CAMS-FCI Online Practice Questions and Answers

The investigations team of a financial institution (Fl) wants to perform enhanced due diligence measures on operations done by a foreign bank related to transactions of companies that export scrap gold and silver. What would be the next best steps for the investigations team? (Select Two.)

A. Ask the legal department if it can proceed to rescind the contract of the correspondent banking relationship since the export of scrap gold and silver is a high-risk activity.

B. Ask the respondent bank if it has a risk rating for the exporting companies, if the customer profiles are updated, and if so. when was the last time it was done.

C. Ask the respondent bank if the exporting companies have obtained an official license that permits the exporting of scrap gold and silver.

D. Ask the respondent bank if it can file a SAR/STR in its jurisdiction since the investigations team also plans to do the same in the Fl's home country.

E. Ask the business manager who handles the relationship of the respondent bank if they can persuade the bank to close the accounts of the export companies.

While each is potentially important, which allows an investigations analyst to better write a SAR/STR narrative that is useful to law enforcement? (Select Two.)

A. Including an explanation of the internal process that brought the transaction to the attention of the analyst

B. Including information about the general activity trends in the area where the suspicious transactions were conducted

C. Including contact information for individuals at other institutions with whom correspondence has occurred

D. Including a detailed description of the known or suspected criminal violation or suspicious activity

E. Ensuring all information in the SAR/STR is complete and accurate based on what the institution knows

A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary.

An investigator examines the trust. The trust has many layers, including shell companies in known tax havens. The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied.

Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts. While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested

information is shared.

Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined

trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and

committed tax evasion.

What steps should the investigator perform in reference to the first client's existing accounts? (Select Three.)

A. Review all client-signed documents relating to all accounts.

B. File SARs/STRs for all accounts at the beginning of the discovery phase and amend later as necessary.

C. Inform Fl management of all processes used to investigate the client due to LE inquiry.

D. Perform secondary scans of the client's other owners/authorized signers

E. Review Fl approved policies regarding the existing accounts to ensure regulatory requirements were followed.

F. Prepare a relationship flow chart of all existing accounts to better understand the client's activities.

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.

An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or 'care1. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

During the investigation, it was determined that some of the checks were issued to a mother-in-law of a PEP and deposited into her account with the Fl. This customer was not found on the Fl's PEP list How should the investigator proceed in

this situation"? (Select Two.)

A. Conduct the investigation as usual, since the activity in question is not directly connected to the PEP.

B. Reter the newly identified customers account for closure due to the high risk associated with the potential PEP.

C. Use this case as an example to train employees to recognize potential PEPs during their investigation process.

D. Send a referral to Sanctions/List Screening, or similar department/responsible individual, to ensure that the customer due diligence information is up to date.

E. File a SAR/STR due to the potential involvement of a PEP.

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business. An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing 'daycare' or 穋are'. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

Which red flags would be an indicator that activity is connected to a corruption/bribery typology? (Select Two.)

A. Large checks issued to various individuals with the memos noting "gift", "thank you", "favor"

B. Negative news found on the customer related to government-issued violations for safety

C. Checks issued to an unrelated entity referencing "rent" and "utilities" in the memos

D. Multiple daycare locations with no active business operations or related account activity

E. The same beneficial owner owning several daycare centers in different locations

A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.

An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).

The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.

Which investigative actions should the investigator take concerning the 100.000 USD wire transfer? (Select Three.)

A. Review the wire transfer protocols for this customer.

B. Gather all account activity for Fl clients that purchased packages from the airline.

C. Review a sampling of wire transfers initiated by travel companies with Cuba travel packages.

D. Recommend a plan for the Fl's management to restrict the account relationship.

E. Review regulations applicable to foreign currency trading transactions.

F. Locate and review licenses, registrations, and account operating agreements associated with the MTB account.

An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

1.

YC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.

2.

X is the UBO. and owns 97% shares of this entity customer;

3.

Y is is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.

KYC PROFILE

Customer Name: AAA International Company. Ltd

Customer ID: 123456 Account Opened: June 2017

Last KYC review date: 15 Nov 2020

Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern: TRANSACTION JOURNAL Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency: Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency: Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties. RFI Information and Supporting documents: According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below: 1) All incoming funds received in HKD and USD currencies were monies lent from non- customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all

the lenders are engaged in trading business.

2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay

the loan

After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed. Which additional information should the investigator request?

A. Previously filed SARVSTR unrelated to the customer, but similar in content

B. Formation document/description of the group-related companies

C. Source of the incoming funds to the group-related companies

D. Adverse news screening on all names listed in the formation documents

SAR/STR NARRATIVE

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

Client Information:

Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that

span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

Beneficiary Information:

As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior

management as part of a bonus scheme. The purpose behind this payment was for purchase of property in another country.

Payment Reference:

ABCXXXXX31PZFG2H

ABCXXXXXX51PQGEH

ABCXXXXXX214QWVG

ABCXXXXXX41PSXA2

ABCXXXXXX815QWS3

Concerns:

1.

We are unsure about the country of incorporation of the beneficiaries.

2.

We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

3.

There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

4.

Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

5.

The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in a real estate business which again poses a higher risk.

The monitoring system of the correspondent institution flags the transaction as suspicious activity. The correspondent bank needs to send a request for information to the respondent bank. Which elements should be included in the request? (Select Three.)

A. Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s)

B. Full transaction history of the correspondent bank's customer

C. The account profile of the customer and their KYC data

D. The respondent bank's customer's senior management bonus plan

E. The contract pertaining to the purchase of property in another country

F. The last 6 months of transactional history

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.

An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

The analyst determines that site visits should be conducted for the three daycare businesses. Which observations at the on-site visits would justify writing a SAR/STR? (Select Three.)

A. Signs of severe wear and poor maintenance at the site

B. A site located in a commercial building

C. Lights turned off at the site during operational hours

D. Visible attendance with children being dropped off by parents

E. Visible signage indicating the purpose of the building

F. A full parking lot of cars with no staff at the site

A financial institution (Fl) has considered the available relevant factors in a transaction and has determined it will file a SAR^STR. Which is needed to support the contents of the report to the financial intelligence unit?

A. Definitive proof that suspicious activity occurred

B. Enough circumstantial evidence about the suspicious activity for a criminal proceeding

C. No factual description of the suspicious activity

D. Low evidentiary threshold about the suspicious activity