CAMS Online Practice Questions and Answers

Which AML standards have force of law?

A. Standards as defined in the Third European Union Money Laundering Directive (2005/60/EC)

B. Standards as defined by the United Nations (UN)

C. Standards as defined by World Bank / International Monetary Fund (IMF)

D. 40 Recommendations

What is a major money laundering risk associated with a number of prepaid cards as opposed to credit or debit cards?

A. The risk of losing the prepaid cards

B. The inability to load the card with cash

C. The global access to cash through ATMs

D. The anonymous access to funds

An anti-money laundering officer for a financial institution has been conducting a monthly self- assessment.

The officer reviews the accounts increase in 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.

What is the nest course of action for the anti- money laundering officer to take?

A. Inform the Board of Directors promptly of the Know Your Customer policy trend over the last six 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

A bank receives an anonymous tip from an employee about another employee through its confidential hotline.

Which activity warrants further review?

A. A mortgage officer works with home loan applicants to resolve adverse credit issues

B. An employee in bookkeeping accepts funds transfer requests from customers via telephone

C. An employee in accounting works with customers to help understand how to reduce service charges

D. A teller distributes bank brochures to customers who regularly conduct cash transactions below reporting limits

What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?

A. 3,000 Euros

B. 5,000 Euros

C. 10,000 Euros

D. 15,000 Euros

Bank A is a non-United States (U.S.) bank that has $5 million in a correspondent account at a bank in New York City. The Worldwide Terrorist Syndicate (WTS) has $1 million in its account at a non-US branch of Bank A. The U.S. government has initiated forfeiture action against the WTS.

Which potential action can the U.S. take under the USA PATRIOT ACT pursuant to the issuance seizure warrant?

A. Seize Bank A's $5 million correspondent account in the U.S.

B. Seize WTS' $1 million account at the non-U.S. branch of Bank A.

C. Seize $1 million from Bank A's correspondent account in the U.S.

D. Seize $5 million from the non-U.S. branch of Bank A where the WTS' account is located.

OFAC-issued regulations apply to which entities? (Choose two.)

A. Intermediaries transacting with US banks

B. Foreign banks with US customers

C. Foreign subsidiaries of US banks

D. US branches of a foreign bank

E. Foreign import-export companies

When a financial institution (FI) is requested to provide data and information to a law enforcement agency for matters related to financing of terrorism, assistance:

A. can be refused on the ground of bank secrecy.

B. cannot be refused on the ground of bank secrecy.

C. can be refused on the ground of tipping-off.

D. cannot be refused on the ground of tipping-off.

A compliance analyst is reviewing recent activity between a publicly traded company and a company in a high risk jurisdiction. Which detail suggests that escalation is warranted?

A. The activity is a reputational risk to the financial institution.

B. It is the first time the originator wires the beneficiary.

C. Beneficiary is active in a related industry.

D. Payments to the beneficiary are for large dollar amounts.

A non-US bank is implementing a sanctions compliance program. Which extraterritorial reach of Office of Foreign Assets Control (OFAC) regulations would matter the most to the foreign bank?

A. OFAC administers sanctions based on criminal investigations against targeted foreign individuals.

B. OFAC sanctions programs prohibit transactions and require the blocking of assets of foreign individuals that appear in negative media sources.

C. OFAC acts only under presidential wartime emergency powers, against countries and foreign individuals considered enemies of the US.

D. OFAC has the power to impose significant penalties on foreign individuals who are found to be in violation of the blocking orders.