth of the services and products the institution provides
C. The geographic locations where the institution does business
D. The amount of the money the institution earns prior to taxes

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Question # 57

Which of the following is the most likely reason for the Financial Action Task Force to remove ajurisdiction from the Non-Cooperative Countries and Territories list? 

A. Conducting successful annual self-assessments.
B. Entering into a mutual legal assistance treaty.
C. Joining the Wolfsberg Group.
D. Receiving a favorable mutual evaluation.

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Question # 58

What indicates potential money laundering activity by a lawyer?

A. A lawyer’s trust account regularly receives wire transfers from unknown remitters in a high riskcountry and immediately redirects the same funds to the same remitters account in a low risk country
B. A lawyer’s trust account receives a large value wire transfer from a publicly listed life insurancecompany and then immediately transfers the same funds out to an unknown individual in a low riskcountry
C. A lawyer’s account in a low risk country receives a bank draft from another lawyer firm in a high riskcountry
D. A lawyer’s account in a high risk country receives a cash deposit of an amount that is considerablebelow the reporting threshold

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Question # 59

What is the most effective criterion for determining the beneficial ownership of funds?

A. Having signature authority over the account
B. Being the person in whose name an account is opened with a financial institution
C. Having control over such funds or entitlement to such funds
D. Being a person who is the trusted party in a correspondent banking relationship

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Question # 60

An individual opened an account with a minimal cash deposit at a financial institution. He presented a foreign passport and stated he would be working locally for a few months. He also requested information about making electronic fund transfers. The institution was subsequently unable to verify the employment or residence information provided by the individual. Soon after this, a large transfer was sent to the customer's account. Which of the following is the course of action recommended by the Basel Committee on Banking Supervision's Customer Due Diligence for Banks?

A. Post the deposit to the account and notify the customer that the deposit has been made.
B. Implement enhanced due diligence procedures to monitor the account for suspicious activity.
C. Close the account and return the funds to the source from which they were received.
D. End the relationship by sending a check (cheque) to the customer for the full amount in the account.

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Question # 61

To what extent should senior management and the Board of Directors be involved in the filing of any STR?

A. They should be informed of all significant STRs and the numbers and trends of the filings
B. They should be given copies of all STRs filed by the institution
C. They should review and approve the filing of all STRs
D. They should be the only designated individuals to communicate with law enforcement

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Question # 62

The most effective tool used to detect structured transactions is

A. Verification of the source of funds.
B. A comprehensive account-opening procedure.
C. An employee training program to detect suspicious transactions.
D. A software program that can link apparently unrelated transactions.

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Question # 63

Which three statements are true about on-line banking offering a significant money laundering risk to a financial institution?

A. The nature of on-line banking can make it difficult to establish who is controlling the account
B. The ease of access through the internet enables cross border movement of funds
C. Due to client confidentiality, information collected on-line cannot be shared with law enforcementagencies on mere suspicion
D. The speed of electronic transaction enables execution of multiple complex transactions within shorttime frame

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Question # 64

An anti-money laundering specialist at a large institution is responsible for informing senior management about the status of the anti-money laundering program across the organization. The global institution handles retail banking, commercial banking, global markets, private banking and has anaffiliated securities dealer. The specialist and the team provide corporate strategic direction to these areas on anti-money laundering related subjects. The following information is reported to executive management on a regular basis:? Total number of suspicious transactions identified and reported ? Suspicious transaction trends? Training that has occurred for the various units? Status report on the anti-money laundering regulatory environment? Summary of exception reportsWhich of the following additional elements is the most useful? 

A. The total credit exposure for non-cooperative countries and territories.  
B. Results of related audits and examinations.  
C. Details on inquiries received from law enforcement.  
D. Notification of management changes in the different major divisions.  

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Question # 65

Historically, which vehicle is most often used to hide beneficial ownership?

A. Professional association
B. An offshore company
C. A limited liability partnership
D. A charitable organization

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Question # 66

Which method is indicative of potential money laundering and terrorist financing activity?

A. Client converts 500 Euro in mixed denomination notes to small denomination U.S. bills in a singletransaction
B. A commercial client in the export business regularly receives wire transfers from high risk countries
C. An unknown client purchases multiple monetary instruments for one person during the course of oneday
D. An unknown client pays $1,000 in cash for an urgent transfer to a high risk country

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Question # 67

When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do? 

A. It should turn over the documents that were previously collected to support the STR
B. It should request a written subpoena or court order before turning over any documents
C. It should have its outside counsel review the request and the documents before doing anything
D. It should politely decline to provide the requested documents until the law enforcement agency canexplain the nature and purpose of its inquiry

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Question # 68

A large cash deposit most likely reflects money laundering when it is:1. from a customer who has never conducted a transaction in cash before.2. transacted in segments smaller than the reporting thresholds at various times during the day.3. followed by an immediate wire transfer to an offshore secrecy haven.4. by a customer who operates a cash-based business.

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

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Question # 69

Historically, which of the following vehicles is most often used to hide beneficial ownership?

A. an offshore company
B. a professional association
C. a limited liability partnership
D. a charitable organization

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Question # 70

Which function provided by lawyers can be useful to a potential money launderer as documented byFATF in its typology report 2000-2001? Choose 3 answers

A. Creating complex legal arrangements
B. Buying and selling property
C. Performing financial transactions on behalf of a client
D. Providing legal advice

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Question # 71

A compliance officer is developing an anti-money laundering program for a financial institution located in a Financial Action Task Force member country. The institution conducts business with customers located in countries/jurisdictions that are not members of Financial Action Task Force. Which of thefollowing issues should be addressed in the program?1. The requirement to identify the beneficial owners of accounts.2. The requirement for customer identification for the opening of new accounts.3. The financial institution's obligation to report suspicious transactions.4. The obligation to freeze funds involved in suspicious transactions.

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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Question # 72

In establishing procedures for the review of suspicious transactions and filling of STRs, what thing should an institution focus on?

A. The need to have on-going training as to potential red flags that the institution might encounter
B. The appropriateness of having a centralized review of suspicious transactions and recommendationsto file an STR to ensure consistency
C. A system for tracking STRs and ensuring that appropriate supporting documentation is segregatedand maintained
D. The need not to ensure that the institution has a strong case of impropriety before filling an STR

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Question # 73

According to the Financial Action Task Force 40 Recommendations, to fulfill identification requirementsconcerning legal entities, financial institutions should take measures to verify

A. the financial status of the legal entity through documented proof of the entity's other bankingrelations.
B. a person purporting to act on behalf of the legal entity who is a resident in a country with strictsecrecy laws.
C. the legal existence and ownership structure of the legal entity.
D. funds or trusts maintained by terrorists.

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Question # 74

What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers

A. Limited types of institutions and persons covered by money laundering laws and regulations
B. Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate orfreeze assets related to money laundering
C. A large number of predicate crimes for money laundering
D. Absence of an effective FIU

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Question # 75

According to Basel Committee on Banking Supervision guidelines, which of the following statementsbest describes the relationship between the internal audit function and compliance?

A. The internal audit methodology should include an assessment of compliance risk.
B. An internal audit program of adequacy of the bank's compliance function should be established, butshould not include review of transactions.
C. The compliance function and internal audit function should be combined.
D. The auditors should not discuss internal audit findings with compliance management to maintainindependence.

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Question # 76

What types of things should an institution incorporate in it AML policies and procedures? Choose 3 answers 

A. On-going training, as well as initial training of new employees
B. Periodic audits, to be performed by independent staff at least once a year
C. Ability to incorporate relevant legislative and regulatory AML changes
D. Review of the AML policy by the Board of Directors

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Question # 77

A financial institution recently purchased anti-money laundering software. The software routinely generates more alerts than the anti-money laundering staff can properly analyze as a result of limited staffing. These alerts are generated by default software rules. Which of the following should the individual responsible for setting the anti-money laundering software parameters recommend?

A. Reset software parameters to reduce risk sensitivity.
B. Disable the software until more staff are trained to process alerts.
C. Ensure alert parameters are based on risk.
D. Adjust software parameters so the number of alerts decrease gradually.

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Question # 78

In which situation can money laundering adversely affect a country’s currencies and interest rates due to launderers investing dirty funds? 

A. They invest in high risk ventures with high rates of return
B. They invest in legitimate companies as a way of making their funds appear to be legitimate
C. They invest in shell companies in secrecy havens that intentionally manipulate rates
D. They invest in a way to hide funds rather than get a high rate of return

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Question # 79

AThe most important concerns imposed on foreign financial institutions maintaining correspondentaccounts with U.S. banks under the USA PATRIOT Act are:1. Cancellation of correspondent banking relationships.2. Forfeiture of funds in a U.S. interbank account.3. Prohibition of correspondent accounts for shell banks.4. U.S. residents maintaining private banking accounts.

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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Question # 80

Under the Wolfsberg AML Principles on Private Banking when establishing a relationship with a trust afinancial institution should perform due diligence on which three parties? Choose 3 answers

A. Those entitled to the funds (e.g., beneficiaries)
B. The provider of funds (e.g., settlor)
C. Those who have the power to appoint or remove trustees
D. Those who have power over the funds (e.g., trustees)

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Question # 81

n internal review of anti-money laundering training documentation revealed only new agents employed by a financial institution that sells life insurance products were trained. Additionally, it typically took the institution 8 months to begin training for new actuaries. The compliance officer explained training was limited to actuaries because they perform the only high-risk function. The institution relied on e-learning techniques without follow- up assessment.Which of the following issues would the internal review most likely recommend?

A. All staff, apart from the Board of Directors, must be trained.
B. Pro duct-specific anti-money laundering training should be provided company-wide.
C. The institution must provide anti-money laundering training to actuaries within 6 months.
D. Continue using e-learning to emphasize anti-money laundering content during training. 

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Question # 82

Which statement describes the relationship between the internal audit function and compliance?

A. The internal audit methodology should include an assessment of compliance risk 
B. An internal audit program of the adequacy of the bank’s compliance function should be established,but should not include review of transactions
C. The compliance function and internal audit function should be combined
D. In order to maintain independence, the auditors should not discuss internal audit findings withcompliance management

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Question # 83

A financial institution accepts new on-line customers. After customers have provided acceptableidentification, the institution should next

A. Confirm the validity of the customer information.
B. Obtain an electronic picture of each customer.
C. Closely monitor the account for 30 days.
D. Establish the account based on the information provided.

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Question # 84

What is a Hawala?

A. A hedge fund in the Middle East
B. A licensed means of transferring money
C. A method of transferring funds based on trust
D. A transaction monitoring package for banks

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Question # 85

A junior account manager within an international private bank in Country A noticed that one of his valued customers, who has held an account for several years in the institution, started making cash deposits in batches through various banks in Country B. The account never received cash deposits andthe junior account manager knew that banks in Country B were located very close to each other. What should the junior account manager do?

A. Close the account.
B. File a suspicious transaction report with the Financial Intelligence Unit.
C. Notify the anti-money laundering specialist of his bank, but do not call the customer.
D. Offer the customer a more secure method of depositing in the hope of learning something moreduring the conversation.

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Question # 86

According to the FATF Special Recommendation VII, cross-border wire transfers over 1,000 EUR/USD should be accompanied by what information?

A. The originator’s account number
B. The purpose of the transfer
C. Customer Due Diligence information
D. The AML standards that apply to the transfer

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Question # 87

AAn alert has been triggered by a monitoring system and an investigation has been opened. The activity involves significant and multiple cash deposits into a personal account and transferring funds to an offshore bank on the same day. Further investigation reveals this personal account had experienced lowlevels of activity for the past 6 months and funds are transferred to the account of a charitable organization. Which of the following is the next step that the Compliance Officer should take?

A. Prohibit further transactions with the charitable organization.
B. Conduct enhanced due diligence on the charity's trustees.
C. Place the charitable organization on the bank's internal "watchlist."
D. File a suspicious transaction report with the competent authority.

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Question # 88

While all employees need AML awareness training, which three groups within the institution shouldreceive targeted AML training? Choose 3 answers

A. The AML officer and the compliance staff
B. Employees who have contact with customers or transactions
C. Senior Management and the human resources staff
D. The Board of Directors and Senior Management

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Question # 89

casino incorporated in an offshore location approaches a financial institution to open an account relationship. The casino operates in a country that complies with Financial Action Task Force 40 Recommendations. The casino provides documentation of beneficial ownership. According to theFinancial Action Task Force 40 Recommendations, the primary concern for the financial institution prior to opening the account is to

A. Verify the casino is licensed.
B. Secure gaming insurance.
C. Determine whether the casino conducts on-line gaming.
D. Ensure the financial institution knows the casino's customers.

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Question # 90

A client has retained a lawyer to create a financial holding company. The lawyer resides in Europe. The client provides all requested documentation to the lawyer. However, the lawyer becomes suspicious that the customer is engaged in criminal activity and intends to use the financial holding company for money laundering purposes. Which of the following should an anti-money laundering specialist recommend according to the European Union Money Laundering Directives?

A. There is no need to file a suspicious transaction report, as this activity is covered by attorney-clientprivilege.
B. Freeze the client's assets so that all records can be turned over to the competent authorities.
C. Report the activity as suspicious to the competent authority because the lawyer is covered by thesedirectives.
D. Consult with the competent authority to receive advice on how to handle the transaction.

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Question # 91

Which issue does the FATF special Recommendations on Terrorist Financing address?

A. Freezing and confiscating assets
B. Ratification of European Union directives
C. Non-cooperative countries and territories
D. Mutual evaluation of Arabic countries

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Question # 92

Can trading in antiques be useful for money laundering?

A. No, because the antiques market is rather small and unusual transactions would draw attention.
B. No, because antique sales and purchases are highly regulated worldwide.
C. Yes, because cash is often physically hidden within the antiques themselves.
D. Yes, because antiques can be of high value and often easily transported.

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Question # 93

When hiring new employees, what should an institution do to ensure that the prospective employee is properly screened? 

A. Review the accuracy of the candidate’s resume and written statements as to his or her background
B. Evaluate the level of training the candidate has had in preparation for the prospective position
C. Contact the candidate’s last school to ascertain the candidate graduated with a valid degree
D. Perform a criminal background check on the candidate

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Question # 94

A financial institution is reorganizing and the anti-money laundering officer is now required to report to the Sales Director. Which of the following statements about this situation is most correct?

A. The reorganization will ensure communication of anti-money laundering issues to the board.
B. The reorganization will enhance the compliance framework.
C. The anti-money laundering officer should be elevated to a position on the Board.
D. The anti-money laundering officer should be independent of business functions.

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Question # 95

Which statement is true according to the FATF?

A. When deciding on the range of offenses to be covered as predicate offenses for money laundering,each country should define the nature and any particular elements of those offenses
B. Countries should not decide how they will define predicate or underlying offenses, or the nature ofany particular elements of those offenses that make them serious offenses, but should base theoffenses on FATF definitions
C. When deciding on the range of offenses to be covered as underlying offenses for money laundering,each country may decide how serious offenses
D. Predicate or underlying serious offenses are determined by the designated non-financial businessesor professionals that are covered by the FATF 40 Recommendations 

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Question # 96

A compliance officer at a small local bank reads in the newspaper that a high ranking local public official, who is a long-standing account holder, is being investigated by the competent authorities for accepting bribes from a well-known construction company with offices in the town. The compliance officer immediately checks the official's account and other recently opened accounts at the bank. The official opened a new account at the bank a few weeks ago. The compliance officer's investigation of these accounts discloses that the official's longstanding account had no unusual activity and the recently opened account had no activity since it was opened. Which of the following should the compliance officer do next?

A. Wait until the new account receives funds and confirm their source.
B. Call the competent authorities to assess the need to file a suspicious transaction report.
C. Meet with staff who opened the account to understand its nature and purpose.
D. Call the official's office to confirm the need for multiple accounts.

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Question # 97

According to the Financial Action Task Force Special Recommendations on Terrorist Financing, which of the following should an anti-money laundering specialist do if the specialist has reasonable grounds to suspect funds are linked or related to terrorist acts?

A. Conduct a full due diligence review of the client.
B. Inform the institution's managing Board.
C. Contact the institution's legal advisor.
D. Promptly report to the competent authority.

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Question # 98

Which of the following are the most suspicious transaction indicators related to casino activities? 1. A client requests a winnings check (cheque) in a third party's name.2. Acquaintances bet against each other in even-money games and it appears they are intentionallylosing to one of the parties.3. A new client who is a large volume player asks the casino operator about the ability to transfer thefunds to other locations in the same country.4. A client requests the transfer of winnings to the bank account of a third party in a country without aneffective anti-money laundering regime.

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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Question # 99

After several months of research, the Director of Marketing and the Managing Director of Business NDevelopment received approval to launch a branded, stored-value card that will be marketed to the diverse, primarily non-resident population that comprises the bank's current customer demographics. The Chief Credit Officer and the Risk Officer have also been involved in the efforts to develop the card. After the card is launched, the anti-money laundering officer is consulted. The anti-money laundering officer should advise the bank that compliance should have been involved

A. After product development to confer with the legal department.
B. After product development to perform an assessment of the product.
C. During product development to develop reports for the Board.
D. During product development to perform a risk assessment of the product.

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Question # 100

On what basis are international sanctions imposed against entities?

A. For their involvement in the black market peso exchange
B. For their involvement in human trafficking and bulk cask smuggling
C. For their involvement in terrorism
D. For their involvement in stripping information from SWIFT cover payments and Letters of Credit

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Question # 101

An anti-money laundering specialist working at a bank just received a legal request from a law enforcement agency mandating the release of all financial transaction records relating to an account at the bank. The specialist immediately recognizes the account as one owned by the bank Chief ExecutiveOfficer's brother. During research to gather the requested documents, the specialist finds several internal memos he had sent to the bank president with concerns regarding possible suspicious activity relating to this account. The specialist recalls the bank president verbally responded to each memo withan explanation of the activity and indicated there was no cause for concern. Which of the following should the specialist do with respect to these internal memos?

A. Place these memos in his personal files in case they are subsequently requested.
B. Ask the bank president to document his instructions to the specialist. 
C. Call the law enforcement agent and suggest he modify the legal request to include these memos.
D. Advise the bank's senior legal advisor of the situation.

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Question # 102

AML cooperation between countries consists of which three official gateways? 

A. Mutual Legal Assistance Treaties (MLAT)
B. The supervisory channel
C. The Basel Committee
D. A communication between Financial Intelligence Units (FIU) 

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Question # 103

A relationship manager in a bank has had a private banking customer for 10 years. The customer hasbusiness accounts and investments and seeks advice on the creation of a company overseas. Therelationship manager refers the customer to the commercial banking manager and vouches for thecustomer. Which of the following risk factors is the most important?

A. The proposed offshore jurisdiction is known for its strong privacy laws limiting access to customerinformation by law enforcement.
B. The customer does not want to provide more information than when the first account was opened.
C. The company wants to transfer funds in large, even amounts.
D. Entities that are to receive funds from this company are located in the same country.

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Question # 104

What should an institution in their AML policies and procedures?

A. A component on when and how employees will be trained
B. A description of money laundering trends and methodologies
C. Names of individuals currently on the OFAC list
D. Copies of the institutions testing and monitoring results

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Question # 105

A quarterly review is conducted on a retail customer's account at a bank located in a jurisdiction withcurrency reporting thresholds. A number of large deposits of financial instruments drawn on other institutions in amounts under thresholds were noted. This activity did not fit the account's historicalprofile. A suspicious transaction report will most likely be filed if which of the following also occurred?

A. The customer has defaulted on a large loan with the bank.
B. The deposited financial instruments were sequentially numbered.
C. Four deposits were made during this period that exceeded the thresholds.
D. The customer purchased financial instruments exceeding the threshold on three occasions.

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Question # 106

What should a compliance officer provide to facilitate board understanding of suspicious activity reported by an institution? 

A. A listing of all STRs filed, including supporting details
B. Copies of all STRs filled with the national FIU
C. A numerical summary of the STRs filed, including additional detail on significant cases
D. A numerical summary of all STRs filed, including supporting details on all the STRs

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Question # 107

Suspicious activity triggered a suspicious transaction report filing on a company that holds an account ata large commercial bank. Investigations revealed that a member of the bank's Board of Directors is themajor shareholder of the company. Further review revealed the bank had no reasonable explanation forthe activity, but could not confirm if criminal activity occurred. Which of the following is the next bestcourse of action for the compliance officer?

A. Include a detailed presentation of this case in the Board report.
B. Prevent the suspicious transaction report from government filing.
C. Ask the Board member to explain the transaction. 
D. Maintain standard summary statistical reporting to the Board.

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Question # 108

When creating an anti-money laundering program for a foreign bank with branches in the U.S., which three are included among the four minimum elements required under the USA Bank Secrecy Act? Choose 3 answers

A. The development of a Know You Customer program
B. An ongoing employee training program
C. The designation of a compliance officer
D. An independent audit functions to test the program

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Question # 109

According to the Financial Action Task Force Special Recommendations on Terrorist Financing, what should an anti-money laundering specialist do if the specialist has reasonable grounds to suspect funds are linked or related to terrorist acts? 

A. Conduct a full due diligence review of the client
B. Inform the institution’s managing Board of Directors
C. Contact the institution’s legal advisor
D. Promptly report it to the competent authority

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Question # 110

An anti-money laundering specialist is employed by a large multi-national bank. The bank is planning to open an international department that will be responsible for expanding services to various countries. The head of the new international department has asked specialist to assess risks associated with the bank’s expansion plans. What three set of materials should be included as a reference? Choose 3 answers 

A. U.S. Patriot Act
B. FATF 40 Recommendations
C. Customer Due Diligence for Banks issued by Basel committee on Banking Supervisions
D. The Egmont Group Statement Purpose

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Question # 111

A school teacher recently opened a private banking account with a major bank. The customer indicated annual income of EUR 45,000 and listed her source of wealth as a EUR 1.5 million inheritance from relatives. The customer plans to invest EUR 12,000 to 15,000 earned annually from bearer bonds. Therelationship manager verified the client's identity and documented all of the above information in the account file before opening the account. During a routine review of the account, several electronic fund transfers in excess of EUR 5 million each were made from a diamond distributor. The relationshipmanager also noticed that in each instance, the customer immediately transferred the funds to bank accounts in Hong Kong. Which of the following is appropriate for the anti-money laundering specialist to recommend?

A. Arrange a meeting between the customer and legal department.
B. Contact the competent authority and local law enforcement.
C. Suspend further customer transactions through the bank. 
D. Investigate the source and purpose of the transactions.

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Question # 112

What type of records do the recordkeeping requirements of section 319 of the Patriot Act require U.S. banks to collect and maintain records of in the U.S. for each non-U.S. bank with which it maintains a correspondent relationship? 

A. Beneficial ownership and any Politically Exposed Person (PEPs) in the management chain
B. Ownership and agent for service of legal process
C. Name of attorney and name of all shell bank clients
D. Copy of AML policies and annual reports

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Question # 113

Which of the following activities is most likely associated with a lawyer participating in a moneylaundering scheme?

A. Frequently travels to countries considered tax havens.
B. Engages clients with high-net worth in foreign countries.
C. Represents persons accused of crimes against financial institutions.
D. Creates corporate entities to disguise true beneficial ownership of clients.

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Question # 114

A financial institution is reorganizing and the anti-money laundering officer is now required to report to the Head of Operations?

A. The reorganization will ensure communication of anti-money laundering issues to the Board of Directors
B. The reorganization will enhance the compliance framework
C. The anti-money laundering officer should be elevated to a position on the Board of Directors
D. The anti-money laundering officer should be independent of business functions

Show Answer

Question # 115

Which of the following is the main reason Internet gambling is an ideal web-based money launderingmethod?

A. Ease of connection and low subscription rate with major Internet service providers.
B. High credibility of gambling websites.
C. Ability to transfer value across jurisdictions.
D. Large number of offshore websites located in known high-crime areas.

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Question # 116

When a regulatory body requires international assistance in a money laundering inquiry, such assistanceis typically obtained by

A. Filing a request under Egmont guidelines.
B. Submitting a request for overseas assistance to the corresponding supervisory body.
C. Contacting the Financial Action Task Force, Organization for Economic Co-operation andDevelopment, or other international organizations and seeking their intervention.
D. Communicating with the Head of Compliance for the financial institution.

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Question # 117

Which question(s) about the respondent bank should a bank be able to answer before establishing correspondent accounts?

A. Who its owners are and what its regulatory history is
B. Who their AML officer is and what that person’s qualifications are
C. Which controls they have in place to mitigate sanctions list risk
D. How engaged the Board of Directors is in compliance efforts

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Question # 118

Which of the following customer activities poses the highest risk of money laundering?

A. Transferring funds to pay for flight training lessons. 
B. Paying a supplier of precious metals at regular quarterly intervals.
C. Making multiple cash deposits slightly below a required reporting limit.
D. Conducting business in a country that represents a high risk of money laundering.

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Question # 119

What are the attributes of “Cuckoo Smurfing” the money laundering term FATF added in 2005?

A. It involves the use of multiple individuals for making cash deposits, buying monetary instruments or bank drafts in amounts that are under reportable limit
B. It is linked to alternative remittance systems in which criminal funds are transferred through the accounts of unwitting persons expecting genuine funds from abroad
C. It involves the process of sending multiple wires abroad to money laundering havens and having the funds returned in smuggled bulk cash
D. It involves commercial transactions deliberately routed through retail organization’s bank accounts

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Question # 120

Which of the following best describes the Black Market Peso Exchange money laundering method?

A. A method primarily used by narcotics traffickers to transfer value back to the source country
B. The best known money laundering method used by known terrorists
C. An undercover technique to identify politically exposed persons who may assist money launderers
D. A method used to smuggle dollars or pesos across the border from the United States to Mexico, andvice versa

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Question # 121

A personal banking customer who simultaneously opens several accounts will most likely cause furtherinquiry in which of the following scenarios?

A. A personal account and a corporate account.
B. An individual account and a joint spousal account.
C. Accounts with almost identical names.
D. A checking and a savings account.

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Question # 122

According to the Financial Action Task Force 40 Recommendations, simplified customer due diligence or reduced measures could be acceptable for which three types of products or transactions? Choose 3 answers 

A. Life insurance policies where the annual premium is no more than USD/EUR 1,000 ot a single premium of no more than USD/EUR 2,500
B. Trusts where the settler, trustee and beneficiaries are identified and the shares are in bearer from
C. Insurance policies for pension schemes where there is no surrender clause and the policy cannot be used as collateral
D. A pension that provides retirement benefits to employees 

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Question # 123

To guard against acquisition or control of a financial institution by money launderers or their associates,supervisory agencies should require

A. adequate surety bonds, cash deposits, or equivalencies.
B. comprehensive compliance programs.
C. prospective owners have prior experience in the area of finance.
D. thorough due diligence on prospective owners.

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Question # 124

An anti-money laundering specialist has been asked to create internal anti-money laundering policies,procedures and controls for a recently chartered offshore financial institution. Which of the followingshould be included?1. A training program for senior management and staff.2. An anti-money laundering compliance program, internal audit program, and procedure manual.3. Basel Committee on Banking Supervision's capital adequacy requirements for the host country.4. Compliance requirements of host and chartering countries.

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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