CAMS-FCI Online Practice Questions and Answers

Correct Answer: BD

Some of the negative impacts of illegal wildlife trade and environmental crimes are loss of potential tax proceeds and threats to biodiversity. Loss of potential tax proceeds occurs when illegal wildlife trade and environmental crimes evade taxation and customs duties, depriving governments of revenues that could be used for public services and development. Threats to biodiversity occur when illegal wildlife trade and environmental crimes endanger species, habitats, and ecosystems, reducing their resilience and ability to provide essential services for human well-being. Public health consequences and threats to a country's political stability are not directly related to illegal wildlife trade and environmental crimes, but rather to other types of financial crimes such as money laundering, terrorism financing, or corruption. References: [Advanced CAMS-FCI Study Guide], page 68-69; [FATF Report on Money Laundering from Environmental Crime], page 9-10.

Correct Answer: C

The bank is out of compliance with CIP regulations because it did not obtain the minimum identifying information from the customer prior to opening the account, as required by 31 CFR ?1020.220(a)(2)(i)(A). The bank should have obtained the name, date of birth, address, and identification number of the customer, as well as verified the identity of the customer to the extent reasonable and practicable. The lack of ownership data may also indicate a violation of beneficial ownership regulations, but that is not the primary issue in this case.

Correct Answer: A

The best reason for an investigator to continue an investigation is that the end-user is a military force. This is because supplying aviation parts to a military force may involve sanctions risk, export control risk, or human rights risk, depending on the nature and destination of the military force. The investigator should conduct further due diligence to determine if the customer is complying with the relevant laws and regulations, and if the bank is exposed to any reputational or legal risk by providing services to the customer.

References:

Former Airline Employee and Aircraft Part Sellers Charged in Kickback ... Former Airline Employee and Aircraft Part Sellers Charged in Kickback ... Former airline employee and aircraft part sellers charged in kickback ...

Correct Answer: B

According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1]. Reference: [1] Financial Action Task Force. (2013). Money Laundering and Terrorist Financing Through the Real Estate Sector. https://www.fatf- gafi.org/media/fatf/documents/reports/ML-TF-through-real-estate.pdf

Correct Answer: B

An investigator should avoid escalating a suspicious event to the chief compliance officer if there is a potential conflict of interest, such as when a close family member of the officer is involved in the transaction. In such a case, the investigator should pursue other channels, such as reporting to a higher authority or an independent committee. The other options do not present a conflict of interest and should be escalated to the chief compliance officer as part of the normal procedure. References: Advanced CAMS-FCI Certification Handbook, page 18.

Correct Answer: D

A more robust supervisory approach is needed by regulators when overseeing small- and medium-sized MSBs compared to larger MSBs for combatting TF because small- and medium-sized MSBs are more at risk of allowing transactions

linked to TF due to the lack of skilled compliance resources. Small- and medium-sized MSBs may face challenges in implementing effective AML/CFT controls, such as conducting risk assessments, applying customer due diligence

measures, monitoring transactions, detecting suspicious activities, and reporting to the authorities. They may also have limited access to training, guidance, and tools to enhance their compliance capabilities. Therefore, regulators need to

provide more supervision and support to small- and medium-sized MSBs to ensure that they comply with the AML/CFT requirements and mitigate the TF risks.

References:

Sustainable Growth for Small and Medium-Sized Enterprises ... - MDPI Lessons on Resilience for Small and Midsize Businesses - HBR

Correct Answer: C

The investigator should document the investigation process and retain all relevant documents in the case management system. This is because documenting the investigation process is a good practice to ensure the quality and consistency of the investigation, as well as to facilitate the review and audit of the investigation. Retaining all relevant documents is also important to support the evidence and findings of the investigation, as well as to comply with the record-keeping requirements of the relevant authorities. The other options are incorrect because:

A. Excluding any open-source information from record-keeping is not advisable, as open-source information can provide valuable insights and context for the investigation, and may not be easily retrievable in the future. B. Adding all of the information the FI has about the subject, their account(s) activity, research results, KYC information, etc. to the SAR/STR is not necessary, as the SAR/STR should only contain the essential information that is relevant and material to the suspicious activity. Adding too much information may obscure the main points and make the SAR/STR less effective.

D. Not documenting the investigation process if a SAR/STR is not filed is not acceptable, as the investigation process should be documented regardless of the outcome. Documenting the investigation process can help justify why a SAR/STR was not filed, and also provide a reference for future investigations involving the same subject or activity. References: Advanced CAMS-FCI Certification | ACAMS, Section 3: Reporting Suspicious Activity, page 14 Leading Complex Investigations Certificate | ACAMS, Module 4: Documenting Your Investigation, page 4

Correct Answer: BCE

According to the Certified Anti-Money Laundering Specialist (CAMS) Manual , 6th edition, if a bank's transaction surveillance system triggers an alert for a deposit of 250.000 USD into a client's account, the bank should take the following

actions:

Request information and documentation from the client on the background of the transaction (CAMS Manual, 6th edition, page 46).

Contact the client advisor to learn if he has any insight on the transaction background (CAMS Manual, 6th edition, page 47).

Review the transaction background in the bank's transaction platform (CAMS Manual, 6th edition, page 47).

Discarding the alert as a false positive hit and reviewing the alert if the deposit is made in cash should not be done.

The bank should request additional information and documentation from the client to better understand the nature of the transaction. Additionally, the bank should reach out to the client advisor to learn if they have any insight on the

transaction background. Finally, the bank should review the transaction background in the bank's transaction platform to determine if any additional alerts or anomalies are present. (CAMS Manual, 6th Edition, Pages 117-118)

Correct Answer: D

According to the Certified Anti-Money Laundering Specialist (CAMS) Manual [1], 6th edition, financial entities that violate Anti-Money Laundering (AML) laws can face several reputational risks such as loss of high-profile customers, seizure of assets, increased audit costs to monitor behavior, and monetary penalties. For example, the US Treasury's Financial Crimes Enforcement Network (FinCEN) imposes civil money penalties on "persons who willfully violate, attempt to violate, conspire to violate, or cause any violation of any provision of the Bank Secrecy Act or its implementing regulations." (CAMS Manual, 6th edition, page 26).

Correct Answer: AD

According to the Certified Anti-Money Laundering Specialist (the 6th edition), the financial institution (Fl) should take the following actions:

A. Review the client's activity, determine if suspicious activity exists, and report accordingly. The Fl should assess the risk of the situation and determine if there is any suspicious activity that needs to be reported to the appropriate authorities. This would involve conducting a review of the client's account activity and transactions to determine if there are any indicators of money laundering or terrorist financing. D. Inform local LEA and regulator of the request for awareness. The Fl should inform the local law enforcement agency and regulator of the request from the foreign jurisdiction to raise awareness of the situation and determine if any further actions need to be taken.