CAMS Online Practice Questions and Answers

What is a major economic consequence of money laundering through the use of front companies?

A. Placing more emphasis on manufacturing

B. Weakening of the legitimate private sector

C. Creating a more competitive pricing environment

D. Aligning management principles between criminal enterprises and legitimate businesses

A corporate services provider in a European Union (EU) country has a prospect from an African country who deals in oil and gas. The prospect intends to develop an oil terminal in his home country with a $75 million dollar loan secured by a third party, which is a trust formed in a Caribbean island with a holding company based in a European secrecy haven. A young lady is presented as an ultimate beneficial owner who has gained her wealth through a fitness studio in her home country.

What are two red flags that could indicate money laundering or financing terrorism? (Choose two.)

A. A loan worth $75 million with a third-party guarantor

B. The guarantor company's ownership structure is overly complex

C. The prospect wishes to have a corporate structure with a holding company in EU country

D. The ultimate beneficial owner is young lady who has gained her wealth through a small business

Which Trust parties should be identified to determine the true nature of the Trust relationship according to Basel guidelines? (Choose three.)

A. Respondents

B. Payees

C. Trust Administrators

D. Trustees

E. Beneficiaries

F. Settlors/grantors

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.

Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

A. Issue country-specific Mutual Evaluation reports

B. Address AML/CFT technical assistance of individual members

C. Identify jurisdictions with weak AML/CFT regimes

D. Establish AML/CFT standards and typologies

E. Protect the reputation and standing of FATF

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'!'

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 or freeze assets related to money laundering

C. A large number of predicate crimes for money laundering

D. Absence of an effective FIU

What are the rules imposed by Office of Foreign Assets Control (OFAC) for legal entities and persons related to the U.S.? (Choose two.)

A. Any foreign corporation is also penalized if it conducts transactions with sanctioned countries under OFAC rules.

B. A subsidiary of a legal entity of the U.S., which is formally registered in a foreign country, is exempt from OFAC rules.

C. A foreign individual visiting the U.S. for a short vacation is obligated to follow OFAC rules.

D. The head office of a foreign legal entity which has a branch in the U.S. does not need to comply with OFAC rules.

E. Nationals of the U.S. must comply with OFAC rules, regardless of where they are located in the world.

While conducting a review of a medium-risk customer, an analyst noted that a newly added authorized signatory is a foreign politically exposed person (PEP). Which is the appropriate next step for the analyst to take?

A. Review beneficial ownership to finalize the risk category of the customer.

B. Remove the PEP as the authorized signatory.

C. Re-categorize the customer as high-risk.

D. Categorize the authorized PEP signatory as high-risk.

Money laundering red flags associated with money service businesses include: (Choose two.)

A. an employee lives a lavish lifestyle supported by his or her salary.

B. the same customer conducts transactions in multiple locations in a short time period.

C. repeated receipt of funds transfers from virtual currency exchanges.

D. cash payments on insurance policies by a third party.

E. two or more customers use the same identification for separate and unrelated transactions.